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One tonne onions sold for one rupee: The truth

Few days ago almost all media houses carried a story with a bizarre and sensational headline that a farmer in Pune earned Re 1 after selling nearly a tonne of his Onion crop. These news items and a copy of the invoice showing payment of Re 1 due to the farmer Devidas Parbhane have been shared widely on social media with huge backlash against the “Policies” of the Government and the “Apathy” of the farmers in Maharashtra. So is there any truth to this story?

The “Invoice”

The invoice dated 10th May 2016 which is in Marathi is issued by “Pallavi Trading Co. Pune” to the farmer, showing supply of 18 bags of Onions weighing 952 kgs at a price of Re. 1.6 per Kg. This way the total consideration comes to Rs. 1523. As the supply was done to an agency in Pune Agriculture Produce Market they deducted Commission (Rs.91.35), labour (Rs. 59) loading (Rs. 18.55), weighing (INR 33.30) and transport cost of Rs. 1320. When these charges (Rs. 1522) are deducted from the sale price (Rs. 1523) the farmer was supposed to receive net Re 1. Does this mean he sold “One tonne onions for Re. 1”?

Prices of Onions in Pune APMC on 10th May 2016

The rates as mentioned on Pune APMC website which can be accessed here for 10th May 2016 show that Onions received a minimum of INR 400 per quintal to a maximum of 800 per quintal. A simple reading of rates on different dates should tell you that the variance in rate is based on the “quality” of the onions and arrival quantity. As on today the Maharashtra State Agriculture Marketing Board website also displays near about same price range for Onions as was received by Farmers in Pune APMC on 10th May 2016.

So if rates are between 400-800 as claimed on the Pune APMC website, how come the farmer Devidas Parbhane received only Rs. 160 per quintal?

Upon enquiring with the Chairman of the Pune APMC and according to their clarification, it was brought to the fore that the said farmer had supplied “Chingli” quality of Onions. Chingli or “shallot” Onions are of small size. These onions are best used within a span of few days from the date of harvesting as they cannot be stored for a long time unlike other quality of onions which can be stored for months together.

Pune APMC Chairman revealed that the Chingli Quality of Onions are generally used for feeding livestock or at best used as fertilizers and seldom it’s used for human consumption. In fact this report also claims that the trading company has advised farmers not to get such onions to the market. Instead they can feed it to the animals or compost it to make fertiliser.

Yes, Rates are bad, but not as bad as Rupee 1 per tonne

Nowhere an attempt is being made to justify receipt of Rs. 160 per quintal (or Rs. 1.6 per kg) to the said farmer. However it is pertinent to note that in the same sensational news item, it’s mentioned that exports have fallen and production of onions has increased by 15-20% as per Maharashtra State Agricultural Marketing Board thereby causing a steep fall in the onion prices across the state.

So depending on the “quality” of the onions supplied by the farmer and taking into account the increase in production and other market forces prevalent, the price arrived for this quality was Rs. 1.6 per kg. On the same day, good quality onions were procured at Rs. 4 to Rs. 8 per kg by Pune APMC.

Did he actually get Rs 601 for his onions?

This is the most important aspect that emerges from the clarification issued. The APMC claims that the transport cost from Wadgaon to Pune is Rs 40 per bag. For the 18 bags of the farmer, the cost should have been Rs 720.The note further says, in this case, the farmer had taken Rs 600 advance, in cash, from the transport company called “Puja Transport” to take away the onions and sell. Hence in the final dues settlement bill, this Rs 600 was added to transport cost and recovered from the dues to the farmer, thereby leaving him with Re 1 only. So did the farmer receive Rs 600 (in advance) + Re 1 total Rs 601 for the crop? If this claim of APMC is true then the whole “Re 1 for 1 tonne” argument collapses completely. The amount may not be much but the sensationalism is lost.

Sensationalism by Media

Another fallacious argument which is observed in the articles is that the media tries to link this isolated incident to farmer suicides and shows the “apathy” and “neglect” of the state towards the farmers interests. The particular farmer does not even belong to Marathwada region and is not drought affected but this case is used to sell the idea that state is doing nothing for the farmers who are “reeling under severe drought”. There is no doubt that the state is under severe drought but is that in any way connected to this one isolated case? Is it correct to make a sweeping argument and write off all efforts because of one such case?

As per news reports, Maharashtra Government has already passed resolution allowing farmers to sell their produce freely anywhere in the state and removed the “hold” of APMC markets over the farm produce. This in itself is a bold step. It is not “compulsory” for any farmer to sell produce only at APMC as media houses are trying to make you believe. If at all the farmer decides to sell it at any APMC, he has to pay the mandatory charges and such decision shall be solely his.

Further the Government of India has started the National Agriculture Market connecting all APMC’s for providing real time information services for commodity arrivals & their prices, buy & sell trade offers. This is to achieve transparency in pricing. Particularly the Pune APMC also provides information about prices, arrival quantities on a daily basis and disseminates this information widely in surrounding areas so that no farmer is paid less by any Trader. Much more can be done for our farmers and Maharashtra State Government and Central Government are taking efforts.

The media, if they desire, can identify many real issues troubling our farmers and awaken the government machinery to bring about change. However making such fallacious arguments only shows that the intention is not to help the farmers but to grab eyeballs and create controversies and sell lies.

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Ashutosh Muglikar
Articles on Corporate Laws, Policy, Economics and Politics. Maverick. Lover of Ideas. Slayer of Hoaxes.

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