I was watching a local cable news channel where the reporter was questioning a lady about the problems she was facing due to the recent onion price rise. She started with problems of the monthly family budget and all. I suddenly became agile as the reporter was doing that vox pop in front of the biggest jewellery shop in Nashik and the lady in question had just come out of the plush showroom with shopping bags in hand. That really shook me from inside. The lady had probably spent a few tens of thousands rupees on buying some new jewellery at nearly Rs 9900/10gms of gold and was literally blood red while talking about the Rs 22 per kg of onions.
As a reporter, I was very closely watching the misery of the onion farmers for the past four years in Nashik district. When I had gone to cover the first onion farmers' suicide in rural Nashik, I was very directly questioned by a village boy, " you do go to the urban housewives to see their problems when onion prices go high then why don't you come to us when it falls to Rs1 per kg?" And I had no answer. The metropolitan viewership, TRP, passive urban attitude towards rural India all these answers would have been insensitive for his logical question.
I was speechless.
Then I had begun to study this problem more seriously and in more empathetical manner. We have been witnessing an era of market liberalisation for almost 16 years now and we also proudly say that still almost 64 per cent of India's population lives in rural India...striving rather surviving on agriculture...and very sadly but factually...this 64 per cent population til in their fields with their heart & soul put together but the produce of the 64 per cent population does not get the opportunity of a liberal market. As per the law, they have to bring the produce...at their cost...to the APMC's pay for weighing, grading, loading/unloading...and sell at the pre-managed auctions in the APMC's. The traders form a ring among themselves and decide that none of them is going to bid for more than a certain price...the farmers face an auction with a pre-determined bid price...thus the prices are made to fall. If you remember...for the past 3 seasons, the prices in the APMC's were kept as low as Rs 1.50 per kg but the retail prices were never below Rs 9 per kg. The costs of seed, water, electricity, fertilizer, pesticides, labor, transportation, weighing, loading/unloading are borne by the farmers and when he just couldn't cope up with the pressures of managing within Rs 1.50...he started committing suicides...last year witnessed 59 suicides in Nashik district alone.
This time, if the wholesale prices are at Rs 19 per Kg....then how come the retail price is only at Rs 20? Don't wonder...the onion in the retail market is of the summer season...purchased then at Rs 6-7 per Kg...stored and now brought to the market at a very high margin...The traders are far more aware of the national trends than the poor illiterate farmer...the low rain areas in Karnataka bring onions to the national market with the fall of the monsoon but this year. They have had unusually high rains and hence the crops have got delayed or spoiled. So nationally, the demand for onions has increased as compared to the supply and so the stored onions have arrived at higher prices.
Also, the government gives subsidies to those farmers who build a facility to store onions...this costs nearly Rs2 lacs and hence only the rich afford to build this. More than 60 per cent of the onion farmers are small land owners and they simply can't afford. So even this time, the rich farmers who could store the summer crop are minting money today but still the 60 per cent of the farmers have not benefitted.
Now if the auctions in the APMC's are managed as they were...the farmers will get agitated as the retail prices would be almost 20 times what they would get...as it is the onion season in the Nashik market is finishing and within a weeks time there won't be an onion in the APMC's...the last purchase has been of only 6000 quintals at a rate of Rs 19 per kg. During the peak of the season...it is to the tune of 50-60,000 quintals per day.
So the traders feel no harm in buying small quantity of onion at higher price. In addition to this, the politicians controlling the board of the APMC's will also be little assured & feel safer as the mid-term elections are on the thresholds and 60 per cent of the total farmers are onion producers
If the agriculture produce get a liberal market...the farmers will sell their produce at a price that covers their costs, interests and a reasonable profit. Today, the costs & interests component amounts to Rs 4.50 per Kg for Onions. So the farmers will be happy to sell it for say Rs7 per Kg and the consumers will get it at retail at Say Rs 9 per kg. But this will be a constant rate throughout the year. Also look at this fact...the farmers have to buy electricity, seeds, fertilizers, pesticides, transport at the prices decided by the respective manufacturers but the farmers can not determine the price of their produce. And we call this a liberalized economy where 64 crore producers can't decide the prices of their production.
We as consumers anyway pay Rs 9 per Kg even when the wholesale prices are at Rs1.5 per Kg & farmers committing suicides. But then, the huge trading community which has tremendous money power will get threatened, the donations to the political parties will decline and people minting money out of adversities will be at loss.
In schools, we have learnt that our country lives in rural India but thanks to the present day politicians & traders, our country is dieing in rural India.
(Niranjan Takle will be the Bureau Head (Nasik) for IBN-Lokmat, Network 18's Marathi channel in the pipeline)