The Lasalgaon Agricultural Produce Market in Maharashtra’s Nashik district is the largest onion market in India, but on Tuesday morning, it lacked its usual bustle.
On a normal business day, its vast compound is crowded with row upon row of onion-laden trucks, and farmers sell thousands of tonnes of produce to wholesale traders during auctions every morning and afternoon. On Tuesday, however, a much smaller crowd of farmers and traders showed up for the morning auction, all of them looking utterly dejected by the events of the past two weeks.
All through September, a shortage of onions in markets across India sent prices soaring in retail markets, hitting as much as Rs 60 per kg in Mumbai last week and Rs 80 per kg in Delhi. With consumers clamouring for government aftion, the Centre attempted to increase supply in the domestic market by imposing a minimum export price of $850 on all onion exports in mid-September and allowing onion imports from Afghanistan, Egypt, China and other countries.
When this did not tame retail prices, the Centre banned all onion exports on September 29, and imposed stock limits on traders: wholesalers can now only stock up to 500 quintals of onion and retailers can stock up to 100 quintals.
The sudden restrictions caused an uproar among farmers and traders across the country. Onions that fetched farmers Rs 40-Rs 45 per kg in Lasalgaon last week were now selling for Rs 30-Rs 34 per kg. On September 30, farmers in Lasalgaon and other onion markets in Nashik protested by halting auctions and refusing to trade.
As sales limped back to life on Tuesday, agitated farmers claimed they are familiar with this pattern of government responses and are fed up of it.
“Every time onion prices shoot up like this, the government restricts exports and forces stock limits on traders, just to make city people happy,” said Anil Hatte, a Lasalgaon onion farmer. “But the government never steps in to do anything when onion prices crash and we suffer losses. Why?”
This is a question farmers have been asking for years, and they want no more of it. With the Maharashtra Assembly election coming up on October 21, both farmers and traders in Nashik’s onion markets warned of political consequences for the ruling Bharatiya Janata Party. “The government has done a surgical strike on onions,” said Hatte. “We will definitely teach them a lesson this election.”
Why prices are high
Farmer anger over onions has its roots in the periods when prices fall drastically, which happens every two or three years.
In August 2016, a glut in onion production caused wholesale rates to drop to less than Rs 3 per kg. In November and December 2018, Lasalgaon’s farmers were forced to sell their onions for as little as Rs 2 per kg – and some farmers claim they got even less. Frustrated by the government inaction, two farmers from Nashik dumped 30 quintals of onion on the roads at the time.
After suffering large-scale losses, farmers claim they were afraid to grow onions in the rabi season of 2018-’19.
Jalinder Kanade, for instance, says he decided to skip onions for a season after last December’s experiences. “I normally grow at least two acres of onion crop, but now I am going to wait and see if the situation improves,” said Kanade, who is from Nashik’s Shirazgaon village.
Hatte, who grew five acres of onion last year, sowed only two acres in the rabi season. “I was able to harvest 250 quintals from those two acres in March, but prices rose so slowly that 100 of those quintals sold for just Rs 7 per kg a few months ago,” he said.
Onion markets are currently stocked with the remnants of the rabi harvest of March and April, and the kharif season harvest is expected in November and December. The smaller size of the rabi harvest is only a part of the reason behind the current shortfall in onion supply. The central government has attributed the current price hike to hoarding by onion traders – which has been observed in certain parts of the country. But farmers and traders in Nashik vehemently denounce this claim.
“Traders are not hoarding onions. The prices are high because our crop has been damaged by a bad monsoon,” said Gnyaneshwar Nikam, a farmer with 12 acres of land in Nashik’s Nandgaon village. In August, heavy rainfall and floods had wreaked havoc in the district, damaging tonnes of onions that farmers store in sheds in their fields.
“The price hike of September had not even begun to compensate for all the losses we have suffered since last year, and the government stepped in to reduce prices for the sake of urban consumers,” said Nikam.
Traders, on their part, have their own set of grievances about onion prices.
“With exports banned and such tight limitations on how much we can stock, it feels like we have been jailed,” said Dattatrey Khorde, one of more than 120 wholesale traders who purchase onions at the Lasalgaon market.
Khorde’s company typically exports more than 1,000 tonnes of onions to Sri Lanka every month, and he is now afraid of losing clients on whom he spent months building relationships. “The export ban is so strict that we have not even been allowed to complete pending deliveries that clients have already paid for,” he said. “Does the government want to kill businesses?”
