Analysis of risks involved in onion crop (Allium cepa) production and marketing by crop insured and non-insured farmers

In a tropical country like India, agricultural production is an inherently risky business and farmers face a variety of production and market related risks. Onion crop in particular is highly sensitive to weather conditions, pest and diseases and specially has lot of price fluctuations. This study was under taken with the objective of identifying and analyzing the different risks involved in onion production and marketing. The study was undertaken using primary and secondary data. The primary data were collected from 120 onion growing farmers (60 insured and 60 non-insured) from six villages in Dharwad District (Karnataka). The secondary data on month-wise prices of onion over a period of 20 years (1983–84 to 2003–04) was collected from government departments and used for analysis. The relevant Tabular analysis, measure of central tendency and statistical techniques were used. The risk was analyzed in terms of yield risk, rainfall risk, price risk and other production and marketing risk of onion crop faced by insured and non-insured sample farmers. This study results revealed that the yield variation was maximum in last 3 years. The price variation was observed more in post harvest period as compared to pre-harvest period and increased over the years, hence proved to be one of the most important constraints. The drought and price variation were the major risks faced by the sample farmers in the study area. The composite scores both in case of insured and non-insured farmers observed drought as the major production risk. The study has ended up with useful recommendations and policy implications.