• Dec 15, 2019
• News

                                                                                   

The Curious Case of Onion

Abdul Awal Mintoo

M.Sc in Agricultural Economics

Former President, FBCCI

 

 

There comes a time when people experience ghostly things that glow with mystery and disbelief. That is what we are experiencing right now in Bangladesh -- the ghost story of onion. In Bangladesh’s kitchen markets, this cooking staple is selling at prices higher than that of apple.  This episode, I think, will haunt people for many years.

 

The onion price, a sensitive issue politically, started soaring in September last. It happened dramatically and climbed to eye-watering levels. While the writing of this piece was in the process (November 15, 2019), the locally produced (local variety) of onion was selling at Tk. 200 per kg in retail markets. Onions imported from India, Myanmar, and Egypt are sold at Tk. 150–160 per kg, whereas in today’s market chicken is sold at Tk. 150 per kg while apple at Tk. 180 per kg. This unusual high price of onion is attributed to production loss in some parts of India. As a result, India had raised the export price first and then stopped its export.

 

The Saga of Onion

 

Onion is a key ingredient in most Bangladeshi dishes. The sudden price hike has sparked anger among the population, not only against the government but also against onion traders for alleged collusion to raise the price. Some people are also airing anger on our neighbor – India -for raising the minimum export price first and then putting restrictions on its export. Such price surge usually hit the low-income people and poor households hardest. In India, the price hike of onion usually becomes a political issue. High onion prices, for example, were regarded as the decisive factor responsible for the defeat of the ruling party at the Centre and many state governments in 1980, and even may be the cause of losing a considerable number of seats in state legislatures of Maharashtra and Haryana at the end of October 2019.

 

It is difficult to guess what is the political ramification for high onion price here. Because these days voters in Bangladesh are not allowed to show their displeasure through the ballot. Nevertheless, onion has been hitting news headlines for months. This alone is indicative of huge social ramifications. In addition to regular news and editorials, columnists are also writing articles on issues related to onion giving their views, comments, suggestions, as to how the nation can produce more onions to meet the demand and keep the supply and price stable in the future and prescribing solutions, but always personifying onion traders for the price hike. Political leaders and civil society leaders are also not much behind. Some politicians even preaching the population that “eating onion is not necessary indeed”. As a consumer and businessman, I do not agree with such a solution to the onion crisis. Such solutions are like; “to avoid the headache, instead of medicine cut off the head”. Then there will never be a headache and no more troubles. Their mentality synonymies probably with their thinking of troublesome and incommodious democracy; that those who are shouting for restoring democracy and fundamental rights in the country, shall be implicated and incriminated in the false cases involving arson and violence. Then put them behind the Bar. That is the easy way to escape from the troublesome democracy and force them to forget about their rights eventually.

 

However, it is evident from multifarious activities that the government is also very concerned about the onion issue. Alongside the newspapers, government officials are also regularly talking about it. They seem to be very vigilant. They are very busy to increase the supply by removing various bottlenecks, including import and unhindered clearance at ports. Some businessmen cronies already opened a letter of credits for large scale import from various countries, probably at the expense of public because these cronies does not have to repay the loan to banks. As a matter of gimmicks, some even planned to import onion by air. Local officials are visiting wholesale and retail markets every day keeping their watchful eyes on sellers so they do not raise the price. In some cases, they are punishing onion sellers for selling it at a price which, they think, unreasonable. Newspaper reports shows more than 2000 onion traders are punished already. The police, RAB, intelligence agencies are also not far behind. They are collecting all types of market information and asking other agencies to take action against onion sellers, as they think necessary.

 

One may wonder what is the “reasonable price” of onions, anyway! Who does decide the reasonability? Columnists, government officials, law enforcement agencies, businessmen – who should decide or who has the rightful authority?

 

In the meantime hundreds of articles are written detailing the top to bottom and head to tails and historical background of onions from time immemorial like; when human civilization started to consume onions, is it vegetables or spice, why tears come out when you cut onions, how and why human use to consume onion as a power booster, the sacredness of onion, how and why some people in ancient time used to perform PUJA of Onion to enrich the afterlife, what and how many types of health benefits, taste, and smell of it, etc. etc. However, newspapers, television channels, columnists, consumers, consumer protection rights groups, officials of all ranks have something in common in their views; they all claim that the onion businessmen, including importers, traders, wholesalers, retailers all are in collusion and made a Syndicate to hike the onion price to make extra profits. Such collusion is to steal money from consumers’ pockets. This is immoral, if not illegal. I am not so sure what is the punishment for immoral behaviour in business or which part of the business is immoral or even illegal and what should be the punishment. All these reminds me of the old Bengali proverb – “JOTO DOSH, NANDA GOSH”. In other words, no matter what; all faults lie with onion traders, because they are culprit profiteers, and thus immoral. They are only after excessive profit. They are like blood-suckers who do not care about the misery of consumers.

 

If we take into account the news coverages of all recent issues of national importance like illegal casino operations by ruling party leaders, Abrar killing, Bhola incidence, clean-up campaign, rail accidents versus news related to onion, it will top all other topics. It also looks certain that the newspapers will continue to run reports on onion for a few months more. All this may sound very sympathetic to consumers to everyone but to me it seems like a choir, where consumer sympathizers are trying to provide solace to them but hardly it will be of any help to produce more onions, or any help to farmers to boost production or its supply in the market or to reduce the price.

