Export Potential of Onion: a Case Study of India

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  • Topic: Agriculture, Onion, Andhra Pradesh
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REGIONAL WORKSHOP ON COMMODITY EXPORT DIVERSIFICATION AND POVERTY REDUCTION IN SOUTH AND SOUTH-EAST ASIA (BANGKOK, 3-5 APRIL, 2001)

ORGANIZED BY UNCTAD IN COOPERATION WITH ESCAP

Export Potential of Onion: A Case Study of India

By V. C. Mathur
Senior Scientist
Division of Agricultural Economics
Indian Agricultural Research Institute

Agriculture occupies an important position in India as it contributes nearly 30 per cent of the gross domestic product and provides employment to around two-thirds of the nation’s population. A large variety of tropical, sub-tropical and temperate crops are cultivated in the country supported by a climatically conducive growing environment, highly skilled manpower, extensive irrigation system, a well-developed extension and research and development network, and a large market for agro- products. The total net sown area in the country is around 143 million hectares, which is around 43 per cent of the geographical area. The net irrigated area is around 55 million hectares or 39 per cent of the net sown area. However, one important emerging feature of Indian agriculture is the increasing number of marginal (less than 1 ha) and small size holdings (1.0 to 2.0 ha). Between 1985-86 and 1990-91, the number of marginal holdings increased from 56.147 million to 63.389 million, while the small size holdings went up from 17.922 million to 20.092 million. Even the number of semi-medium size holdings increased during the same period from 13.252 million to 13.923 million. According to the 1990-91 Agricultural Census, 91.3 per cent of the total holdings in the country comprise marginal, small and semi-medium holdings which together account for 55.6 per cent of the operated area. This decreasing size of operated area often diminishes the efficiency of production and the bargaining power of the individual farmers in the market.

Agricultural commodity exports account for nearly 20 per cent of the total export earnings of the country. Coffee, tea and mate, oil cakes, tobacco, cashew kernels, spices, raw cotton, rice, fish and fish preparations, meat and meat preparations, fresh fruits and vegetables, and processed fruits and vegetables constitute the major export items among agro-products from the country. Among the horticultural commodities, processed fruits and vegetables accounted for the largest share of exports followed by fresh fruits and vegetables. Among fresh vegetables, onion, tomato and mushroom are reported to be highly export competitive (Kumar, 1996; Paroda, 1999).

Onion is one of the important vegetable crops grown in India. In terms of area, India ranks first in the world with over 480 thousand hectares accounting for around 21 per cent of the world area planted to onion. Globally, the country occupies the second position after China in onion production with a production share of around 14 per cent. Productivity, however, is low at around 11.4 mt/ha, which is lower than the world average of 17.3 mt/ha. Besides India and China, the other major onion producing countries are Turkey, Pakistan, Brazil, United States of America, Iran, Spain and Japan. In India, onion is extensively cultivated over a large area spread almost throughout the country. It is produced for both domestic consumption as well as exports.

Domestic Production

Onion is a crop of national importance and considerable attention has been paid by the National Agricultural Research System of the country to the improvement of this crop. The National Horticultural Research Development Foundation, sponsored by the apex level cooperative called the National Agricultural Cooperative Marketing Federation of India (NAFED), and the National Research Center on Onion and Garlic of the Indian Council of Agricultural Research (ICAR) are...
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