Onion export ban lifted

Minimum export price fixed at US $475 a tonne. Will it profit farmers?

 
By Jyotika Sood
Last Updated: Saturday 04 July 2015

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.

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 ban had an immediate impact on prices with wholesale prices dropping between Rs 2 to Rs 5 per kg
The ban had sparked a protest in onion growing states of Maharashtra and Karnataka with farmers pressurizing the government to lift the ban
Agriculture experts say the MEP of US $ 475 per tonne is very high
 
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.

Onion exports
Year Onion Export from India
(quantity in tonnes)
Export value in
crores (Rs)
2004-05 944,000  817.49
2005-06 770,000 620.27
2006-07 1,161,000 1,135.42
2007-08 1,101,000 1,285.82
2008-09 1,671,000 1,816.14

 

Onion Production: state-wise area, production and productivity of onion (2009-10)
State Area
(In thousand hectares)
Production
(In thousand tonnes )
Productivity (tonnes/ha)
Andhra Pradesh 26.00 244.00 9.38
Bihar 28.75 329.88 11.47
Gujarat 35.50 750.00 21.13
Karnataka 53.00 395.00 7.45
Madhya Pradesh 39.55 517.35 13.08
Maharashtra 111.65 2409.18 21.58
Odisha 60.45 522.47 8.64
Rajasthan 37.75 570.00 15.10
Tamil Nadu 30.50 320.50 10.51
Uttar Pradesh 69.50 778.75 11.21
Haryana 16.00 329.00 20.56
Others 45.50 563.00 12.37


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.

 

 

Subscribe to Weekly Newsletter :

Comments are moderated and will be published only after the site moderator’s approval. Please use a genuine email ID and provide your name. Selected comments may also be used in the ‘Letters’ section of the Down To Earth print edition.