Economics of Onion (Allium cepa L.) production and marketing in Ballia district of Eastern Uttar Pradesh, India

Introduction

The framework of the Indian economy primarily relies on the agricultural sector. Among all vegetable crops, onions constitute one of the most significant varieties. They are utilized in every household for dietary purposes. India consumes approximately 1.3 million tonnes of onions monthly, establishing it as a vital vegetable crop for domestic consumption. The nation ranks first in terms of cultivated area, encompassing 194 thousand hectares, and holds the second position in production, amounting to 31,703 thousand metric tons in the fiscal year 2021-22. During the agricultural years 2021-22, the country harvested 26.64 million tons of onions. The principal onion-producing states in India, such as Maharashtra, Madhya Pradesh, Karnataka, Rajasthan, Bihar, Andhra Pradesh, Haryana, Telangana, and Gujarat, collectively contribute over 60 percent of the total onion output. Notably, Maharashtra leads in production, followed by Madhya Pradesh, with respective shares of 42.53 percent and 15.16 percent in the year 2021-22. The Ministry of Commerce & Industry has articulated that regarding the onion export policy, "The extant export policy is free and only the export of onion seed is 'restricted' and that too is permitted under authorization from DGFT" (Directorate General of Foreign Trade). The precise origins of onion as a wild plant remain uncertain. It is hypothesized to have originated in a region encompassing Iran, West Pakistan, and the northern mountainous countries. In India, onions serve as an essential spice and commercial crop that can enhance the livelihoods of impoverished farmers. Furthermore, they play a pivotal role in ensuring food and nutritional security for individuals. www.extensionjournal.com Onions are consumed nearly every day in households, often served as a salad and prepared in various culinary methods, including curries, frying, boiling, baking, as well as in soups and pickles. The daily requirement of onions in kitchens highlights the necessity for a consistent supply in the market at equitable prices for both producers and consumers. In addition to fresh consumption, onions provide excellent raw material for the processing industry, as they can be transformed into dehydrated powder, rings, and shreds. Historically, onions have been recognized as a medicinal herb in ancient times, as documented in medicinal treatises such as the "Charak Samhita" from the third or fourth century. The Sanskrit term for onions, "Palandu," signifies their usage during the Vedic period and within Aryan culture. Moreover, onions are an abundant source of phosphates, calcium, carbohydrates, proteins, and vitamins B and C. They are also utilized in the production of oil and pectin. The comprehensive expenditure associated with the cultivation process amounts to Rs. 24,400 per hectare, with variable costs representing over 90 percent of this total. Within the spectrum of variable costs, the expenditure attributed to human labor (37.91 percent) emerged as the predominant component of the overall cultivation cost, succeeded by expenditures on fertilizers (12.89 percent), farm-yard manure (10.64 percent), irrigation (9.82 percent), seeds (8.14 percent), and bullock labor (6.82 percent). (Balappa and Hugar 2003) [2]. The average cost of cultivation per hectare for onion, assessed across cost categories A1, B2, B2, C1, C2, and C3, was determined to be Rs. 16,616, Rs. 17,011, Rs. 19,161, Rs. 19,461, Rs. 21,611, and Rs. 23,772, respectively. The cost of cultivating onion per hectare demonstrated an upward trajectory correlating with the increase in the size of the holding. (Rajput et al. 2008) [5]. The total estimated cost of cultivation was calculated at Rs. 49,563 per hectare for onion and Rs. 34,840 per hectare for cauliflower. The net returns for onion were observed to be superior (Rs. 74,597 per hectare) when juxtaposed with those for cauliflower (Rs. 38,072 per hectare) (Sidhu et al. 2010) [7]. The expenditure associated with onion cultivation in the large farm category was the highest, recorded at Rs. 91,595, followed by medium farms at Rs. 83,689 and small farms at Rs. 72,258. Among the various elements comprising the cost of cultivation, human labor constituted the largest share (28.45 percent), followed by seeds (17.43 percent). Additional significant components included the rental value of land (12.85 percent), irrigation charges (11.92 percent), farmyard manure (9.52 percent), plant protection chemicals (5.87 percent), fertilizers (5.20 percent), and machinery (3.22 percent) (Meena et al. 2016) [4]. The highest proportion of production (57.89 percent) was transacted through commission agents, succeeded by primary wholesalers. The onion cultivators incurred the highest average total marketing cost of Rs. 57.27 per quintal for onions sold via commission agents, followed by secondary wholesalers. The producers received the most favorable net price per quintal in Channel-IV. The marketing cost per quintal was the highest within Channel-II (Rs. 319.00), while the marketing margin reached its peak in Channel-I (Rs. 136.31), followed closely by Channel-V. The producer's share in the consumer's expenditure per quintal was greatest in Channel-I, whereas marketing efficiency was also highest in Channel-I (Kantariya et al. 2018) [3].

Materials and Methods

Selection of Study Area

Uttar Pradesh is broadly divided into nine agro-climatic regions, namely: Tarai and Bhabar Region, Western Plain Zone, Mid-Western Plain Zone, South-Western Semi-Arid Zone, Upper Gangetic Plain Zone, Central Plain Zone, Bundelkhand Zone, Eastern Plain Zone (also known as the North-Eastern Plain Zone or Poorvi Maidan Kshetra), and Vindhyan Zone.

