Onions not ‘essential’, but does it matter?

Onions may be off the Essential Commodities Act, but it is not going to impact their marketing—at least in Maharashtra.Blame it on the ...

Onions may be off the Essential Commodities Act, but it is not going to impact their marketing—at least in Maharashtra.

Blame it on the timing of the announcement. At the moment, stocks of onions harvested in the rabi (summer) season are nearing the end of their six-month shelf life, while the kharif (monsoon) crop is on the verge of being harvested. So the produce available in the markets are either rabi onions on their last legs or kharif onions harvested too soon by quality-unconscious farmers.

Either way, farmers aren’t complaining: Rainfall has been good this year, and the current wholesale price is around Rs 6/kg. Farmers peg the cost of a kg at Rs 4.

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It may be recalled that the BJP-led NDA government had banned onion exports and brought the commodity under the Essential Commodities Act in 1998, when wholesale prices touched Rs 40/kg and metro retail markets sold the humble veggie for Rs 50/kg.

The subsequent electoral rout of the BJP in four states was attributed to the rising onion prices, and there were demands from farmers and traders to lift the restrictions. Since then, the government eased restrictions to allow a fixed quota of exports, but onions continued to remain in the list of essentials.

Maharashtra is the largest producer of onions in the country, accounting for around 15 lakh tonnes per annum in the country’s yield of about 54 lakh tonnes. Alongwith Gujarat and Orissa, Maharashtra also ensures the round-the-year availability of onions in the country. While other states grow onions in kharif and rabi seasons, Maharashtra, Gujarat and Orissa grow them thrice: kharif, late kharif and rabi.

Onions grown in summer can be stored for six months, upto October-November. Kharif onions, with a shelf life of only six weeks, are harvested in November while late kharif onions (with a shelf life of six weeks) follow in January.

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The crucial period, then, is between November and April, when rabi stocks are exhausted and kharif onions are to take over. The problem starts when the kharif crop fails, either due to insufficient rainfall or inclement weather, and creates a scarcity, pushing up prices. The late kharif crop harvested in Maharashtra, Gujarat and Orissa fills up the gap till the summer onions are harvested in April.

Till 1997 the annual onion production in the country was around 42 lakh tonnes (with Maharashtra being the largest producer, with 13 lakh tonnes). In 1998, the onion production in the country dropped to around 36 lakh tonnes because of inadequate rainfall, causing scarcity and hiking prices.

From the next year, the area under onions increased and the production in the country went up to around 50 lakh tonnes. As a result, in 2000 there was a glut and wholesale prices dropped to Rs 2/kg prompting farmers to agitate. The Congress-led government in Maharashtra, then, had then procured onions at higher than the prevailing market prices for Rs 3 and Rs 3.50 /kg, but found no takers.