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Govt defends onion export duty, will buy bulb from farmers at record price

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The government had struck a balance between consumers’ and farmers’ interests by launching one of the biggest drives to buy the vegetable from growers at a record price, Piyush Goyal, food, consumer affairs and commerce minister, said on Tuesday, defending the government’s decision to levy a 40% duty on onion export.

Goyal’s comments came after traders and farmers in Maharashtra protested restrictions on overseas sales of onions, which they said would hurt farm incomes. The export curbs came amid signs of lower supplies of the widely-consumed vegetable and a rise in prices.

Consumers are already facing one of the highest inflation rates in recent months. Retail prices accelerated to a 15-month high of 7.44% in July while vegetables rose an unprecedented 37%, according to official data.

Separately, food secretary Sanjeev Chopra said the government had no plans to curb export of parboiled rice or import wheat from Russia.

The minister assured farmers that their incomes would be protected and the government had decided to buy onions directly from growers at a “historic” price of 2410 per quintal (100 kg) to build a 500,000-tonne reserve.

“This is a historic price. There is no need for farmers to resort to any panic selling,” Goyal told reporters.

The minister said the NCCF and NAFED, two state-backed food agencies, had opened procurement centres in major onion markets, such as Lasalgoan, Pimpalgoan and Ahmednagar in Maharashtra, and Shahpur in Madhya Pradesh, where farmers can sell their produce at profitable rates.

“Our effort is to look after the interests of both farmers and consumers. Some elements are trying to present a wrong picture. The protests are political. Farmers are being instigated but they have no reason to worry.”

A NAFED official, who asked not to be named, said farmers were being sent text messages with all details about the procurement drive.

The government will boost its onion stockpiles to 500,000 tonne this year, after having achieved its initial procurement target of 300,000 metric tonnes. Goyal said this would greatly benefit farmers.

NCCF and NAFED will procure 100,000 tonnes each to achieve the additional procurement target, alongside “calibrated disposal of the procured stocks in major consumption centres”, consumer affairs secretary Rohit Kumar Singh said.

Indian consumers are particularly sensitive to onion prices relative to many other vegetables. Although production of the bulb has been adequate this year, heavy rain and flooding have damaged stored onions in Maharashtra, which is a major supplier, traders said.

Supplies also tend to dip during summer months due to an annual lean season when stocks from previous harvests bottom out. The food minister said the acreage of kharif or summer onion was adequate and the government sees no drop in production.Govt defends onion export duty, will buy bulb from farmers at record price

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