Why is Lasalgaon Angry?

At first sight it resembles a large bus terminus. Rows of tree-lined bays greet visitors to the Shri Chhatrapati Maharaj Onion Market in Lasalgaon, some 44 km from Nashik in north-west Maharashtra. It is in these bays that around 50,000 quintals of onions are sold on good days, which apparently makes the market Asia’s largest. The onions are sold in bulk by farmers who bring in their produce from in and around Nashik district, the country’s largest onion growing region. The uniqueness of this market (and a few others in Nashik district) is that, unlike in other parts of the country, onions here are not sorted, packed and then sold; they are sold in trailer loads. Locals call these “open sales”.

When the market closed for an extended weekend on December 17, none of the players in Lasalgaon’s onion eco-system, including thousands of farmers, scores of traders and the consumers, had an inkling of what was in store for them the following week and after. On December 20, all hell broke loose. Daily arrivals suddenly plunged to just 2,000 quintals and prices in the market spurted to incredible highs. From `1,700 a week before, the cost of a quintal of onions now stood at `6,229. As retail onion prices flared up to over `80 per kg, the government stepped in.

High prices should be music to the ears of farmers and traders, right? Not quite. Lasalgaon is angry. This writer and photographer Umesh Goswami got a taste of it when we visited Lasalgaon. Barely into the market, over 50 farmers surrounded us and began hurling abuse at the media for making their lives miserable.“You people are responsible for this situation. Where were you when onion prices were `500 per quintal? Nobody talked of prices when we were struggling to recover our costs,’ they shouted in a mix of Marathi and Hindi. “Every one is talking of high prices but no one wants to mention that we have lost over half the crop and even at these high prices we will not make money,’another farmer, who politely told us to leave, said. Others were not so nice. A few even threatened to beat us up. We made a hasty exit unscathed. We later learnt that a few other journalists were roughed up and their equipment broken.

Traders are angry, too. To protest against raids by government departments (income tax, civil supplies and others), they had shut down the Lasalgaon market on January 10, further complicating an already fragile demand-supply scenario. Along with the raids, which were an attempt to unearth instances of hoarding, what has also incensed traders is a directive by the Maharashtra government to sell the commodity at not more than `40 per kg. “Where is the question of hoarding? Onions that we get in winter have high moisture content and they sprout in a couple of days. Those who store up will only lose money,’ argues Purushotham Chothani, a local trader.

The common man in Lasalgaon, which has a population of 25,000, and elsewhere in Nashik district is helpless. When prices are unreasonable, the only option is to cut down consumption. “I usually buy two kg of onions every week but now my family manages with just a kilo,’says Nitin Gokhale, a schoolteacher. Ajit Dongre, who runs a small eatery near the town’s police station, has also cut down his onion usage and instead increased cabbage consumption. “The taste more or less remains the same,’ he says with a wink.

Unseasonal rain during November destroyed the kharif onion crop across the country and more particularly in Maharashtra. “My estimate is that about 40 per cent of the crop, which was ready for harvest, was de- stroyed,’ explains R.P. Gupta, Director, National Horticultural Research & Development Foundation, which has been engaged in onion research since 1977. This roughly works out to about 11 lakh tonnes across the country. All-India output of onion this year (June ’10-May ’11) is estimated at 130 lakh tonnes. “Of the three onion seasons (kharif, late kharif and rabi), the kharif crop is very crucial as it affects demand-supply significantly,’adds Gupta.

Gopinath Ramnath Lokhande, a farmer in Chitegaon Phata — a village along the Nashik-Aurangabad highway — lost over half of his onion crop. “I normally harvest 700 quintals from my two acres. This time all I could manage was 300 quintals. A few other farmers, too, put their loss at similar levels.”

The government’s responses to the crisis, such as raising the minimum export price, banning export of onions, importing the commodity and action against possible hoarding, have not had the desired effect. They have only led to price volatility, say onion stakeholders in Lasalgaon. “Both farmers and traders are losing money due to this volatility,’ says Nitin Jain, a trader. "Many think we are all making money. That is not the case,’he adds. He like most others in the town sees the problem as one of a demand-supply mismatch. There could be some stray cases of hoarding but prices will reduce only after fresh arrivals begin and volumes pick up, he adds. Gupta disagrees on the hoarding part. The fundamentals do not justify such a sharp hike, he says. Between late December and now the arrivals at Lasalgaon market have remained more or less the same but the price has dropped by at least`2,000 to `3,000 per quintal. This is clear evidence that all was not well in the market then, he points out.

When will the prices ease? Once the late kharif crop begins to hit the market some time by January end, says Balasheb Kshirsagar, Vice Chairman, Agricultural Produce Market Committee, or APMC, at Lasalgaon. “I am already seeing a trend of an increase in arrivals and by the end of this month (January) prices would stabilise at lower levels,’ he adds.

Others in the town see a simple and effective way to bring down prices. “If you media people forget about onion prices for 10 days, everything will become normal,” a few traders told us as we prepared to leave Lasalgaon.