Asia’s biggest onion market is falling apart

Farmers' grievances regarding increasing onion prices haven't been met in Lasalgaon

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Traders in Lasalgaon state that India’s daily onion requirement is 50,000 to 60,000 tonnes (Image: Lars H Knudsen Lars H Knudsen, Pexels)

Lasalgaon, Asia’s largest onion market for the past 75 years, has not made any efforts to reduce the farmers’ grievances regarding increasing onion prices. They have not ensured that the farmers get better prices for their produce to set the trend of better prices for goods across the states.

Due to the above reason, the onion growers state that farmers are slowly shifting away from the Lasalgaon Agriculture Produce Market Committee. This market, established on April 1, 1947, deals with nearly 15,000 to 30,000 tonnes of onion.

About Lasalgaon’s onion trade

Lasalgaon, Asia’s biggest onion market, has been controlling India’s onion trading for the last 75 years, but the farmers have hardly benefitted from the onion prices. They have complete control over the market with trading licenses, and no new licenses have been issued by the APMC without the traders’ and the farmers’ permission.

Lasalgaon farmers get lesser prices for their onion sales compared to other market committees for quite some years. Bharat Dighole, president of Maharashtra state onion growers’ association, stated that farmers from Nashik, Aurangabad, Dhule, Jalgaon, and Ahmednagar used to visit Lasalgaon in abundance; however, the last few years have seen a decline due to low prices.

Onion’s pricing due to the Lasalgaon market

Several factors like water scarcity, natural calamities, power shortage, and rise in prices of fertilizers and pesticides magnify the cost of production of onion. As per Dighole, the minimum rate to be given to the farmers for their onion should be Rs 30 per kg for them to recover their production cost.

Dighole, together with other farmers, held a meeting with traders and Market Committee officials at Lasalgaon and submitted a memorandum to the APMC chairperson. Onion farmers have appealed to the traders of the Lasalgaon Market Committee for the farmers to get a higher price for their produce so that the other markets will follow them.

The farmers want to get rid of the traders at Lasalgaon as they believe them to be behind the prices of onion going beyond Rs 100 per kg at retail outlets in 2019 and 2020.

New farm laws

Traders in Lasalgaon state that India’s daily onion requirement is 50,000 to 60,000 tonnes, and the price depends on its arrival time. However, farmers state that the traders control the market price by retaining or supplying stock of onion.

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Social media platforms started by onion farmers discussed how political leaders, APMC officials, and traders are together in a bid to either hike or lower onion prices. Any shortage or extra supply has a direct impact on retail and wholesale markets across states.

As onion prices are decided by everyone except the farmers and the consumers, Dighole stated that these farmers need to be united to enable a bargain. To speed up the process, farmers have their market and supply chain. The association is taking steps to help farmers by direct marketing without any intermediaries.

This statement was released when the center’s new farm laws passed by the Parliament last year were stuck in a legal and political mess.

A study by the Institute of Social and Economic Change, Agricultural Development and Rural Transformation Center, Bengaluru, disclosed that in December 2010, a few named traders with connections played a huge role in hoarding the onion resulting in higher prices. Prices had rocketed in 2011 and 2013 also.

Suvarna Jagtap, the APMC Chairperson, denied that few families are dominating the onion trading or that the licenses are issued only with the consent of the trader.

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