Consumers likely to face the brunt
The Union government's decision to ban onion export has not gone down well with farmers. Protests continued in Nashik district of Maharashtra, one of the largest onion growing regions in the country, while farmers blocked the National highway from Mumbai to Agra. The Agriculture Produce Market Committee (APMC) has, meanwhile suspended onion trading for an indefinite period.
The Centre, had on September 9, banned export of onions to increase its availability in the domestic market. The ban came a day after the government raised the minimum export price of the bulb from US $175 per tonne to a whopping US $475.
“The farmers are not even getting the production cost. The ban has virtually crippled the trade in Nashik district, resulting in financial losses to the tune of Rs 100 crore in the past five days,” says Vivek Athawale, onion trader from Pimpalgaon Basmat in Nashik district. The onion prices in the wholesale markets have plunged to Rs 350-600 a quintal (100 kgs) from Rs 1,200-1,400 per quintal after the ban.
Around 700,000 tonnes of onion are lying with farmers in Nashik district alone. “There is no shortage of onion this year, as claimed by the government. The total onion export till August this is year was 530,000 tonnes while during the same period last year, it was 940,000 tonnes,” Athawale adds. He notes that if the ban is not lifted immediately, around 60 per cent of the stock could be destroyed.
Changdeo Holkar, vice president National Agricultural Cooperative Marketing Federation of India Limited (NAFED) says that exports have been reduced this year because the Central government increased the minimum export price. “This has made India uncompetitive in export markets as the export price in Pakistan and China is $300. Last year the price was in the range of $300-350 per tonne,” Holkar says. He also blames the Centre for messing up the onion trade. “The committee that has imposed the ban does not understand that the stocks with the farmers will rot by October-end if they remain unsold. The very presumption that this stock will compensate the deficit in crop is completely wrong,” he adds.
Meanwhile, Maharashtra agriculture minister Radhakrishna Vikhe Patil met protesting famers at Nashik on Monday. “The state government was in the dark about the Centre’s decision to impose ban on onion exports. We will soon meet the ministers at the Centre and try to get the ban lifted,” he says. The ban may lead to onion prices soaring and consumers having to pay more for the bulb.
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