An Empirical Assessment of Onion value Chain in India for Domestic and Export Market

There are generally wide fluctuations in monthly prices of onion, which lead to seasonality and which cause a perpetual concern to producers. Fluctuations in annual prices, which are generally cyclical in nature, also affect the export performance. These facts make it necessary to understand nature of these fluctuations and the present study is an attempt in this direction. The study assesses the relationship of prices of onion at the farm level as well as at wholesale, retail and export level with a view to understand price mechanism involved in the marketing of onion. It and also addresses problems faced by stakeholders in the marketing of their onion. The study showed highly profitable nature of onion crop cultivation since cultivation of kharif onion generated 68-91 percent per quintal net returns over per quintal variable cost. Rabi onion generated 60-81 percent per quintal net returns over per quintal variable cost. The study showed that the producer’s share in consumer’s rupee for onion varied from 49 percent to 52 percent in domestic market for various varieties, and this share in export channel varied from 30 percent to 35 percent. Further, the study revealed that onion prices remained at lower ebb during harvesting/peak period and high during lean period. One of the major factors responsible for lower share of producer in retail and export prices was the higher cumulative marketing margins cornered by various market functionaries. The situation is unlikely to be altered unless various regulative measures are brought in place to check practices of these functionaries involved in the marketing of high value crops. One of the major recommendations of this study is in favour of announcement of MSP for rabi onion, which has shelf life of 4-5 months. The government support for rabi onion will not only protect farmers but also consumers.