 

Being a businessman, fortunately not involved in onion, trying to boost the productivity of many agricultural crops including onions and student of agricultural economics for many years, to reduce the supply gap and by virtue of heading FBCCI for two terms, I feel pity for these businessmen who are dealing with onions. I thought it will be not only frivolous but also immoral and unwise not to come forward to the defense of those businessmen who are working hard to ensure the stable supply of such important food items, but openly being accused of immoral profiteers in the eyes of the public. One may raise questions and ask why do I have to defend onion traders who are “unscrupulous”.  Many people may even believe that defending them will be an immoral act. To be the truth, everyday morning when I look into the headlines of at least 20 news dailies (English – Bengali) hardly I see not much of the news, other than fraudulent elections, stealing money from Banks, illegal business, killings, extrajudicial killings, forced disappearances, rapes, extortion, road accidents and deaths as a result, corruption, Money laundering etc. By seeing, hearing and reading such stories day after day, year after year, it has become very difficult to make a judgement and figure out which one is drama, which one is true or false, what is moral or immoral or what is even political. It has become also difficult to figure out between right or wrong. Thus it may be possible that part of my power of understanding may have extricated or became dysfunctional. Under such circumstances, I find some reason to defend them. Thus decided to write after a while. However, because of the negative perception of business as a whole, it may be worthwhile  to discuss the issue related to business, morality and profits, before I write in details about the onion production, productivity, supply, demand, shortage and storage, and other related issues including the cost of production of onion and profitability.

 

 

Business, Profit and Morality

 

Businesses must make a profit in order to survive, just as humans must breath to live on. Business houses are neither moral nor immoral, but people who run the businesses are. But making profit, on one hand, is an essential element for the efficiency of a productive society – efficiency in the sense of avoiding waste – and on the other, it is the determinant of production of right quantity of goods and services or to be imported by using the proper technology and market knowledge. On the other hand, profit is rightly associated with roguish materialism of life. Materialistic thinking always contrasts with the ideals of humanism and higher spiritual instincts, or the deeper meaning of life. According to contemporary Western morality; profit is good but profiteering is bad. Of the two grounds put forward, one is the immorality in earning an excessive profit or seeking ‘shameful gain’ from the handicap of one’s fellow-creature. Nevertheless, free-market economy or economic systems could not function well, without the gainful material consideration.

 

The principal argument against the classic liberal society is “that its economics is dominantly driven by profit motive”, and profit is immoral. It is associated with greed. Businessmen often fail to carry out their responsibility as they often seek only material gains to advance their own narrow interests and not those of the community as a whole. They become blind to their own gains at the expense of the social welfare of the community.

 

In free-enterprise society, profit is the driving force. But at the same time if someone is earning too high a profit by market standards, someone else will start a rival business, provided enterprises can be founded, run or shutdown freely by their owner. This is the  classical liberal principle. The new competitor will offer the same goods at a lower price, or better goods at the same price, or some other combination, forcing to reduce price and profit. Profit, after these market adjustments, is the market return on capital, in the same manner as wages are the market return for labour.

The quest for profit causes productive resources to flow into those fields whose demand exceeds supply and stay away from those whose supply exceeds demand, and thus profit is the regulator that causes the right goods and services to be produced, in the right quantities and at the right prices, to meet demand at a reasonable cost.

 

Profit VS Morality

I believe profit as a motive is overstated by those who oppose it on principle. Many entrepreneurs are motivated by occupational satisfaction as much as by profit, though profit is necessary for their survival. But interventionists tend to associate profit across the board with greed, racketeering, and other unpleasant and immoral instincts. In economic theory, classical liberals think of profit as merely the regulator of the market. Profit determines; what quantity to be produced, what should be the quality, who can buy such goods, what prices are to be paid, and who gets due benefit from the production and supply of goods. These activities may be associated with greed and may even lack the social consideration, but they may also be associated with acts of equity and humility.  

Nevertheless, morality, piousness, moral behavior, virtues, in a society is not the issue only applicable to businessmen. All these virtuous or traits collectively belong to all groups in the society; Doctor, civil servants, educators, politicians - all. One thing is certain that such traits are hidden in the political and social structure of the society, especially within the character of politicians. It will be absolutely wrong to expect morality only the businessmen, while all other groups are corrupt and lack morality. Anyway, now I would like to return to my to days subject of writing - ONIONS.

 

Demand Versus Supply

 

The demand for onions in Bangladesh is growing steadily in conjunction with the population growth and rising per capita income. The income and expenditure survey of BBS (2002-2007-2012)shows that the consumption of onion was 5.6 kg in 2002 and increased to 6.8 kg in 2005 and 8.2 kg in 2012 per capita per year. Such an increase in consumption equals to almost 4% per year. IFPRI (International Food Policy Research Institute)in their analysis in 2013 projected that by 2020 the demand for onions in Bangladesh will be about 21 lakh tons or yearly demand growth of 5% per year.

 

The IFPRI analysis also shows that urban residents in 2010 consumed 40% more onions per capita than the rural population. Thus, it can be assumed that as urbanization is accelerating even speedily than it was predicted in 2010, due to uneven rise in income among the urban and rural population, slow growth of rural non-farm employment, river erosion, climate change, so is the consumption of onions. It is estimated that the minimum demand for onion in 2018 was 29 lakh tons and may increase to a minimum 31 lakh tons in 2019. Therefore, the real aggregate onion consumption per capita has grown at a rate of 6% or more.

 

Import Statistics of the Bangladesh Bank (BB) and that of the Department of Agriculture Extension (DAE)estimated based on local production, show that the domestic production was 23 lakh tons in 2018, while its imported amount was about 11 lakh tons. This equals the demand of 34 lakh tons. However, BBS Household expenditure survey shows that the local production of onions is about 18 lakh tons and adding to the import of 11 lakh tons, the total consumption equals to 29 lakh tons. Taking statistics of both of these government agencies into account, we may come to the conclusion that the minimum demand for onions was 30 lakh tons, while the maximum was 32 lakh tons in 2018, or 31 lakh tons on average.