Selection of District

The Eastern Plain Zone of Uttar Pradesh comprises nine districts, namely Azamgarh, Mau, Ballia, Ayodhya, Ghazipur, Jaunpur, Sant Ravidas Nagar, and Varanasi. From these districts, Ballia district was purposively selected due to the district's considerable area under onion cultivation.

Selection of blocks

A list of all 17 blocks were prepared on the basis of onion growing area. Two block namely Murlichhapra and Bairia block were purposively selected for the study.

Selection of Villages

A comprehensive list of villages under Murlichhapra and Bairia blocks was prepared in consultation with Block Development Officers and arranged based on the number of onion growers. From this list, eight villages were selected randomly for detailed investigation. These villages were Sonbarsa, Bhojpur, Lakshimipur, Dalan Chhapara, Upadhyapur, Chakiya Jamalpur, Madhubani, and Karmanpur.

Selection of Sample Size and Farmers

A complete list of Onion growing farmers was prepared for each selected village. Farmers were classified into four categories based on landholding size: marginal farmers (below 1.0 ha), small farmers (1.01-2.0 ha), medium farmers (2.01-4.0 ha), and large farmers (above 4.0 ha). From each category, five farmers were selected randomly from each village, resulting in a total sample size of 160 farmers. Primary data were collected directly from the selected farmers through personal interviews using a pre-structured and pre-tested schedule. The study was conducted in year 2024-25.

Analytical tools The cost and returns of Potato crops

For calculating the cost and returns, tabular analysis, averages, and percentages were used. The standard Cost Concepts Method recommended by the Commission for Agricultural Costs and Prices (CACP) was adopted.

CACP Cost Concepts

The following cost components were calculated: Cost A1: Includes all actual cash and kind expenses, such as:

Existing Marketing Channels for vegetables in the Study Area

The commonly observed marketing channels in the study area were as follows:

Channel I Producer → Consumer

This channel was mainly adopted by marginal and small farmers who sold their produce directly in local markets, village haats, or roadside markets. Although this channel involved minimal marketing costs and no intermediary margins, it required farmers to spend more time and effort on marketing activities.

Channel II Producer → Retailer → Consumer

This was one of the most widely used channels in the study area. Farmers sold their vegetables directly to retailers in nearby markets. This channel reduced marketing costs compared to longer channels, but farmers still received a lower price than the consumer price due to retailer margins.

Channel III Producer → Wholesaler → Retailer → Consumer

This channel was predominantly used by medium and large farmers who marketed larger quantities of vegetables. While it ensured quick disposal of produce and access to larger markets, the presence of multiple intermediaries increased marketing costs and reduced the producer's share in the consumer's rupee.

Price Spread of Onion under Different Marketing Channels

The table 3. presents the price spread of onion under different marketing channels in the study area. It is evident that the price received by producers decreased with an increase in the length of the marketing channel. Under Channel I (Producer → Consumer), farmers received the highest price of ₹1220 per quintal, as no intermediaries were involved. The marketing cost incurred by the producer in this channel was Rs. 60 per quintal, and the consumer paid Rs.1280 per quintal.

In Channel II (Producer → Retailer → Consumer) the price received by the producer declined to Rs. 1010 per quintal due to the involvement of the retailer. The retailer incurred a marketing cost of Rs.120 per quintal and earned a margin of Rs. 100 per quintal, resulting in a consumer price of Rs. 1325 per quintal. Consequently, the producer's share in the consumer's rupee declined to 76.22 per cent.

Channel III (Producer → Wholesaler → Retailer → Consumer) involved both wholesalers and retailers, leading to higher marketing costs and margins. The producer received the lowest price of Rs. 972 per quintal. The wholesaler incurred a marketing cost of Rs. 60 per quintal with a margin of Rs. 100 per quintal, while the retailer incurred a marketing cost of Rs. 90 per quintal and earned a margin of Rs. 100 per quintal. As a result, the consumer paid the highest price of Rs. 1367 per quintal, and the producer's share further declined to 71.10 per cent. www.extensionjournal.com

Marketing channels, price spread, marketing cost and efficiency marginal, small, medium, and large farms respectively. Channel I recorded the highest marketing efficiency of 10.66, attributed to the lowest combined marketing cost and margin of ₹120 per quintal. The lack of intermediaries facilitated minimal price spread and maximized producer benefits. In Channel II, marketing efficiency significantly decreased to 6.02 due to a higher total marketing cost and margin of ₹220 per quintal. The retailer's involvement escalated marketing expenses, thereby diminishing channel efficiency. Channel III exhibited the lowest marketing efficiency of 5.69, resulting from the highest total marketing cost and margin of ₹240 per quintal. The presence of multiple intermediaries contributed to increased marketing costs, a wider price spread, and reduced efficiency.

References

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3. Kantariya GK, Ardeshna NJ, Vasavada KM, Thumar VM. Price spread in different marketing channels of onion in Bhavnagar district of Gujarat, India. International Journal of Current Microbiology and Applied Sciences. 2018;7(10):307-317.
4. Meena S, Singh IP, Meena RL. Cost of cultivation and returns on different cost concepts basis of onion in Rajasthan. Economic Affairs. 2016;61(1):11-16.
5. Rajput AM, Dwivedi ML, Karde S. Economic analysis of production of onion in Indore district of Madhya Pradesh. Indian Journal of Agricultural Economics. 2008;63(3):394-395.