Pravin Kadam, a wholesaler who supplies to Indian retail markets, is just as upset about the stock limits imposed on traders. “Normally each trader buys between 1,000 to 5,000 quintals every day, so how can we possibly do business if we can only buy 500 quintals at a time?” he asked.
According to Kadam, what the government describes as “hoarding” is often just a matter of logistics. “Sometimes we buy stocks of onions and then don’t get labourers to pack and load them for three or four days,” he said. “It’s not fair to call this hoarding.”
During daily auctions at onion markets, wholesale traders have complete control over the pricing of the produce, while farmers have no bargaining power at all. But many of the traders that Scroll.in met in Lasalgaon claimed that they keep just a 2% profit margin for themselves, and that onion prices get inflated at the level of retail sale.
“Retailers add the costs of transport, police haftas, damaged goods and other expenses to the final cost of onions, making them so expensive for consumers,” said Ramesh Khodke, another trader at Lasalgaon.
‘Treated like a share market’
Both traders and farmers in Nashik expressed some anger at urban onion consumers, blaming them for ignorance and indifference towards the plight of farmers.
“Why do the city consumers cry so much about onion price hikes that happen once in a while?” said Kadam. “Dry fruits are good for health and always expensive, but farmers never cry and demand that they should be made cheaper.”
Gnyaneshwar Nikam berated urban consumers for spending hundreds of rupees on “pizzas and movies” without questioning these decisions. “Only when it comes to groceries, they want everything cheap,” said Nikam. “When onion prices crash to less than Rs 2 per kg, how come no consumer offers to pay more? Don’t they know how expensive fertilisers and seeds are? Do they even care about us?”
However, the litany of complaints against the government is much longer.
In addition to inflation in the costs of seeds, fertilisers and transport, farmers claim the state’s Bharatiya Janata Party government has failed to pay crop loss compensation to all those affected by water scarcity in the summer and floods in the monsoon.
Farmers are also anguished at the indifference of the state and central governments to their long-held demand for a minimum support price for onions. Currently, the government offers minimum support prices for 22 crops, including wheat, rice, cotton, sugarcane and various dals, but not for onions.
“For so long we have been asking the government to fix a price,” said Hatte. “If current onion rates are too high, then fine, pay us Rs 20 per kg. But then, would anyone be willing to pay us Rs 20 per kg even when the prices crash to Rs 2 per kg?”
Far from introducing a minimum support price for onions, farmers claim the government has resorted to petty tricks to win their support. When Prime Minister Narendra Modi visited Nashik for a rally on September 19, for instance, farmers say that wholesale onion prices had been raised briefly in order to satisfy traders and farmers.
“When Modi came, the onion price actually rose to Rs 50 per kg in the morning auction, but then fell back to Rs 35 in the evening, after Modi left,” said Sunil Gaikwad, a farmer from Nashik’s Jaipur village who sells his produce at the large Pimpalgaon Agricultural Produce Market 30 km from Lasalgaon. “What is the government trying to do? Why are we being treated like a share market?”
Can onions really impact elections?
While talking about the upcoming Maharashtra state election, both traders and farmers made grand declarations about bringing down the “Modi sarkar”, which they see as synonymous with the state’s BJP government led by Chief Minister Devendra Fadnavis.
“Modi’s rule is not democracy, it is like the reign of Hitler,” said trader Pravin Kadam. “We were all Modi bhakts who voted for him with a lot of hope in 2014 and 2019, but he has destroyed our hopes.”
The BJP’s election rallies in Maharashtra have also focused on national rather than state issues. At a rally in Mumbai on September 22, union home minister Amit Shah made it clear that the scrapping of Article 370 in Jammu and Kashmir would be the BJP’s central issue while fighting the Maharashtra election.
In Nashik, several farmers and traders claimed that they would not let this strategy work. “Yes, we are happy about the removal of Article 370, but how does it affect our lives? It’s not like we are going to go live in Kashmir,” said Hrishikesh Sharma, a farmer from Lasalgaon. “In the Lok Sabha election the BJP got re-elected because of their strikes on Pakistan, but we will not let that happen this time with Kashmir.”
Other farmers, however, were more sceptical. Onion farmers, they pointed out, form just a small part of the total voting population of Maharashtra. “And most people tend to forget all their anger at the time of voting,” said Ashok More, a farmer from Pimpalgaon. “I know that the Kashmir issue does not affect us, but at the end of the day, it feels good to vote for patriotism and national security.”