Onion supply Chain in India-Key issues and way forward

Onion is one of the closely monitored agricultural commodities produced in India. The prices of onion has direct bearing on the wholesale price index, so also on inflation. Therefore, this commodity is always in focus of the Government. Though there is always a surplus production, fluctuating domestic and export demand create demand supply mismatch leading to spiral effect on the prices of onion. There has been sharp increase in area and production of onion after 2000 and the total turnover from onion is to the tune of Rs.27200 crore. There is wide gap in productivity of onion as compared to world average and leading producers. Similarly a wide yield gap is observed within different states in India. A very high fluctuation in prices of onion was observed. The prices sometimes fall below cost of production making it uneconomical for the farmers. Govt of India uses Minimum Export Price (MEP) as a tool to ensure regulated exports so that there is adequate supply of onion in domestic market. Effective crop planning and creation of post-harvest management infrastructure for onion will go a long way to solve the issues related with onion supply chain.