The onion crisis in Maharashtra has become a significant issue, especially for the farmers who are bearing the brunt of misguided inflation control policies. The Central Government’s decision to lift the ban on onion exports but impose steep export duties has backfired, making Indian onions too expensive for the global market. This has not only hurt the farmers but also impacted the local economy that thrives on onion cultivation.
Ajit Pawar’s Apology: Hollow Words?
Maharashtra’s second Deputy Chief Minister, Ajit Pawar, recently embarked on a statewide tour ahead of the upcoming Assembly elections. His tour began with an apology to onion farmers in North Maharashtra, a region central to the country’s onion production. Pawar admitted that the export ban was a mistake and assured the farmers that such a ban would not be imposed again. He stated, “I admit that the onion export ban was a mistake and apologize for that. There will be no onion export ban again. I have told the Central government, and we in the State government have agreed that there will be no onion export ban.”
However, these assurances seem to be nothing more than hollow words. Despite promises from Union ministers, the Chief Minister of Maharashtra, and other BJP leaders, the ground reality remains unchanged. Farmers continue to struggle with low prices and high production costs, with no tangible relief in sight.
The Reality for Onion Farmers
Farmers like Rajaram Jamdade from Chombhut village in Ahmednagar are still grappling with the consequences of the export ban. Jamdade has reduced his cultivation area due to plummeting prices and is left with onions that cost more to produce than they are worth on the market. “I still have eight quintals of onions in my yard. The rate is around Rs.2,600 per quintal. My cultivation and transport cost together is Rs.3,500 per quintal. So, what is the purpose of selling?” he says.
Summary of Price Changes (August 3 – August 10, 2024)
| Commodity | Location | Aug 3 Price | Aug 10 Price | Price Change | Daily Arrival (Aug 10) |
|---|---|---|---|---|---|
| Onions (per quintal) | Lasalgaon APMC | Rs 2,725 | Rs 3,300 | +21% | 6,000 quintals |
| Tomatoes (per crate) | Pimpalgaon APMC | Rs 461 | Rs 350 | -30% | 24,000 crates |
Current Price Range:
- Minimum Wholesale Price: Rs 1,951 per quintal
- Maximum Wholesale Price: Rs 3,368 per quintal
- Total Quantity Auctioned on August 10: 6,000 quintals
Factors Behind the Price Hike
- Reduced Supply: The ongoing monsoon season has led to a decline in the arrival of onions at Lasalgaon APMC. The quantity of onions arriving at the market has dropped to 9,000 quintals per day from the usual 15,000 quintals.
- Increased Demand: Despite the reduced supply, demand for onions has surged both in domestic and export markets. Export demand, particularly from Sri Lanka, has risen significantly, contributing to the price hike.
Onion trader Manoj Jain commented on the situation, stating, “The combination of reduced supply due to rains and increased demand, especially from export markets, has driven up prices.”
The Ban’s Impact
On December 7, 2023, the Central government imposed an export ban on onions to combat inflation, a move criticized by experts. Yogesh Bidwai, author of a Marathi book on the onion business, explained, “To keep inflation under control, the government banned onion exports. As a result, the prices fell, and farmers suffered.”
Post-Ban Policies and Their Fallout
Recognizing the political backlash as Lok Sabha elections approached, the BJP-led government lifted the ban on May 4, 2024. However, the new policy imposed a minimum export price of $550 per tonne and a 40% export duty. This translated to Indian onions selling for up to Rs.70,000 per tonne in international markets, compared to $500 per tonne for onions from other countries. Consequently, Indian onions struggled to compete internationally.
Limited Relief Measures to decrease the impact of Onion Crisis
To mitigate the crisis, the Maharashtra government announced the procurement of onions by NAFED in February 2024. Yet, with only two lakh tonnes procured against an estimated 50 lakh tonnes in farmers’ yards, the relief was minimal. The procurement price of Rs.2,410 per tonne was substantially lower than the market rate of Rs.3,500. Additionally, a Rs.300 per quintal subsidy was introduced but later limited to 200 quintals per farmer, offering little solace.
Conclusion
Maharashtra’s onion farmers continue to face a challenging environment despite political assurances and policy changes. With elections on the horizon, the effectiveness of these measures and the government’s ability to address the real issues affecting farmers will be tested. The persistent disconnection between policy decisions and the on-ground realities of farmers underscores the need for more substantial and effective interventions.
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