New Delhi: A sudden ban on the export of onions has dealt a severe blow to farmers in the fastest growing state of Maharashtra, who had stored their winter harvest in hopes of obtaining a better price. A day after the center banned exports, wholesale prices plummeted on Tuesday.
On Monday, farmers sold onions at prices between ₹3500 up to ₹4,000 per quintal but today it crashed at ₹1,500-2,000 per quintal, said Hansraj Wadghule, a farmer leader from Nashik, Maharashtra. “The next harvest will start to hit the markets in a month in which prices are likely to continue falling. We will begin our protests against the export ban starting tomorrow, ”he added.
Onion growers are now ruining the small window of opportunity they missed. During the prolonged blockade, most producers sold their harvest at a loss, for ₹7-8 per kg compared to the production cost of ₹10 per kg. Following heavy rains and high humidity, some of the stored crops and part of the kharif plantations were damaged. This led to an increase in wholesale prices and farmers hoped to recoup their losses from stored onions.
“No one came to our rescue when we were selling at a loss, now the government will not allow us to recoup some of our losses from stored onions (about 25% of the product),” said Deepak Pagar, an onion grower from Nashik. “The truth is that the government does not care about farmers, it is more concerned with keeping consumer prices low,” Pagar added.
The recent spike in retail food inflation appears to be the trigger for the government’s decision to ban exports. Consumer food price inflation averaged more than 9% in July and August. Although retail prices for onions were hovering ₹40 per kg in recent months, the ban is scheduled due to the recent increase in wholesale onion prices.
“The government can no longer impose a stock limit on traders (after the new ordinance amending the Essential Products Law), so an export ban is its only tool to keep wholesale prices under control. but at the expense of farmers, “said an official Nashik-based acquisition of a major retail chain who declined to be named.
Apart from Maharashtra, wholesale prices of onions in Indore, Madhya Pradesh, fell ₹600 per quintal a day after the ban was announced.
Estimates from the Ministry of Agriculture show that onion production increased to 25 million tonnes in 2019-20 compared to 22.5 million tonnes the previous year. Between April and June, India exported 0.68 million tonnes of onions, an increase of 23% year-on-year.
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