Murikata onion price plunge leaves Rajshahi farmers in the red

Highlights:

• Production cost of Murikata onions is Tk50-60 per kg, market price is Tk40-50
• Farmers cite onion imports during peak season as a key factor worsening the crisis
• Country faces a shortage of onions each year, requiring imports
• It creates opportunities for market syndicates to exploit the situation

Murikata onions have begun making their way to the markets, but growers in the Rajshahi division are facing significant losses due to low prices and high production costs. 

Farmers say they are not receiving fair compensation for their crops, particularly due to onion imports during the peak season, which has worsened the crisis.

Discussions with farmers, traders and agricultural officials from six districts in Rajshahi show that this year, the production cost of Murikata onions per bigha ranged from Tk1.1-1.35 lakh. 

Each bigha yields 45-60 maunds (approximately 1700-2300kg) of onions, bringing the production cost per kg to Tk50-60. However, the current market prices are far below these costs, leaving farmers in a state of distress.

In the wholesale market of Shibganj, Chapainawabganj, Murikata onions are selling for Tk40 per kg. In Taherpur Hat, Rajshahi, the price is Tk43.75 per kg, while in Sujanagar and Pabna, onions are being sold for Tk42 per kg. In retail markets, the price is slightly higher at Tk50 per kg, but still insufficient to cover the costs.

Struggles and losses

Rana Ahmed, a farmer and trader from the Halti Beel area in the Naldanga upazila of Natore, said that he spent nearly Tk1.2 lakh to cultivate onions on one bigha of land. However, with onions selling at Tk40-45 per kg and a yield of 50 maunds, his total revenue would only amount to Tk90,000, resulting in a significant loss.

Mojibur Rahman, a farmer from Nazirganj union in Sujanagar upazila of Pabna, also reported a loss of Tk20,000-30,000 per bigha due to low yields caused by adverse weather conditions at the start of the season. He planted onions on 2.5 bighas of land, with an average harvest of 45 maunds per bigha.

Sujanagar upazila Agriculture Officer Md Rafiul Islam said that farmers planted more onions this year, hoping for better prices. However, the slight increase in production costs led some farmers to experience losses.

The situation is especially dire for Rabbi Hossain, a farmer from Bahirchar village in Chartarapur union of Pabna Sadar upazila, who has cultivated onions on seven bighas of land. After the first batch was destroyed by excessive rainfall, he had to take out a loan of Tk5 lakh to finance the second round of planting and maintenance. 

With onion prices at rock bottom, Rabbi fears he will not be able to repay the loan, as his expected earnings fall far short of his production costs.

Walid Hasan, a farmer from Sadar upazila in Chapainawabganj, said that the high cost of Murikata onion seeds—Tk8,000-10,000 per maund—along with other expenses like fertilisers, pesticides, and labour, has made this year's cultivation financially unviable. Farmers who have leased land are facing even steeper losses.

Shafiqul Islam Sona, a farmer from Pakuria union in Bagha upazila of Rajshahi, who cultivated onions on 20 bighas of land, expressed his concern over the low prices, saying, "The production cost of Murikata onions per kg is Tk50-60, but they are being sold for Tk30-35 in wholesale markets. This results in a loss of Tk40,000-50,000 per bigha."

Shafiqul Islam also voiced frustration over the continued importation of onions from India, which he believes is contributing to the crisis. "If LC imports continue, farmers will be completely ruined," he warned. 

He added that India uses a strategy of increasing exports when there is a surplus in Bangladesh, which further discourages local onion cultivation.

Shafiullah Sultan, agriculture officer of Bagha upazila, said, "The situation for Murikata onion farmers is very difficult. Due to low prices, they can't recover their production costs. This year, farmers had to buy higher-priced seeds, and many seedlings were destroyed by rain, raising costs. 

"Additionally, land lease costs have risen from Tk10,000-15,000 to Tk20,000-25,000, further increasing production costs. Production is also lower this year, with yields dropping from 80 to 50-60 maunds per bigha." 

He noted that many farmers, who previously made a profit, expanded their cultivation, but now face severe losses. "We need to save our farmers," he added, warning that if prices remain low, farmers will reduce cultivation next year, leading to higher prices.

Motahar Hossain, a trader at Sati Hat market in Manda upazila, Naogaon, said that buying and selling onions has become challenging due to the oversupply. Unsold onions often risk rotting, and raw onions lose weight, leading traders to earn minimal profits.

Md Ismail Hossain, acting additional director of the Department of Agricultural Extension (DAE) in Bogura, said that when supply increases, prices typically drop. In such cases, farmers can store their onions and sell them directly, avoiding middlemen to reduce losses.

Oversupply and market challenges

According to the regional office of DAE in Bogura, a total of 58,313 hectares in Bogura, Sirajganj, Pabna, and Joypurhat are being used for onion farming this year, with a target of 10,586 hectares for Murikata onions. 

Pabna is the leading district for onion production, where the target for Murikata onion farming was 8,580 hectares but has expanded to 8,961 hectares, with a production target of 130,000 tonnes. 

Md Jamal Uddin, deputy director of Pabna DAE, said, "The cost to produce one kg of onions is Tk42, but farmers are only earning Tk25-30 per kg. This is causing heavy losses. If farmers do not receive a fair price, they may stop cultivating onions next year. If onion imports are not stopped, it will be impossible to save the farmers." 

He added that they recommended halting onion imports until February, but no decision had been made yet.

The DAE reports that the target for onion cultivation in Rajshahi was 7,600 hectares, but Murikata onions have been grown on 11,225 hectares, with 755 hectares harvested so far, yielding 12,450 tonnes. 

Umme Salma, deputy director of the Rajshahi DAE, said, "The target for onion production in Rajshahi is 184,000 tonnes. However, only 755 hectares have been harvested so far. Although prices are slightly lower, we hope farmers will get a fair price. We have already informed higher authorities about the situation."

In Chapainawabganj, the target for Murikata onion farming was 3,800 hectares but has grown to 4,035 hectares. Farmers there are calling for an import halt from January to March.

Last season's high prices encouraged more onion cultivation in the Noldanga upazila of Natore, but many farmers now fear they will not even cover production costs. 

Local agricultural sources report that 2,093 hectares in Natore are dedicated to Murikata onions this year, including 1,270 hectares in Noldanga, up from 730 hectares last year.

Addressing the crisis

According to DAE, the country faces an annual onion shortage of several hundred thousand tonnes, leading to imports costing billions of Taka each year. These crises also provide opportunities for market syndicates to exploit the situation. Without expanding the cultivation of new onion varieties, fully meeting domestic demand will be impossible.

In the fiscal year 2022-23, the country's total onion demand was 40 lakh tonnes, but only 26 lakh tonnes were produced from 250,000 hectares, resulting in the need to import approximately 7 lakh tonnes.

Researchers at the Spice Research Center in Shibganj, Bogura, have been working for years to reduce dependency on imports.

Dr Nur Alam Chowdhury, a senior official at the centre, said the country needs 1,300 tonnes of onion seeds annually, with the Spice Research Center and Bangladesh Agricultural Development Corporation supplying 5% each, while the rest is covered by farmers and imports. 

Expanding seed production and distribution to farmers could boost domestic production and reduce imports, while stabilising the market would help prevent losses for farmers, he added.