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  • homeeconomy NewsOnion, potato prices nosedive to Rs 2 per kg — what is the issue and what is India doing to help farmers

    Onion, potato prices nosedive to Rs 2 per kg — what is the issue and what is India doing to help farmers

    CNBC TV18
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    By Aseem Chauhan   | Santia Gora   | Akriti Anand  Mar 3, 2023 11:29:04 PM IST (Updated)

    Due to the high yield this year, the prices of onions and potatoes have dropped significantly, making it difficult for farmers to gain profit margins. But why is there a high yield and why are prices falling? Read here:

    Onion and potato prices in parts of Maharashtra have nosedived to Rs two per kg, adding to the woes of farmers across the country. Farmers are getting an average price of Rs 400 to Rs 500 per quintal of onions. Similar is the situation for potato growers. Potatoes are now being sold at Rs 2 to 2.5 per kg, upsetting farmers in Haryana, Uttar Pradesh and Gujarat.

    But why are onion and potato prices falling?
    This is because of the unusual rise in temperatures across North-West India in February. An alarm among farmers sounded when the India Meteorological Department (IMD) issued the season's first heatwave alert in Konkan and Kutch region, and also in parts of Maharashtra. Farmers have since been worried as unprecedented high temperatures can affect crop production and quality.
    Kharif and early Kharif onion contain high moisture and an increase in temperature affects the quality of the produce. It eventually leads to the rotting or drying up of bulbs, resulting in shrivelled bulbs.
    By this time of the year, only Kharif crops hit the market. But this time, farmers are worried about the heat wave. That's why they are selling late Kharif crops along with the Kharif crops.
    This has led to a massive price crash. Till the first week of February, farmers were getting Rs 10-11 for a kg of onions. But now, as both Kharif and late Kharif crops have hit the market, prices have crashed to Rs 2-4 per kg.
    Therefore, due to the high yield this year, the prices of both onions and potatoes have dropped significantly, making it difficult for farmers to gain profit margins on the commodities.
    Earlier a Skymet Weather official also warned that the early "soaring temperature above the normal" in North India will lead to some "anxious moments for the farming community of the country".
    "High temperature during flowering and maturing period lead to loss of yield," Skmet Weather Services president GP Sharma told CNBTV18.com. Sharma also added that the "excess temperature for February, which will extend to March, will damage the grain filling...this will, in turn, affect the Rabi crops in general and wheat in particular.
    Onions and potatoes are mainly Rabi crops. However, there are three sowing seasons for the onion crop in India – Kharif (planted between July-August and harvested in October-December); late Kharif (planted between October-November and harvested in January-March); and Rabi (planted between December-January and harvested in March-May), the Print reported.
    Kharif onion is mainly grown in Maharashtra, Karnataka, and Gujarat with new emerging areas in parts of Madhya Pradesh, Rajasthan and Uttar Pradesh, the Indian Council of Agricultural Research said in a report.
    The major onion-producing states are Maharashtra, Madhya Pradesh, Karnataka, Gujarat, Bihar, Rajasthan, Andhra Pradesh, Haryana, West Bengal, and Uttar Pradesh in the country. These states account for almost 90 percent of the total onion production of the country.
    What is India doing to help farmers?
    The Indian government is working on a roadmap to ensure better crop prices for farmers and affordable food for consumers. It is expected to make advance plans to procure food stocks ahead of the harvest season.
    The Departments of Consumer Affairs and Food and Public Distribution and the Agriculture Ministry are part of an inter-ministerial consultation to decide contours of the food procurement roadmap based on real-time data from food mandis.
    Recently, the National Agricultural Cooperative Marketing Federation of India (NAFED) purchased 200 MT of onions from Nashik and sent the stock to Delhi after as onion farmers  claimed that they were getting woefully low prices for their crops. To ensure uniformity in prices, the government will procure and sell onions across India.
    NAFED's progressive procurement of onions in the past three days is 637.83 MT, with 424.31 MT of red onions procured from eight centers in the Nashik belt of Maharashtra on February 27. NAFED aims to open more such centers to accelerate onion procurement.
    Earlier, the government said it has set up a committee to monitor the impact of rise in temperature on the wheat crop in April. The committee will issue advisories to farmers on adopting micro irrigation, Agriculture Secretary Manoj Ahuja was quoted by PTI as saying.
    Meanwhile, Siraj Hussain, Senior Visiting Fellow, ICRIER and Former Agricultural Secretary, called for some mechanism for preventing the kind of fluctuation seen in onion prices. "The main demands of farmers agitation were fixation of a minimum price below which trading cannot take place. But there are difficulties in that," he said.
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