 

If we take into account a 7 percent growth, then the demand for onion in 2019 should be about 33 lakh tons. Price; the right price for any product simply means “whatever price consumers are willing to pay when no scarcity” or supply equals demand. Therefore, if onions are to be offered at the right price, then we must increase our production and import the right varieties preferred by consumers to equal the demand. For the production of onion, I don’t think, we are cultivating less land but our total production is not enough to meet the demand because of low productivity. On import, unless right statistics are available on-demand, the right quantity can not be imported at the right time to meet the demand.

 

 

 

 

 

 

 

 

Production Versus Demand and Yield per Acre (Table-1)

 

Below is the year-wise production Acreage; Total production and yield per Acre from 1999 to 2018.

 

Year	Area (acres)	Production		Yield	Import	Supply
	BBS	DAE	BBS	Yield/acre	BB	Import +Production
1999	82,000		131,000	1.60
2000	84,000		134,000	1.60
2001	84,000		127,000	1.51
2002	91,000		150,000	1.65
2003	93,000		153,000	1.65
2004	128,000		272,000	2.13
2005	213,000		589,000	2.77	128,000	717,000
2006	286,000		769,000	2.69	104,000	873,000
2007	318,000		894,000	2.81	148,000	1,042,000
2008	309,000		889,000	2.88	230,000	1,119,000
2009	266,000		735,000	2.76	310,000	1,045,000
2010	291,000		872,000	3.00	278,000	1,150,000
2011	316,000	1,591,000	1,052,000	3.33	323,000	1,375,000
2012	335,000	1,899,000	1,159,000	3.46	517,000	1,676,000
2013	332,000	1,488,000	1,168,000	3.52	653,000	1,821,000
2014	373,000	1,701,000	1,387,000	3.72	811,000	2,198,000
2015	419,000	1,930,000	1,704,000	4.07	880,000	2,584,000
2016	438,000	2,153,200	1,735,000	3.96	921,000	2,656,000
2017	459,000	2,330,000	1,867,000	4.07	953,000	2,820,000
2018	500,000	2,330,540	1,830,000	3.66	1,091,000	2,921,000

Source: DAE – Department of Agricultural Extension.

                BB – Bangladesh Bank – Year Book.

 

The above table brought quite a few issues to the forefront. These issues related to production acreage, productivity, yield per acre and discrepancies in production estimates between various government agencies. However, it does not give any indication as to what is the exact demand for onion. To make the production and import plan and prepare the implementation strategy to meet the future market demand, the first thing is to determine the exact demand. While the realistic consumption or demand seems to be 32 lakh tons, the supply seems to be gross quantity of 29 lakh tons or less. An exact quantity can not be determined because quantity imported before India prohibited export is not available. In addition, by its very nature, onion is not storable, and therefore certain percentage will be rotten and laid waste before it reaches to retailers.

 

Discrepancies in Production between DAE and BBS

 

Generally, the DAE plans the estimated acreage and production for all agricultural crops prior to production season each year, including onion. The DAE estimate is always 500-700 tons higher than that of the BBS. Reasons may be:

 

Methodology to estimate production

 

There is no real scientific methodology to estimate the ultimate acreage and yield per acre by the DAE, at least it is not known to the public. The DAE usually collects the information through its field offices to estimate the final acreage and quantity. However, there is a lack of precise information related to the type of seeds used for production and cultivation methods. Farmers usually use different types of seeds and cultivation methods, due to which the yield per acre and production quantity differ greatly.

 

Use of Bulbs to Produce Bulbs

 

Farmers store part of the onion bulbs for three reasons; (i) to cultivate onions through “Murikata” system in the next season (bulbs to bulbs); (ii) to produce bulbs which they use to produce seeds in the next season(seed to bulbs); and (iii)Using bulbs to produce seeds. It may be worth noting that the acreage cultivated to produce seeds does not produce marketable onions because bulbs are already rotten by the time seeds are ready to harvest.

Thus, the portion of onion produced never come to the market for sales. If the onion price goes up, as happens now(2019), then farmers sell part of this quantity for immediate profit. It is generally estimated that 10–12% of the total acreage is cultivated by bulbs (Murikata Systems) rather than from seeds. Each acre requires about 450 - 500 kg bulbs and therefore farmers require about 30,000 tons bulbs to cultivate 60,000 acres. Though produced, this quantity never comes to the market for sales.

 

Use of Bulbs and lands to Produce Seeds

 

Farmers produce about 800 tons of onion seeds for their own use. Production of seeds per acre about 150 kg. As such it requires about 7 acres of land to produce one ton of seeds. To produce 800 tons of seeds, it requires about 7,000 acres of land and 4,000 tons of bulbs. Thus, irrespective of the total acreage of cultivation and quantity produced, about 30,000 tons of bulbs never make to the market because land cultivated for seeds does not produce marketable onions. When seeds are ready to be harvested, the bulbs are already rotten.

 

Seed production reduces marketable onion in two ways; first - for 7,000 acres of seed production it requires about 5,000 tons of bulbs. Secondly - as per BBS productivity report of 4 tons per acres, the 7,000 acre could produce 28,000 tons. By adding 5000 tons of bulbs required and loss of 28,000 tons of bulbs production, both equal to about 33,000 tons. This quantity should be deducted from the estimated quantity.

 

Cultivation Method VS Productivity

 

The cultivation method make a great difference in terms of yield per acre and the total production. Usually, farmers on both sides of the Brahmaputra River cultivate onions by ‘broadcasting’ methods. These seeds are usually imported. In this method of cultivation and the type of seeds farmers use, the per acre yield is generally less than the ‘transplanting’ method. The quality of these onions is also different and storability is minimum, only about six to eight weeks.

 

Type of Seeds VS Productivity

 

The types and quality of seeds even make a bigger difference in yield per acre. Irrespective of yield, about 25–30% of the onions produced from farmers to farmers seeds are split bulbs. Most of these quantities, do not come to the market as onions.

