The onion price crash witnessed during January–April 2025 once again exposed the structural weaknesses of India’s agricultural economy. The falling prices offered short-term relief to consumers but triggered widespread distress among farmers. Many farmers, under compulsion, sold their produce below the cost of cultivation during the early months of 2025. This crisis was not merely a seasonal fluctuation but a reflection of deep-rooted issues, like volatile markets, inadequate infrastructure, fragmented supply chains and ineffective policy mechanisms. Despite a bumper harvest in 2025, the lack of cold storage and coordinated marketing led to market gluts and collapsing prices. Small and marginal farmers, who dominate onion production, were especially vulnerable due to limited access to storage, credit, insurance or reliable price information. Government responses during this period were largely reactive, prioritizing consumer interests over producer stability. This note argues that sustainable solutions require structural reforms: investment in storage and logistics, predictable trade policies, direct farmer-market linkage and price stabilization tools, such as minimum purchase price (MPP). JEL Classification: Q11, Q12, Q13, Q15, Q18
A. Narayanamoorthy (Thu,) studied this question.