Monopoly of wholesale trade causing onion price hike: Agri Min

The price spike in onions upto Rs 90 a kg in the national capital is due to "monopoly" of wholesale traders in the absence of amendment to the APMC Act, a senior Agriculture Ministry official said today.

Supplies in northern region have been hit as unseasonal rains in producing belts have delayed harvesting of kharif crop, but the overall output is estimated to be higher, he said, adding that there could be a "glut' situation" in the coming days and prices may fall sharply.

Onion crisis has continued for the last three months with retail prices having shot up again to Rs 80-90 per kg in Delhi and other major cities due to supply crunch.

"Onion crisis would not have blown out of proportion had Delhi and some other states amended the Agriculture Produce Marketing Committee (APMC) Act by now," said Sanjeev Chopra, Joint Secretary in the Agriculture Ministry.

The Delhi government has not amended the APMC Act and as a result there is a "monopoly of wholesale traders", he noted.

Chopra said that there are about 1,500 wholesale traders in the national capital dealing in various agri-commodities.

"We have fixed number of wholesale traders against an infinite number of suppliers and consumers. The amendment to the APMC Act could have encouraged more players and competition," he told PTI.

He further said that when prices are set at an higher level in the wholesale mandis, retailers further sell at a much higher rate. "However in the recent period, retailers too are keeping a huge margin and this is hurting consumers."

For instance, wholesale price of onions in Delhi are ruling in the range of Rs 48-51 per kg in last two days, while retail prices have gone upto Rs 90/kg, he said and emphasised the need to amend the APMC Act to address this price difference between wholesale and retail price.

Agriculture marketing is a state subject. The Centre had finalised a model APMC bill and circulated to various States and UTs in 2003 for implementation to reform agri-marketing system. So far, 16 states have amended their Acts based on the model provided by the Centre.

The model Bill includes provisions for direct marketing and purchase of agriculture produce from farmers, contract farming and setting up of markets in private and cooperative sectors, among other things.