In India, Onion is one of the most important crops considering not only the domestic but also the foreign export market. India lags in productivity which is almost one-third that of USA. But despite this, India ranks 2nd in global production. The initial estimates show that 263.7 lakh metric tonnes of onion were produced in the year 2020 which is nearly 17 per cent more than the previous year.
Last year we saw the ban on onion export owing to the damages done by heavy rains in Maharashtra, Karnataka, and Madhya Pradesh which contributes to almost 60 per cent of total production due to which the price spiked beyond Rs 150/kg. After this easing, the export ban was removed in March 2020 seeing a steady market.
Again, this year due to the excessive rains that hit the southern states, the government banned the export of all varieties of onion except those which are cut, sliced, or in powder form in September. After this sudden prohibition, many exporters expressed their views that government should allow restricted export rather than a total ban because this can be problematic for Indian share in the International market as it has already come down from 80 per cent to 40 per cent.
Year after year there is such condition of the prices skyrocketing in August to October time frame. In India, around 70 per cent of onion which accounts for 22 million tonnes is rabi crop which comes in the market in April or May but runs out of stock by August or September. And the Kharif and late Kharif crops arrive in October and February, respectively. As the Kharif produce arrives in the market in October and December, it creates a vacuum of two months. Hence price rise is generally seen around August to September when the rabi crop stock is very low. The onion market generally depends on the stored rabi crop.
For addressing such a crisis FICCI quoted that the government should focus on a long-term sustainable solution by studying the International storage models of Israel and Brazil. Storage is of utmost importance as an onion is a delicate commodity and its storage is quite difficult because of its water content. Up to 40 per cent of the onion production might be damaged in the rainy season adding due to less availability of proper PHT.
Investment should be increased in the dehydrated onions as it has a larger shelf life and high export potential. Dehydrating and preparing onion chips and powder can save the losses of the farmers and will add to the exports. ICAR has various low-cost storage structures of 5 to 50 tonnes, which should be popularised and commercialized.
Coming to the recent farm bill, The Essential Commodities (Amendment Ordinance, 2020) was expected to provide consistency and predictability to India’s agricultural policy regime and would unshackle the farmers. So, let’s wait for a positive ray of hope for Indian farmers as well as for the Indian agricultural industry.
