Union Commerce Minister Announces Historic Onion Procurement Price Amidst Export Duty Backlash
August 22, 2023
Introduction
As protests escalate over the recent imposition of a 40 percent export duty on onions. The Indian government has taken steps to alleviate concerns among farmers and traders. The decision to impose the export duty, is aimed at stabilizing domestic onion prices. This led to the closure of the largest wholesale onion market in India, Lasalgaon, for the second consecutive day. The move triggered protests and uncertainty among onion farmers across the country.
Union Commerce Minister Piyush Goyal, in an attempt to address the situation. He declared the commencement of onion procurement at an unprecedented price of ₹2,410 per quintal. This initiative is seen as a response to the farmers’ anxieties regarding plummeting onion prices in the domestic market due to the export duty. Goyal criticized political opponents for misconstruing the situation and urged farmers not to engage in panic selling.
“I would urge all farmers in onion-producing states not to indulge in any panic selling,” Goyal asserted. He directed the National Cooperative Consumers’ Federation (NCCF) and the National Agricultural Cooperative Marketing Federation of India (NAFED) to undertake the procurement process.
This move got reportedly prompted by discussions between Maharashtra’s Deputy Chief Ministers Ajit Pawar and Devendra Fadnavis and Union Commerce Minister Goyal.
Dhananjay Munde, the Agriculture Minister of Maharashtra, revealed that the decision was taken to address farmers’ concerns about the export duty’s impact on domestic prices.
Bad weather acts as Root cause
The agitation among farmers stemmed from concerns about adverse weather conditions affecting almost half of their onion crops. They expressed dissatisfaction with the government’s lack of assistance during times of catastrophic losses. “We didn’t get any assistance from the government last time. Around ₹20 have been spent per kilo by farmers… they demand ₹40 per kg rate. Not every farmer is able to sell the produce via NAFED,” lamented a farmer.
The 40 percent export duty on onions, effective until December 31. This is intended to curb outward shipments and boost local onion availability. The government has also decided to increase buffer stocks from three lakh tonnes to five lakh tonnes for the 2023-24 season.
In response to the ongoing turmoil, the National Cooperative Consumers’ Federation (NCCF) began retailing onions at subsidised rates of ₹25 per kg in the national capital. This follows a similar initiative with tomatoes. Additionally, the government has identified Andhra Pradesh, Telangana, Himachal Pradesh, and Assam for market intervention, enhancing onion availability through buffer stock release.
Conclusion
The situation remains tense as farmers, traders, and the government navigate the complex interplay of market dynamics and agricultural policies. The coming days will likely reveal the efficacy of these measures in calming the unrest and ensuring stability in the onion market.
