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Politics of onion pricing
Sikander Kushwaha | 11 Mar 2010

With the hope of better price farmer those who had in loss due to crop failure last year, sown onion in their field and did huge investment on loan from formal as well as non formal source of borrowing.

On Friday March 03, 2010 central government slashed the minimum export price (MEP) of onion to $225 per tone for all destinations. From March 1, the MEP will be $225 effective.

With the declaration of MEP slash the wholesale prices at Nashik, the hub of onion production, dipping from Rs 1,500 - Rs 1,600 per quintal prevailing a month back to Rs 500 - 550 per quintal.

According to a Financial Express analysis, retail prices of onion in Delhi have declined to Rs 20 per kg on Tuesday from Rs 24 per kg prevailed two months back. The decreases in prices have been significant in Chennai and Hyderabad where retail prices have gone down to Rs 14 per kg and Rs 13 per kg respectively on Tuesday from Rs 26 and Rs 21 reported in early January 2010.

In November 2009 suddenly prices of onion reached to his highest price Rs 32 per kg from Rs 15 in retail market of Pune and in wholesale market it is between Rs 1500 to Rs 1600 due to heavy rain product was destroyed.

To check the price of onion government has increased the MEP from around $200 in April 2009 to around $550 in February 2010 instead of export ban. In this background farmers thought export price will not slashed hence many farmers grown onion in their field.

With the hope of better price farmer those who had in loss due to crop failure last year, sown onion in their field and did huge investment on loan from formal as well as non formal source of borrowing.

Ganesh Thorat resident of sirur village near to Pune, first time entered into the cultivation occupation, had taken loan of Rs 40,000 from money lender in the hope of good price of product. He was hopping that his product will sell at least RS 1200 per quintal and earns profit but now he is compel to sell his product at Rs 500-Rs 700 per quintals in Pune mandi with loss. Now he is not able to understand what to do. Whether repay the loan or feed his and dependent stomach. He has limited option of fresh loan to survive. More or less, same story with all the farmers of onion in this region.

Government had slashed the MEP on the pressure of exporter for their profit not to check the inflation. In last year when prices of onion started to increase, till that time business houses were purchased onion from market at low cost and in the name of crop failure they booked profit by selling at higher price up to Rs 32. Now once again onion started to arrive in the market, in the name of demand and supply law as well as inflation exporter and business house made pressure on government to slash the price of onion MEP, so that they can book their profit by purchase at low rate ad sell at higher rate.

According to me government is not interested to protect the common man interest. When prices of onion started rising in November why not stop the export instead of increasing MEP. According to NAFED Onion were exported amounted Rs.504.20 crores in last year and inflation of food item reached to highest 17.95 highest in 20 year.

When that time government does not ban the export of onion then why this time reduced the price of MEP? I feel government is in favor broker and allowing them to book their profit at the cost of farmer suicide. With the passage of time illusion of common men will be clear, decreased price of onion in domestic market once again sold at higher price. In this pricing game Again many broker or business house will earned profit and many farmer may lose their life. In this context I must say “suicide committed by farmer is not suicide; this is like a state sponsored farmers killing”.