 

According to various estimates, farmers use quality seeds in just about 20% of cultivated areas. The yield in these acreages is higher, and the percentage of split bulbs are much less. Therefore, we can reasonably estimate that the total production of marketable onions maybe somewhere only 13 to 14 lakh tons.

 

All or part of the above reasons may be attributed to reasons for the discrepancy between the DAE and BBS estimation of onion production in Bangladesh.

 

Acres of Production

 

Though DAE claims the cultivated acreage about 5 lakh acres but; about 7,000 acres are cultivated to produce bulbs that are used in the next season to produce onions.

 

30,000 acres are used to cultivate bulbs, that will be used to produce bulbs next season.

 

 

Type of Seeds VS Split Bulbs

 

As stated earlier farmers use total 1300 tons seeds to cultivate onions of which 500 tons are imported. 700 tons are farmers to farmers seeds. Only 100 tons of slightly better quality seeds are used to cultivate.

 

Seed the rate for cultivation is about 3 kg per acre. Thus, 250,000 acres are cultivated with their own seeds and 35,000 acres with slightly better seeds. As such total 285,000 acres are cultivated with local seeds. If yield per acre is 4 tons, then the total production will be equals to about 11.50 lakh tons.

 

However, 30% of these bulbs are split bulbs and equals to 350,000 tons. This quantity is never made to the market. These are consumed by farmers themselves and partly laid to waste..

 

Water Contents VS Storability

 

The main problem with onion is water content. The water content in the bulbs usually high, depending on the variety.

 

At the time, onions are harvested the water content remains very high and as it dries up in the farmers’ houses, there is a weight loss. The quantity depends on how long it remains in the farmers’ houses before it is taken to the market.

 

In addition, as the onions are dried up, a few layers of skins at the upper level are dried up and fallen. Thus, a small weight loss is usually there as well, though not so substantial. Some onions always get rotten while in the farmers’ houses.

 

The problem turns very acute if there is rain prior to harvesting. In that case, the farmers harvest a bit early before bulbs are fully blown to avoid possible rain. Otherwise, there may be an intrusion of rainwater inside the bulbs. This inevitably decreases the storability and increases the chances of rotting early.

 

Handling Wastage

 

Finally, there are some wastage incurs during the storage, processing, grading, handling, transporting between farmers’ houses to the local market, and then the local market to wholesalers and retailers, and finally to the consumers.

 

Myth VS Reality of Storability

 

There is a myth that cold storage (like potatoes are stored) is the answer to increase the storability of onions. Some also assert that if farmers have access to cold storage then they can sell onion throughout the year and sell it when price rises in the market. This will help them make more money.

 

This is not really a feasible proposition indeed because of the high-water contents in onions. Local varieties can be stored in farmers houses for 8-10 months.

 

Production Season – Bangladesh VS Elsewhere

 

Countries like India, Myanmar and Pakistan have vastly different agri-ecological zones and various ecosystems, including lowland and highlands. This allows farmers of these countries to produce onions throughout the year in all 3 seasons at one place or another. In Bangladesh, farmers can produce onions only in Boro Season.

 

Therefore, the answer to producing more onions, to meet the demand, lies in the improved high-yielding variety of seeds which are preferred by consumers, as well as 8-10 months storability in normal conditions at farmers’ houses.

 

Vegetables OR Spice – The Types of Onion

 

In some parts of India, Pakistan and other places, onions are consumed as vegetables, but in Bangladesh onions are consumed as a spice.

 

Local consumers prefer golden colour and high pungency of 17-18 Mumo (gm). The imported onions do not have such a level of pungency. Consumers preferences can be seen from the prices on onions in the market. There are always two prices -- one for the local onions which is always higher than the imported ones. For example, at present (November 15) the price of local onion is Tk. 200 per kg, while that of the imported onion Tk.160-170 per kg. The price of local onion is always 20% to 25% higher at any given time of the year.

 

Additionally, farmers require the onion variety which contain less water content for long storability. All these traits are available in the local ‘Taherpuri’ variety. This is small in size and its per acre yield is very low.

 

Statistics – Production, Supply and Demand

 

The other problem is the availability of the realistic supply and demand statistics. Without knowing the real demand, it is very difficult for the importer to make a pragmatic import plan and timing to import to meet the market demand. Unrealistic or wrong statistics create more problems and confuse the market. As stated times and again earlier the storability of onions is very short. Therefore, realistic production and demand statistics is very vital.

 

Production Acreage VS Productivity

 

Between 1995 to 2003, the acreage of cultivation and the production of onion in Bangladesh remained almost stagnant, at about 90,000 acres and the quantity of production less than 140,000 tons per annum, while the yield per acre was low and stuck within the range at about 1.65 tons per acre.

 

In 2004, a slightly better seed of ‘Taherpuri variety’ was available to farmers which helped the acreage, total production and the yield to increase. Between 2004 to 2009, the acreage jumped from the average 90,000 acres to 270,000 acres, an increase of almost 300%, while the total production increased from the average 140,000 tons per year to 750,000 tons, an increase of 500%. Similarly, the per acre yield increased by 10% during these 6 years to 2.99 tons from 1.65 tons per acre, an increase of 1.34 tons per acre.

 

From 2009, even a better and improved seed of ‘Taherpuri variety’ was available to the farmers and they responded very positively by increasing the acreage and producing more onions. And the per acre yield increased even further. For example, in 2009, the onion cultivation acreage was 2.7 lakh acres, while it got increased to 5.0 lakh acres in 2018, an increase of 185%, while the production of onion was increased from 9 lakh tons to 18.30 lakh tons, an increase of 205%. During these periods, the average yield increased to 36%, from 2.99 tons per acre to about 4.09 tons per acre. The farmers increased the acreage because of availability of better seeds which give more yield per acre and they made more profit out of the onion cultivation.

