What onion shortage?

STATE UPDATE/MAHARASHTRA

Dilip Maule grows onions at Pimpalgaon village in Niphad taluka, located 30 kilometres from Nashik city.

"I grow a host of crops, including onions. We have onion seasons overlapping. This fiscal year, there was widespread drought. But the onion cultivation belt of Nashik, Nagar and Pune did not face much water scarcity," he says.

There was a water shortage in the Sangli and Kolhapur regions but onion crops were largely unaffected.

The alarm bells may be clanging in the national capital about a shortage of onions in the north and south of India, but that's not the case in Maharashtra.

Says Maharashtra's minister for marketing and the employment guarantee scheme Harshvardhan Patil: "We have no crisis here. At best, owing to the water scarcity in parts of the state, onion production may drop marginally by 10 to 15 per cent this fiscal year compared with last year. Last year we had a total onion production of 15 lakh tonne while this year 11 lakh tonne has already been produced "" and one more onion cultivation season remains."

That's good news for the rest of India. Maharashtra accounts for more than 27 per cent of the national onion production.

Confirms Satish Bhonde, joint director of the National Horiticultural Research and Development Foundation (NHRDF), the central government agency that has an office in Nashik: "In 2001-2002, while 56 lakh tonne of onion was produced in India, Maharashtra produced 15 lakh tonne."

In 1998-1999, an onion shortage nearly brought down the government at the Centre. This was largely caused by a drought in Maharashtra in 1997-98.

The drought affected the rabi onion crop. The following year, erratic rains and a lack of onion storage facilities resulted in a more acute supply problem.

Fearing an onion shortage and a rise in onion prices as it goes to the hustings, the ruling coalition at the Centre wants to ban the export of onions. But Maharashtra is opposed to this.

Says Patil: "The adjoining nations, China, Pakistan and Bangladesh, have had a bumper season this year. I have written to the Union government on Tuesday against imposing a ban on exporting onions as this would wreak havoc on the onion economy in Maharashtra. We are also seeking a rise in the 50 per cent import duty on onions to 100 per cent so that the prices of the commodity in India remain stable."

Indeed, data provided by the Maharashtra state agricultural marketing board show that onion arrivals in the Mumbai, Pune, Lasalgaon, Malegaon, Manmad and Pimpalgaon markets between December 15 and January 11, 2004 have fallen only by a negligible amount, compared with arrivals during the same period in 2002-2003.

On January 9, 2004, for instance, 8,850 quintals of onions arrived in the Mumbai market, down marginally from the 8, 900 quintals it received on January 9, 2003. The story is repeated for the entire period between December 20, 2002 and January 11 2003.

Bhonde says that the area under onion cultivation in Maharashtra is actually expanding.

"Nine of the 13 talukas in Nashik region now boast of onion cultivators. There is a lot of potential for onion cultivation in the state that can still be tapped. Already an increasing amount of agricultural land is covered by onions in Nandurbar, Aurangabad, Nanded and Parbhani."

The Centre would do well to look closer at establishing storage facilities for onions, instead of focusing on banning their export. Some 55 lakh tonne of onions is required in India, but only around 16.5 lakh tonne of onions can be stored in the country, a miniscule portion of which exists in Maharashtra.

The state's onion cultivators, for example, are dependent on temporary storage facilties adjacent to their fields or on traders and commission agents as the commodity is perishable.

"More than 50 per cent of the crop is lost of inadequate storage facilities in the state. In these temporary storage facilities, around three per cent of the onions are lost in the first month, and five to seven per cent in the next month. After three months the loss rises to 10 per cent, after which sudden and drastic losses are reported. The inadequacy of storage facilities is a major cause of the onion problems in the state," Bhonde says. But Patil says that the state government has attempted to tackle the problem.

"We have created one lakh metric tonne storage capacity."

Maharashtra, however, is hot on onion exports. It will set up onion export zones in six districts of Maharashtra (in Ahmednagar, Nasik, Pune, Solapur, Satara and Jalgaon), involving an investment of Rs 32.40 crore, over the next five years.

The so-called export zones are intended to help create additional storage capacity in the state, apart from stabilising prices.

The Centre has already cleared the project. The state government is in the process of roping in private companies for this. Says Patil: "Of the total project cost of Rs 33 crore, the state government will contribute Rs 12 crore and the Union government Rs 50 lakh. The Agricurltural Products Export Development Authority (APEDA) will pitch in with Rs 3 crore to Rs 4 crore while the National Horticulture Board will provide another Rs 2 crore. It is for the remaining Rs 8 crore that the state government is on the look out for private partners."

The state's agriculture marketing federation will be the nodal agency for the project. But for these projects to get off the ground, onion exports have to continue.

Patil says that Maharashtra intends to export in excess of one lakh tonne of onions and that the state government has made repeated requests to the Centre asking it to increase the quantum of onion exports. The Centre has so far declined to clear this.

Maharashtra is ruled by a Congress-National Congress Party coalition and with onions scarce in in north and south India, the export curbs are unlikely to be lifted.