The government's efforts to curb inflation in the election year are weighing heavily on farmers. Onion prices in wholesale markets in onion-producing Maharashtra have fallen by nearly a third in a month, making it difficult for farmers to bear the cost.
Opposition parties are constantly pillorying the government on the issue of onion exports. In the meantime, it is hoped that the government may consider lifting the ban on onion exports. Retail and wholesale prices of onions have fallen by an average of 30-35 per cent each during the past month.
The decline is even greater in the agricultural markets of onion growing areas. Consumers have been relieved by the onion price hike but farmers have suffered heavy losses.
In Maharashtra, Shetkari Sangathan leader Anil Ghanwat told Rural Voice that curbs and restrictions on onion exports have cost farmers around Rs 3,000 per quintal. The country's onion growers have suffered losses of thousands of crores of rupees. Generally, onion exports are suspended between October and December and exports start when the new crop arrives.
But this time, the government imposed a ban from December to March, undermining farmers' earnings for the entire season. Because Kharif onions cannot be stored for longer days, onion prices could fall further due to increased inflows. Therefore, lifting the ban on exports is essential.
Maharashtra politics has heated up over the onion issue. Ahead of the Lok Sabha elections, the government may consider opening up exports in view of farmers' anger. Because the retail price of onion has been under control for the past few days, the price of onion in the agricultural markets has fallen sharply due to increased inflows. To provide onion at affordable rates to consumers, the central government has procured 25,000 tonnes of onion so far in the 2023 Kharif season.
The government has raised the buffer stock target of onions to 700,000 tonnes. The procurement will be done through NEFED and NCCF. Against this target, about 5.3 lakh tonnes of onions have been procured so far.
Consumer Affairs Secretary Rohit Kumar Singh says average retail prices of onions have fallen from Rs 59 to Rs 39 per kg in a month as a result of export restrictions and market intervention. Average wholesale prices have also fallen about 35 per cent in the past month. The government is constantly monitoring the demand, supply and availability of onions.
In view of falling onion prices and heated politics, the government may open the way for onion exports through cooperatives. There is a demand for onions in many countries which India can meet through exports. The central government had imposed a 40 per cent export duty on onion on August 17 to curb rising prices. It had subsequently imposed a minimum export price (MEP) of $800 per metric tonne on onion exports. If this was not enough, the government had imposed a ban on onion exports on December 7, 2023.
The Centre has so far procured 25,000 tonnes of onion grown in the 2023 kharif season for maintaining a buffer stock and using it for market intervention to boost domestic availability and keep prices in check. The government has raised the buffer stock target to 7 lakh tonnes for the 2023-24 fiscal, against the actual stock of 3 lakh tonnes last year.
According to the Secretary, the government had procured 5 lakh tonnes from last year's rabi season and is purchasing 2 lakh tonnes of kharif onion as the buffer stock target has been raised.
Of the 5 lakh tonnes of rabi onion lying in the buffer stock, the government has offloaded 3.04 lakh tonnes of onion through cooperative Nafed and NCCF in the market to check prices. As a result, the all-India average retail price of onion has come down by 27.58 per cent to Rs 42 per kg from over a month ago, he added.
To arrest sharp spikes in retail prices, the government has banned onion exports till March 31.
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