 

The productivity of seeds of different qualities of the same variety of onions are given below:

Table-2

Comparison of Characters and Yield of Taherpuri Variety

Characteristics	Farmer Seeds (Local)	Quality Seeds (Local)	LT-20	LT-King	LT-HYBRID (LT-(F1)
Sowing Time	Oct/Nov	Oct/Nov	0ct/Nov	Oct/Nov	Oct/Nov
Harvest days bulb	105-110	120-135	120-135	105	90-105
Harvest days seed	140-145	140-145	140-145	145	140
No. of Bulb/kg	28	26	25	20	15
Pungency Mumo (gm)	17.55	17.55	17.88	17.55	17.88
Storability: months	8.5	8	8.5	9	12
Yield/acre(Kg)	4500	5000	6000	10000	13000
Grade-A	40%	45%	50%	82%	98%
Grade-B(Poor size &shape)	30%	25%	30%	14%	2%
Grade-C (Split bulb)	30%	30%	20%	4%	-

 

 Genetic Deterioration of Seeds

 

Though in the above table, LT-20 and LT-King showing per acre yield 6 tons and 10 tons respectively, the average present yield is expected to be only 4.5 tons and 9 tons. Both of these are HYV version of ‘Taherpuri’; the dominant Bangladeshi variety originated in Taherpur, Rajshahi. This variety is small in size but high in pungency, compact and water contents are very low. As such it can be stored in normal conditions at farmers’ houses for eight to ten months. These varieties are open pollinated (OP) and farmers can reproduce the same seeds year after year.

 

Biological products like seeds usually deteriorate genetically and start losing its traits over the years, and therefore will not perform in terms of vigor and yield as original. To keep the performance same as original, continuous genetic purification of parental line is required, which farmers are unable to do. Science comes into play here.

The new hybrid of Taherpuri variety is available to farmers from 2019. The yield per acre of the newly developed hybrid is about 13 tons. Therefore, by planting hybrid seeds, whether or not acreage increases, the yield per acre will increase remarkably. As a result, the total production of onion will increase substantially in the future.

 

Seed VS Productivity

 

As stated above, the fundamental to agricultural productivity is the quality of seeds. Irrespective of fertility of lands and usage of other inputs, like labour, fertilizers, water, pesticides etc. If the quality of seeds is not good, the yield will never be good, no matter what quantity of other inputs are used.

 

The total quantity can be increased by increasing the land acreage but the yield per acre fundamentally depends on the quality of seeds. Seeds with better traits like; better yield, resistance to disease, tolerant of biotic and abiotic stresses are fundamental to have more yield. The more yield per acre means, not only more of total production and stable supply but also the price will be competitive and less dependent on import.

 

More yield also means more income for farmers. The more profits they will make, the more lands they will cultivate, and that is the way we can increase the total production to meet the total demands.

 

Comparison of Yield with Selected Countries

 

It is estimated that at present almost 500,000 acres of lands are cultivated to produce onions. The yield per acre is estimated at about 4 tons (3.66 tons – BBS). Before I discuss the various type of seeds used to cultivate onion by farmers, let us see the comparison of yield per acre of few selected countries:

 

 

 

 

 

 

Table-3

Yield per Acre in Different Countries

 

Country	Total production (Million tons)	Per Acre Yield (tons)
USA	3.70	27.04
South Korea	1.41	26.53
China	24.34	8.94
India	22.43	7.09
Pakistan	1.83	5.49
Bangladesh	1.83 (BBS)	4.07

 

 

It is of no use to compare the yield per acre with the USA and South Korea because these are of vegetable grade onions. These onions are red in color, large in size, very high in water content, low storability and hardly pungent. While local consumers prefer high pungency, farmers require varieties with low water content and more storability. Even then, the yield per acre should be no less than Pakistan or India i.e. The minimum yield should be 7 tons per acre.

 

Main Production Areas and Yield in Bangladesh

 

Out of the country’s 64 districts, nine districts cover almost 79% of onion production areas and 81% of the total onion production. The highest production in Pabna (22.86%) followed by Faridpur (17.86) and Rajbari (14.08%), while 23.09% of the total production comes from Pabna, followed by 21% from Faridpur and 9.8% from Rajbari.

 

Table-4

 

Major Onion growing districts of Bangladesh during 2016-17

 

District	% of total Onion production area	% of Total onion production	Average yield District-wise (MT)
Pabna	22.86	23.09	4.11
Faridpur	17.86	20.66	4.71
Rajbari	14.08	9.08	2.62
Rajshahi	6.00	8.62	5.83
Kushtia	5.60	6.83	4.90
Manikganj	3.88	2.58	2.70
Jhenaidah	3.54	4.50	5.18
Magura	3.02	2.97	3.99
Madaripur	2.09	2.78	5.39
Total	78.93%	81.11%

From the above table, readers can see that only nine districts cultivate 79% of the total acreage and 81% of the total production. In addition, the yields in some districts like Manikganj and Rajbari are very low, less than 3 tons, while in districts -- Rajshahi, Kushtia, Jhenaidah and Madaripur –it is more than 5 tons per acre.

 

Considering the total supply (?) of Bangladesh at present (2018), local production of 18.30 lac (BBS) tons and the import of 11 lac (BB) tons, the supply equals to 29.30 lakh tons. Had the yield been 7 tons per acre, we would have to cultivate only 4.5 lakh acres. In otherwords, the present acreage is near about sufficient to meet the country’s requirements. However, the yield per acre is far less than its potential because of low quality of seeds. As a result, we are unable to produce enough to meet the demand.

