After seeking import, Union govt slaps steep export charge on onions

Parthasarathi Biswas
This is the first time that a Minimum Export Price has been imposed on onions this year. (File Photo)

THE UNION government on Friday slapped a steep Minimum Export Price (MEP) of $850 per tonne on onions, virtually putting brakes on the export of the produce. This is the first time that a MEP has been imposed on onions this year.

Simply put, henceforth exports will not be allowed if the consignments are priced below $ 850 per tonne. The steep MEP will, in a way, stop all outbound shipment of onions from India. During the financial year 2018-19, India had exported 21.82 lakh tonnes of the bulb.

This move comes days after the state-owned MMTC Ltd had floated a tender for import of onions from Pakistan, Egypt, China, Afghanistan or any other origin , triggering criticism from farmers in Maharashtra. The tender, dated September 6, has sought delivery of the imported shipments by November-end.

The MMTC, however, on Friday issued a corrigendum to its tender, excluding Pakistan as the country of origin, thereby making bids from the neighbouring country ineligible. The inclusion of Pakistan in the tender list had evoked extreme criticism from various quarters. Friday s corrigendum issued stated that the country of origin to be read as any country of origin, excluding Pakistan .

The Directorate of Foreign Trade (DoFT) raised the MEP through a notification on Friday. On December 29, 2017, the Centre had imposed a MEP of $ 850 per tonne. It was brought down to $ 700 per tonne on January 19, 2018. On February 19 of the same year, MEP was removed altogether.

This would be the third intervention by the government to control onion prices. In June, the Centre had done away with the 10 per cent export subsidy declared on the bulb.

While Pasha Patel, the chairman of Maharashtra s commission of agricultural pricing, said that the MEP will prevent artificial hoarding, farmers bodies called the move anti-farmer .

Prices in mandis of Maharashtra the largest onion growing state accounting for over 33 per cent of national produce has been on the rise since April. The average traded price of onion at the Lasalgaon wholesale market in Nashik s Niphad taluka on Friday was Rs 2,950 per quintal, which was the highest such price for the year.

Traders and sources in the market said that both the decision to import and the imposition of the MEP are steps taken by the Centre to prevent further rise in prices.

In Maharashtra which produces roughly a third of India s onions, much of it in Nashik, Pune, Ahmednagar and parts of Marathwada farmers sow three crops of the bulb: kharif (sown in June-July and harvested in October-November), late-kharif (sown in August-September and harvested in January-March) and rabi (sown in November-December and harvested after March).

Of these, the rabi onion can be stored due to its lower moisture content. Farmers usually stock these onions in kanda chawls (on-field raised structures designed to prevent moisture ingress) and gradually offload them during the summer and monsoon months.

The current price rise is mainly due to a dip in 2018-19 rabi acreage to 2.66 lakh hectares (lh) when compared to the previous year s 3.54 lh. Also, kharif sowing in the state has reported a dip.

Maintaining that the measures were meant to stop artificial hoarding in the markets, Patel said; There is a dip in onion cultivation area, which will play out in the prices. All these measures are to ensure that middlemen do not take undue advantage of the situation.

However, Anil Ghanwat, the president of the farmer s union Shetkari Sanghtana, urged farmers not to vote for the ruling BJP-Shiv Sena alliance. The anti-farmer face of the government is being revealed. By trying to control wholesale prices, the government is trying to ensure cheap onions for urban voters at the cost of farmers, he said.