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dna exclusive: Traders, not farmers, making the most of soaring onion price

While the farm price is Rs30-50 per kg, traders add their costs to make a killing

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The hiking of onion prices by traders means that you, the consumer, end up paying exorbitant amounts for a kilo, but the onion farmers, from whose fields the produce comes, hardly make any profits.

Only 10 to 15 per cent of onion farmers at the country’s largest wholesale market at Lasalgaon Agriculture Produce Market Committee (APMC) sell their produce at Rs50-60 per kg. The  rest is sold at an average rate of Rs10-30 per kg.

However, it has been found that traders, while selling onions in cities like Mumbai, Pune or Delhi, apply the highest rate of Rs50-60 per kg as their base price. This means that traders add their costs like transport and labour to their profits and sell you a kilo for Rs80 to Rs110.

“This is nothing but the exploitation of consumers. As a result, neither the consumer nor the farmer gets any benefit. Only traders and retailers end up earning a huge chunk of profits. This is a well-established syndicate, and no one does anything about it,” said Nanasaheb Patil, chairman of Lasalgaon APMC and president of Shetkari Kruti Samiti.

Patil added that, in cities, the perception is that farmers earn huge profits, but this is not true. “The media is responsible for this. Whenever an auction takes place in the market, traders buy 10-20 quintal at the highest rate, out of 100-150 quintals. The rest is still purchased at the average price.

The media highlights only the highest rate. This is the rate traders and retailers show consumers,” Patil added.

Dinkar Jadhav, an onion seller from Navi Mumbai, justifies why the hike. “Onions are perishable, and after being stored for several days, some quantum gets spoiled. This creates a dent in our profit share. So, to make up for the losses caused by the rotten onions, we have to jack up prices.

It is level playing. By doing this, we do not earn much, but it bridges the gap between losses and purchase,” he said.

Another retailer said that if they start selling onions on the average price, they will run into losses.

“Also, while buying onions, consumers pick the best ones and leave out even the slightly damaged ones. Because of this, the number of damaged onions piles up. In the end, we have to throw them out. To recover the expenses, we hike prices,” he said.

How prices go up
Only 10 to 15 per cent of onion farmers at the country’s largest wholesale market at Lasalgaon APMC sell their produce at Rs50-60 per kg. The  rest is sold at an average rate of Rs10-30 per kg.

However, it has been found that traders apply the highest rate of Rs50-60 per kg as their base price. This means that traders add their costs like transport and labour to their profits and sell you a kilo for Rs80 to Rs110

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