 

Increasing the Production

 

For onion or for that matter of any other agricultural crop, the production can be increased in two ways -- by increasing the acreage or by increasing the yield per acre. In Bangladesh, between 2000 to 2018, the total production of onion increased from 90,000 to 1,830,000 tons, an increase of 2000 times. This is phenomenal indeed.

 

Such increase is contributed, partly by increasing the acreage and partly by increasing the productivity in the per unit of land. This is almost classical. The increase in production are contributed almost 50% from the expansion of cultivated area and balance 50% increased due to increase in yields.

 

This also indicates that Bangladesh is in a position to meet its demand by increasing the production both ways. Therefore, producing more with less resources and better inputs to improve the agricultural productivity should be our main focus.

 

Seed is the starting point to increase the agricultural productivity and enhance the farmers household income.

 

Land used for Seed Production

 

Onion bulbs are needed to produce onion seeds. Unlike other agricultural crops, onion seeds cannot be produced from the seeds. It is a two-year cycle for seed production. To clarify, seeds are planted to produce bulbs in one season; and then bulbs are planted to produce seeds in the next season. I am convinced that like rice, as and when better HYV and hybrid onion seeds will be easily available, farmers will gradually reduce the production of their own seeds.

 

Lack of scientific knowledge of modern cultivation management for seed production, seeds that are produced by farmers are of very low quality. As a result, onions produced from their own seeds, the yield is very low. As and when, farmers will get better seeds they will reduce the production of seeds. As a results lands, which are now used to produce seeds will be available to cultivate onions for the market.

 

 

 

Climate VS Onion Seed Production

 

There are other serious problems to produce quality onion seeds in Bangladesh. For the production of quality seeds during the flowering time, day and night (hours) should be more or less equal and the day and night temperature has to be similar for about three weeks.

 

The other problem is to ensure the availability of right pollinators to pollinate at right time. In the case of onion, Bees are the pollinators. Due to climate change, sometimes enough Bees are not available at right time.

 

Additionally, Bees may be attracted to other crops of their likening at the time. For example, in 2016, one onion seed producer in Faridpur area complained that there were hardly any Bees in his onion field. After careful investigation, it was found that around half a mile away some farmers were producing the cumins. Bees were attracted much more to cumin flowers, leaving the onion field empty.

 

These are the issues agricultural scientists have to identify and solve in the future to ensure not only to increase the productivity but also sustain the present level of productivity.

 

Costs and Profitability of Onion Production

Based on integrated household survey (BIHS), a nationally representative survey conducted by IFPRI – PRSSP in 2013 provides the estimates of production costs and net profits from onion cultivation. The average cost of onion production on a cash cost basis (not including the cost of land rent and family labor) was Tk. 38,761 per acre, while on full cost basis (including land rental and family labor cost) the average production cost was Tk. 54,146 per acre. Based on this, the net profit (gross revenue minus the production cost) was Tk. 35,197 per acre on a cash cost basis and Tk. 19,812 per acre on full cost basis.

As the cost of production, yield per acre and the market price of onion increased over the last five years. The recent estimate shows that cost of production increased to about Tk. 92,000 per acre on full cost basis while the net profit increased to minimum Tk. 22,000 per acre of onion production. However, it may be noted that with the use of quality seeds, as yield increase the profit per acre increase dramatically.

Present cost of Production – Full Cost Basis

Table-5

Full cost of Production per Acre

 

Sl.#	Cost Centre	Farmers seeds	Local quality seeds	LT-20 improved	LT-King HYV	LT-Hybrid
1.	Cost of Seeds	4000	4400	6000	13500	21000
2.	Seedlings	2697	2697	2697	2697	2697
3.	Transplanting	2737	2737	2578	2578	2578
4.	Land
	a) Seedlings – Rental	2380	2023	1428	1428	1428
	b) Main Land – Rental	23800	23800	23800	23800	23800
5.	Labor – Seedlings;
	a) Seedlings	2856	2856	2856	2856	2856
	b) Transplanting	14677	14677	14280	14280	14280
	c) Weeding etc.	7140	7140	7140	7140	7140
	d) Harvesting	9123	9123	9123	9123	9123
	e) Processing	6029	5950	5633	5236	4998
	f) Grading / Storing	2539	2539	2063	1904	1349
	g) Transport to Market
6.	Water	5633	5633	5633	5633	5633
7.	Inputs
	a) Fertilizer DAP	2578	2578	2578	2578	2578
	b) MOP+ Zink	1507	1507	1507	1507	1507
	c) Urea + Boron	1309	1309	1309	1309	1309
	d) Sulphur	714	714	714	714	750
8	Pesticides	3173	3173	3213	3292	3332
9	Storage Rotting
	Total Costs of Production	92891	92855	92551	99573	106356
	Yield per acre (kg)	4500	5000	6000	10000	13000
	Grade-A (%)	40%	45%	50%	82%	98%
	Grade-A Quantity (KG)	1800	2250	3000	8200	12740
	Grade-B(%) Poor size/ Shape (Kg)	30%	25%	30%	14%	2%
	Quantity (Kg)	1350	1250	1800	1400	260
	Grade-C(%) (Split)	30%	30%	20%	4%	-
	Quantity (Kg)	1350	1500	1200	400	-
	Price
	Grade-A per kg	30	30	30	27	27
	Value (Tk)	54000	67500	90000	221400	343980
	Grade-B per kg	20	20	20	25	20
	Value (Tk)	27000	25000	36000	35000	5200
	Grade-C per Kg	10	10	12	12	-
	Value (Tk.)	13500	15000	14400	4800	-
	Total Sales Value (Tk.)	94500	107500	140400	261200	349180
	Total cost / Acre	92,891	92,855	92,551	99,573	106,356
	Profit /Acre	1,609	14,645	47,849	161,627	242,824
	Profit / Kg	0.36	2.93	7.97	16.16	18.68

·         Source- farmers from Faridpur District

Note:   1. Costing for Broadcasting Method of Cultivation not included.

