Divergence of Prices and Horizontal and Vertical Integration of Supply Chain for Onion in Maharashtra: A Variety-wise Analysis

There are generally wide fluctuations in the monthly prices of onion, which lead to seasonality and which cause a perpetual concern to producers. Added to this, fluctuations in annual prices, which are generally cyclical in nature, also affect the export performance. These facts make it necessary to understand the nature of these fluctuations and the present study is an attempt in this direction. It examines the divergence among farm harvest prices, wholesale prices, retail prices and export prices and horizontal and vertical integration of supply chain for various varieties of onion crop in the state of Maharashtra of India. The study showed highly profitable nature of onion crop cultivation since cultivation of onion generated 76.67 per cent per quintal net returns over per quintal variable cost during kharif season and 64.48 per cent per quintal net returns over per quintal variable cost during rabi season. The study also showed that the producer’s share in consumer’s rupee for onion varied from 49 per cent to 52 per cent in domestic market for various varieties, and this share in export channel varied from 30 per cent to 35 per cent. 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 of onion was the higher cumulative marketing margins cornered by various market functionaries within the channel. 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. The study emphasised upon the need to develop adequate post-harvest infrastructure facilities for high value crops in order to protect farmers from undue low prices for their produce. Public and private sector investment initiatives towards creation of adequate post-harvest infrastructure facilities will certainly boost horticulture crop production and marketing, both in domestic and export markets. One of the major recommendations of this study is in favour of the announcement of MSP for rabi onion, which has longer shelf life. The government support for rabi onion will not only protect the farmers but also the consumers.