Onion Export Duty Only To Benefit Major Exporters

Estimated read time 3 min read

On the fourth of May, 2024, the Union authorities abrogated the prohibition on onion exports, a measure preceding the electoral polls in crucial constituencies of Maharashtra, set for the third segment of the 2024 Lok Sabha elections on May 7.

The governmental decree is anticipated to precipitate an ascent in onion prices in the ensuing weeks. As of May 4, the quotation at the Lasalgaon Agricultural Produce Marketing Committee — the largest of its kind in Asia — was pegged at 2,100 rupees per quintal, with a zenith of 2,500 rupees. The onions of Maharashtra find their way to markets in no fewer than 20 nations.

Nevertheless, cultivators within Maharashtra’s famed onion districts like Nashik, Lasalgaon, Solapur, among others, conveyed scant enthusiasm regarding this edict to Down To Earth (DTE). They articulated that the measure offers minimal solace.

A particular grievance was directed towards the stipulation mandating an Export Minimum Price (MEP) of 550 U.S. dollars per metric ton, which, according to the cultivators, effectively constitutes an export levy of 40 percent, thereby diminishing their margins. They further prognosticated a surge in onion prices in the near future due to policy missteps perceived as adverse to agrarian interests.

During the prior two phases of the general election, conducted on April 19 and 26, thirteen constituencies within the state cast their votes. The forthcoming polling on May 7 will see pivotal districts in the sugarcane belt of Western Maharashtra as well as the onion cultivating regions participate.

Regions such as Baramati, Raigad, Dharashiv (previously Osmanabad), Latur, Solapur, Madha, Sangli, Satara, Ratnagiri-Sindhudurg, Kolhapur, and Hatkanangle will engage in this electoral exercise.

Discontent with the export restrictions, onion farmers in Maharashtra have already barred political figures from the Bharatiya Janata Party and the Shiv Sena (Shinde faction) from campaigning within their territories.

Kuber Jadhav, a prominent agrarian leader and convener of the Swabhimani Shetkari Sanghatna, criticized the central government’s policy as superficially conciliatory, intended merely to forestall electoral defeat in the onion-rich belts of Maharashtra.

Describing the policy as ill-advised and offering illusory promises, Jadhav highlighted that an onion exporter, complying with the set export duty of $550 per quintal, would incur governmental fees of approximately 40 to 45 rupees per kilo sold, significantly eroding profitability.

Bharat Dighole, the state president of the Onion Growers’ Association, advocated for an exemption for farmers from the export tariff, enabling them to garner full advantages from the policy. He reiterated the agricultural community’s long-standing appeal for a revocation of the export duty since August 2023, emphasizing the ensuing financial strain.

Dighole remarked that the recent policies had coerced the agrarian community into a cumulative fiscal deficit nearing 10,000 crore rupees over the preceding nine months, posing the rhetorical query of whether the administration would offer compensatory relief.

He further lamented the meteorological adversities of scant rainfall and drought-like conditions that had detrimentally impacted the sowing of summer onions by 30 percent, portending potential price escalations post-elections due to reduced yield and harsh climatic conditions affecting the current harvest.

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