Retail prices of onions rose more than 200 per cent in September 2019 in most cities across the country. Prices climbed to as high as Rs. 80 rupees per kg in most urban centres in September, compared with Rs. 20 - Rs. 25 per kg in July through August. In response to the rising prices, the government banned exports of all varieties of onion, imposed stock limits on onion traders and released stocks from the central buffer stocks in a few places.
The onion farmers are angry with this short-sighted reaction of the government to rising onion prices. Auctions at the country's largest wholesale onion market at Lasalgaon in Nashik district was halted after protests by farmers. They staged demonstrations at the APMC, bringing onion auction to a halt and also staged a rasta roko on the Mumbai-Agra highway at Umrane and at Vincur on the Nashik-Aurangabad road.
The onion producing farmers are angry because this has adversely affected the off take of onions from the farmers. The onion growers are already faced with reduced production as only 20%-30% of the crop has survived the heavy rains. Following the heavy losses suffered by them due to a collapse in onion prices in November-December 2018, many farmers had cut down their acreage under onions in the ensuing Rabi season. Even this reduced harvest fetched low prices all the way from March to July. They were further hit by rising costs of inputs – seeds, fertilisers and transport, and the floods and untimely rains. The state government failed to pay them any compensation for the crop losses from water scarcity in summer and floods in the monsoon. The fact is that successive governments have turned a deaf year to the long standing demand of onion farmers for a minimum support price for their produce and insurance for crop losses. While the ban on exports of onions and imposition of stock limits looks like a quick-fix solution, it has not addressed the root cause of the fluctuation in prices.
A farmer from Bhimsukh village in Neemuch district of Madhya Pradesh took his produce of 20 quintal of onions to the market on 2nd December 2018. He was faced with the price of Rs.0.50- 0.80 per kilo; which meant Rs 1,000 for his entire produce. He had spent Rs.600 to transport onions to the market. There was no facility to store so many onions; very angry with the price, he fed the onions to animals. After this, he stopped producing onions. Nine months later, he has no onions to sell when the prices have risen!
Farmers are always at the mercy of the market and vulnerable to prices being manipulated by the traders. They do not benefit when prices of onions rise and face a heavy loss when prices fall. They get severely hurt when restrictions are placed on exports of onions. It is a well-documented fact that for the most part, the remuneration that farmers receive for their produce does not even cover their cost of production. They are often forced to sell their produce to wholesalers at throw away prices. Too many time in the recent past, they have been forced to dump a part of their production on the road as prices fall to a level that the cost of transporting the produce is more than price offered in the mandis. This happened at the beginning of this year when farmers were forced to sell their produce at a loss of Rs.2-3 per kg.
This situation once again raises the issue of the State failing in its duty to protect the interests of the agricultural producers as well as the working population in the cities. The steps the state is taking in the name of controlling onion prices, in order to save itself from the wrath of the working people of the cities over the increased onion prices, are being paid for dearly by the onion producers.
The interest of farmers must be taken care of by the state guaranteeing procurement of all onion produced at the time of harvest at remunerative prices and creating infrastructure for effective storage near all the major production centres and points of consumption. This will eliminate the stranglehold of traders and big retail chains and manipulation of both procurement and sale price. There must be public procurement at guaranteed prices for all agricultural produce to secure the livelihood of farmers.
Correspondingly a universal public distribution system must be created which will supply all the necessities, including onion, in good quality at affordable prices to the working population. The state is, on the contrary, taking steps to systematically dismantle whatever public distribution system exists today. This leaves the working population at the mercy of hoarders when there is a shortage while the absence of guaranteed procurement hits the producer when there is a surplus production.
The crisis of livelihood being faced by the peasantry will not end unless there is a reorientation of the economy with the aim of securing the livelihood of those who toil. This is the only way the agricultural producers will be guaranteed a human existence while the working population will be guaranteed essential items in good quality and at affordable prices. It is towards this common end that workers and peasants must build their unity and organize to fight for building a new system which will harmonise the interests of all the working people of town and countryside and provide for the well being of all the toiling people.