             2. Profit per acre or per kg depends on type of seeds farmers use to cultivate

                            

Low Yield – Low Profit

 

From the above table one can see that seeds are produced by farmers has the lowest yield and also lowest profit per acre. The farmers usually buy low quality seeds in order to lessen the production cost. But the combination of low yield and low price of onions during the harvesting season, deprive them of earning reasonable profits. Low quality seeds at low prices come at the high cost of low yield. This also deprive the nation of more production of onions and makes the country import dependent.

 

 

 

The main problem with low quality seeds is split bulbs. Split bulbs constitute almost 30% of the total yield. These are not marketable which deprive farmers of more income and nation of more marketable onions.

 

To improve Farmers Income

 

As the better seeds like improved high yielding (HYV) and Hybrid varieties will be available to farmers, it is expected that per acre yield will go up. More yield per acre also means more income for farmers. As the profit will rise, so will be the acreage.

 

To encourage farmers to produce more onions; (i) government should not allow import of onions during the harvesting season (March to May); (ii) or should impose taxes on onion import during this period; (iii) encourage farmers to use better seeds by way of providing incentives. These will encourage farmers to cultivate more and allow farmers to enhance their income from onion cultivation, while total production of onion will increase and reduce the need for import. So long we will remain import dependent, the onion price in the local market will be “price dependent of other countries”, irrespective of supply situation.

 

It must be noted that it is not feasible to import onion from a far-away country because it takes too long to transport. The storability of onions is too short. Therefore, the best strategy for Bangladesh is to induce the farmers not only to increase the cultivation of acreage but also to use better inputs like better seeds for better yield per acre.

 

 

Profit - Smallholder VS Traders

 

Onion production in Bangladesh, like other agricultural products, is smallholder centric. Many farmers do not own the land. They take it on lease to cultivate onions. As such, they are forced to sell the produce, soon after the harvest to pay the rent and repayment of loans taken to cultivate or to meet other household expenses. The imported onions compete with the locally produced onions during the harvesting season and depressed the price. Such competition in wrong time deprives the farmers of their rightful earnings. The income is needed to induce farmers not only to cultivate extra land but also to buy better inputs like seeds for better yield.

 

As the price is always very low during the harvesting season, local traders purchase onions from the farmers at a very low price and store that to sell later at a better price. This way local traders make the profit but farmers are deprived of their income. They can make a reasonable profit if they get the fair price during the harvesting season and if the yield is better.

 

Future Demand of Onions

 

According to IFPRI – PRSSP study (2013), the demand for onion will be about 21 lakh tons by 2020 but based on the BBS estimates of production and BB’s statistics of import, it is estimated that in 2018 the real supply of onion was about 31 lakh tons. Based on the above statistics the estimated supply is nine lakh tons more but in reality, there was a short supply in the market.

 

The IFPRI estimated the growth in consumption at about 5% per annum but based on production and import statistics, the actual growth in consumption seems to be at least 6% per annum. Based on the population growth and accelerated urbanization at present due to rising income inequality between rural and urban wages, river erosion, etc, the demand for onion may increase at the rate of 7 to 8% per annum in the near future. Thus, by 2025 the total demand for onion may be about 40 to 41 lakh tons.

 

At the present rate of yield-- 4 tons per acre --it will need onion cultivation of about net 10 lakh acres, which may not be possible, because of other competing crops. Thus, the only alternative is to increase the productivity per acre from the present 4 tons per acre to 7 tons per acre. As stated above, the fundamental to agricultural crop productivity is to ensure improved seeds. For the onion, we must develop the kinds of variety which is preferred by farmers and consumers both. One foreign onion breeders recently commanded that the preferred variety to consumes and farmers is very unique to Bangladesh.

 

Future Cultivation VS Productivity

 

However, as the profitability for onion production will increase, the land area for onion cultivation will also increase but more slowly. Therefore, the supply will increase but not in conjunction with the demand. By 2025, we may assume, the land acreage may increase to 6 lakh acres from the present 4.5 lakh acres (net). By taking into account the 20%(percentage) of land usually cultivated to produce bulbs for the future production of seeds and bulbs to produce seeds, the most likely scenario will be 6 lakh acres to be cultivated to produce onion for the market.

If the country wants to meet the market demand of 41 lakh tons in 2025, at the present yield rate of 4 tons per acre, the total production will be only about 24 lakh tons, leaving a supply gap of 19 lakh tons. If the productivity (yield) per acre increases to 5 tons per acre, then the total production may increase to 30 lakh tons, and the total production will be 42 lakh tons at the yield rate of 7 tons per acre. In this scenario, the supply will exceed demand.

 

In fact, as the profitability from the onion cultivation, will rise due to higher yield with better quality seeds, the cultivating areas may exceed 6 lakh acres. In that scenario, the nation may save itself from the curse of import. The yield of new hybrid variety available to farmers from 2019 has the yield capacity of 13 tons per acre.

 

Hypothetically, if 50% of 600,000 acres are cultivated with the hybrid, then the production scenario will change drastically. If onions are cultivated in total 600,000 acres and  50% or 300,000 acres are cultivated with the present OP seeds and the average yield increases from present 4 tons to 5 tons per acre, then production will be net of split bulbs 10.5 lakh tons. If balance 50% are cultivated with hybrid, the average yield will be 12 tons per acre or production 35 lakh tons net of split bulbs. This will bring the total production of onion to near about 45 lakh tons. If we can produce 45 lakh tons, then the supply will exceed the demand.

