Indian farmers erupt in anger on 40% onion export duty

Maharashtra-based farmers and exporters told The New Indian that the government’s decision was uncalled for

NEW DELHI | Updated: 22 August, 2023 12:47 pm IST
Central government has imposed 40 per cent duty on the export of onions

NEW DELHI: The Central government’s decision to slap an export duty of 40 per cent on onions has hit hard the farmers and exporters in the largest onion producing state Maharashtra, with many describing the measure as “unjust” and “totally uncalled for”.

According to the government, the export duty – which will remain effective till December 31 this year – aims to bolster domestic supply and stabilize the escalating onion prices.

As the exports came to a grinding halt, farmers, traders and agents erupted in protests against the Centre’s decision in Nashik on Monday.

In Maharashtra, farmers fear that the 40 per cent export duty will directly translate to a 40 per cent loss in their profits as exporters are unlikely to absorb this cost.

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Jaydutt Holkar, director of Lasalgaon APMC in Nashik, asserts that the current market conditions don’t warrant such a drastic step by the government.

“Current wholesale rates range between ₹15 to ₹20 per kilogram, with sufficient stock of summer onions available until December. The market won’t experience scarcity even when the red onions are harvested in September and October, as there is an ample supply of summer onions,” Holkar told The New Indian.

For Maharashtra, a drought-prone state, onions are a cash crop. It is the largest producer of the crucial vegetable in the country, followed by Karnataka, Gujarat, Rajasthan, and Uttar Pradesh.

Traders fear that this sudden export duty imposition, which is expected to translate into significantly less export, will severely impact business and India’s image as a credible supplier in its markets in Bangladesh, Sri Lanka, Thailand, and Malaysia.

Exporter M Jain feels that the abrupt move could lead to a potential 50 per cent drop in India’s onion export volume by December 31, 2023 – the period of the ban – ultimately harming the nation’s image in the international market.

Many farmers cite the government’s decision to increase the buffer stock limit from 3 lakh tonnes to 5 lakh tonnes to underline ample stock availability.

READ MORE: Govt Procures Record 2.5L Tonnes Of Onion For Buffer Stock

“The decision might be influenced by political motives and to portray artificial food inflation with respect to onions. This decision has been taken by officers sitting in their air-conditioned offices who have no idea about the ground reality,” fumes Shailendra Patil, a spokesperson for Onion Producers in Maharashtra.

He also said that the decision will hamper employment generation in rural areas.

“In 2020, I would send 80 trucks laden with onions daily to Bangladesh, which rose to 150 this year. Now it is clear that this flow will get hampered,” he lamented, urging the government to reconsider its decision.

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