Minimum export price fixed at US $475 a tonne. Will it profit farmers?
The Empowered Group of Ministers, headed by finance minister Pranab Mukherjee, has decided to lift the ban on onion exports. Onions can be now exported subject to a minimum export price (MEP) of US $ 475 per tonne.
In a press statement issued in Delhi on Tuesday, commerce secretary Rahul Khullar said, “MEP will be reviewed every fortnight and a close watch would be kept on domestic arrivals, total exports, overall domestic availability and domestic prices.”
The government had imposed a ban on onion exports on September 9 to check its spiraling prices which touched Rs 25 a kg in retail. The argument was that the prices were rising as the onion crop in Maharashtra and parts of Karnataka were affected due to rains. The ban had an immediate impact on prices with wholesale prices dropping between Rs 2 to Rs 5 per kg.
|Year||Onion Export from India
(quantity in tonnes)
|Export value in
|Onion Production: state-wise area, production and productivity of onion (2009-10)|
(In thousand hectares)
(In thousand tonnes )
The government’s move had sparked a protest in onion growing states of Maharashtra and Karnataka with farmers pressurizing the government to lift the ban.
Interestingly, agriculture experts say the MEP of US $ 475 per tonne is very high. A farm economist from Punjab Agricultural University said that competitors like China and Pakistan are selling onion at around US $ 170 to 180 per tonne in the international market and finding the price (US $ 475) which Centre has decided is really very difficult. He added that with lifting of export ban, farmers are not going to make much profit because when they will bring their bulks in the market, the prices are likely to fall.
“The export ban policy of India for cash crops like basmati rice, onion and sugar is faulty and farmers have to suffer because of it most of the times. There is no strategy or policy in India that governs export bans. Export ban is an arbitrary decision of the government,” he adds.