 

Climate Change VS Food Security

 

Producing more food with fewer resources and better inputs to improve agricultural productivity should be the main focus of agricultural scientists and policymakers. This is the foremost challenge for Bangladesh today. United Nations Convention to Combat Desertification (UNCCD) has insisted that there is an urgent need to improve agricultural productivity to meet the present and future demands for food. The climate change is already making food insecurity worse and global agriculture crop yield may diminish by 30% by 2050. Bangladesh is identified in report after report by various international agencies as one of the 10 worst-affected countries. The sea-level rise due to the melting of Arctic ice and mountain glaciers, as well as changes in the mountain ecosystems due to temperature rise and changing pattern of snowfall, will affect Bangladesh in the worst possible manner.

 

A country with 165 million (2018) and expected to reach 250 million by 2050, Bangladesh must enhance food security through increased food production. This is a vital concern and, of fundamental importance because more than 50% of the population still makes their living from the agricultural sector. They are mostly living in the low-lying deltaic region which is threatened due to sea-level (salt) rise, erratic temperature and rain falls as well as increasing number of cyclones. Raising agricultural productivity and innovation of preferred resilient crop variety may be the only way-out to ensure food security and lifting millions out of poverty.

 

Agricultural Innovation VS Poverty Reduction

 

Agricultural production in Bangladesh is dominated by smallholder farmers, whose average land holding is less than 0.62 acre. They mostly rely on traditional farming. Low yield due to low productivity and low income from agricultural produce, lack of right government policy or any incentives, underdeveloped value chain system, not getting the fair price during harvesting season, and suffering from nutritional deficiency created a poverty trap for these people. Accelerating innovations in agriculture to improve the lives of smallholders (marginal) and their family members should be the immediate goal of government policy.

 

The seed is the starting point to enhance agricultural productivity and increase food production. As such, the availability of quality seeds, and farmers knowledge and ability to use modern cultivation methods can make the real difference in agricultural production and ensuring a better life for them.

 

The time is running out for tackling the poverty for the overpopulated Bangladesh and therefore it is important to accelerate the agricultural R&D to enhance productivity and the livelihood of smallholder farmers and break the vicious cycle of poverty. As the effects of climate change is already affecting the marginal farmers, the future agricultural productivity and sustainability will depend on overcoming the challenges of conservation and scientific management of soil, prudent use of water resources, availability of suitable seeds and other inputs, adaptation and mitigation of climate change, improved cultivation methods, and integrated pest management. Combinations of all of these above can help increase productivity per farmer, per small unit of land, per drop of water and per unit of other inputs.

 

The production of onion is profitable in Bangladesh at the farmer level even with the low yield per acre. But the increase in onion acreage is also dependent on its competitive crops. Onion has to compete mainly with mustard, groundnut, mung bean, cabbage, cauliflower, wheat and maize during the season. A field-level investigation by BARI revealed the profitability of onion is better compared to other competitive crops. However, non-availability of better yielding quality seeds and lack of knowledge of modern cultivation practices are responsible for its low productivity at farm level and depriving farmers of their enhanced income prospect from onion production.

 

Innovation by Lal Teer Seed Ltd.

 

With these background, Lal Teer Seed Limited had undertaken a realistic breeding strategy in 1996 for the varietal development programme for onion. By 2003, LTSL developed a local OP variety, named LT-20, with 20% more yield.

 

By 2008, LTSL developed another poly-crossed HYV variety named as LT-King, and the yield increased to 11 tons per acre which is 80% more yield than LT-20.

 

Finally, after 23 years of relentless work by our Scientists and Plant Breeders, LTS in 2018 developed the hybrid of Taherpuri variety, named LT Hybrid Onion(F1), the first of its kind in Bangladesh. This hybrid meets the requirements of both farmers and consumers in terms of colour, high pungency (like Taherpuri), less water contents and storability of 12 months. Even more important; 98% of bulbs are of single bulbs, compared to 70% only single bulbs in OP varieties. LTSL started marketing the variety in 2018. The variety was accepted well by the onion growers across the county. As more and more growers will cultivate this variety, it is expected that both the acreage and yields per acre will increase in the near future, and Bangladesh will be able to reduce the import of onions.

To realize such a goal, Lal Teer Seeds is investing in R&D not only to develop vegetables but in rice, the main staples of Bangladesh’s and livestock breed development suitable for Bangladesh Climate and feed availability to increase the milk and meat production. All these activities are smallholder (marginal) farmers and down trodden women centric.

 

SDG and Access to Seed

 

193 Member States of the United Nations have adopted the Sustainable Development Goals (SDGs) in September 2015 which are the priorities for the world upto 2030. There are 17 SDGs in total. Improving the productivity of smallholder farmers is one of the main target.  Smallholder farmers need to not only produce more food, but at the same time adapt their agricultural practices to changing weather conditions caused by climate change. By improving access to quality seeds, seed companies can make a vital contribution in supporting smallholder farmers with overcoming this challenge.

 

Access to Seed Index

 

The Access to Seeds Index an initiative funded by the Bill & Melinda Gates Foundation and the Government of the Netherlands, aims to encourage seed companies to step up their efforts to support smallholder farmer productivity. By benchmarking seed companies the index gives credit to companies that show leadership and encourages others to follow their example. It also provides valuable information for governments, research institutes and donors interested in breeding partnerships with seed companies. The Index had explored the contribution of seed companies in six dimensions; availability, affordability, sustainability, capability, profitability and autonomy. It also reviewed the activities in breeding, production, marketing & adoption and how companies are tailored to smallholder farmers.

 

Ranking of LTSL in South & South East Asia

 

In 2019 Access to Seeds Index for South & Southeast Asia (17 countries) published recently, Lal Teer Seed Limited ranked 13 for their leadership to support the productivity of the smallholder farmers. The evaluation is made at the global and regional level, including the differences and similarities in the roles global and regional companies play in reaching smallholder farmers.