AMARAVATI: A steep fall in prices of onion in the wholesale market is pushing farmers towards a debt trap. Matters worsened after traders disappeared from the purchase scene at Kurnool agriculture market yard, the nodal centre for sales in the region.
The traders, who initially refused to pick up the stocks citing inferior quality, subsequently boycotted purchases, refusing to take part in the online purchase mode. After the intervention of local public representatives and senior officials, traders finally agreed to resume transactions on Thursday. However, the situation has not improved at the field level as many wholesale traders are yet to return.
In fact, traders have been offering a very low price for the Kurnool stock for the past several weeks, resulting in a crisis in the market. “They are offering Rs 250 to Rs 300 per quintal, which means that one kilo of stock costs just Rs 3. We can’t even get picking cost from this amount,” said K Ramireddy of Meenaiahgari Palle village in Kurnool.
According to farmers, the investment cost per quintal would be anywhere around Rs 600 to Rs 800. Farmers purchased onion seed at Rs 1,100 to Rs 1,500 per kilo. They would require at least 20 kg of seed for cultivating one acre of land. The initial investment per acre would come to Rs 30,000 while the total investment including fertilizer, labour and lease amount would touch Rs 1 lakh to Rs 1.4 lakh per acre.
Farmers have been cultivating around 100 quintals from an acre. With each quintal fetching just between Rs 300 to Rs 400, total returns are less than Rs 40,000 per acre, which is nearly 60-70% less than the investment cost. A farmer, who takes his stock all the way to Hyderabad due to the closure of the Kurnool market, ends up borrowing to pay for his return journey and food as he could only fetch enough to cover for transport after selling 500 quintals.
In spite of the low wholesale price of Rs 3 to Rs 4 per kg, the price by the time it reaches the retail market is Rs 30 per kg.
