In order to boost exports of onions from the country, the central government announced it has doubled the export incentive granted to the bulb under the Merchandise Exports from India Scheme (MEIS) from 5 per cent to10 per cent on Friday. The move comes at a time when onion prices have collapsed in all major mandis, with Maharashtra’s onion growers coming to the streets to protest against low prices.
In July, a 5 per cent export subsidy on onions was announced by the Centre. This subsidy had buoyed exports, with India sending out 21.35 lakh tonnes of onions in the last financial year — the highest in the last five years. This move comes when oninon prices at wholesale markets are touching record low. On December 26, the average traded price of the bulb at the Lasalgaon’s wholesale market in Nashik district was Rs 535 per quintal.
Located in the Niphad taluka of Nashik, Lasalagaon’s wholesale market in the largest onion market in the country. Prices, which were above the Rs 2,000 per quintal range in the beginning of the year has since dipped to Rs 600 per quintal at present barring a brief spike in October.
Jaydutt Holkar, chairman of the market, and other trade sources reason the present slide is mostly because of farmers not liquidating their stored summer or rabi crop before the arrival of the present kharif crop. Harvested in April-May, the rabi crop is amenable to storage and farmers store it in their on field moisture resistant structures called kanda chawl.
By the end of October, just when kharif season arrives farmers had around two lakh tonnes of stored onion qualilty of which had severely deteriorated. This large surplus and the early arrival of onions in neighbouring Karnataka and Madhya Pradesh had pushed down prices in the state’s markets.
Earlier this month, the Maharashtra government had announced a subisdy of Rs 200 per quintal for growers who had sold their produce between November 1 and December 15. It is estimated that around 75 lakh quintals of onion was sold during the period and the total subsidy would cost the state exchequer around Rs 150 crores. The press statement issued by the Centre also claims that onion by far claims the highest incentive for exports.
“Now, with the current increase, Onions enjoy one of the highest incentives for Agro-exports. This timely intervention would help the farmers who have recently harvested their produce and who have sowed/recently transplanted their seeds, expecting for better prices,” it read.