Raising a stink

However, while NAFED has been the sole canalising agency for onion export, it has rarely ever been into imports. Its other functions include market intervention to stabilise the procurement price of a number of agriculturalproducts, including onions and oilseeds. “If ever NAFED has imported some commodity,” says NAFED General Manager Akash Laxman, “it has been only on specific instructions of the Government and after procuring counter-guarantees from the concerned department, usually Consumer Affairs.”

Probably this is the reason why NAFED has never suffered losses. It earns good revenue through exports and even gets 5 per cent service tax on commissioned imports. The federation buys farmers’ produce when there is a glut to ensure them a good price and then either exports the commodity or sells it in the domestic market after the glut. With an annual turnover of 600 to 700 crore, the federation has been raking in an annual profit of Rs 25-40 crore.

NAFED officials claim they were asked by the Government to import 10,000 MT onions in September but that due to the delay in getting a counter-guarantee and also an import licence from the Directorate General of Foreign Trade (DGFT) in the Commerce Ministry, imports could bestarted only in October. It claims it has already supplied 8,000 MT onions to the Delhi Government and has another 1,000 MT in its godowns. These remaining onions too would be supplied in the next one week, a senior NAFED officer said.

NAFED Chairman Ajeet Singh is peeved at the allegations made against the federation. And so is the entire staff. “We are being accused without being at fault. This when we have already fulfilled 90 per cent of our commitment. But just look at the performance of other departments. The Delhi Government too had been given a licence to import 3,000 MT onions. They too had sent their officers abroad to scout for onion imports. Can they tell how much onion did they import? Whatever they are supplying to consumers has been imported by NAFED,” claims a senior officer not wishing to be named.

Singh is more forthcoming on the allegations against him. “Yes, I fully agree with Mr Hegde. But only to the extent that 180 MT onion imported by private parties did rot on the Mumbai port.It did not rot because of us. Because NAFED had absolutely nothing to do with private importers,” Singh told The Indian Express. He also demands why nobody is referring to the fact that while the shortfall in onion production was only 10-15 per cent, the price rise was 1,500 per cent. And it was not due to NAFED, he says.

There is another angle to the row. Because of NAFED’s good revenue, its chairmanship is much sought after. The BJP, which is in power at the Centre as well as in several states, had wanted the post for its nominee, Dileep Singh Bhuria. The 529-member electorate comprises state-level marketing federations (27), tribal and commodity federations (20), primary marketing societies (479 members), besides one member each of the National Cooperative Development Corporation, National Cooperative Marketing Federation and Government of India.

But since it didn’t have the numbers, the Government sensed Bhuria would be defeated, and the election was postponed for three months. But in May this year,Singh still managed to trounce Bhuria. Since then, Singh, the son of former Bihar Congress MP Tapeshwar Singh, has not only consolidated his position in NAFED but reportedly also in some quarters of the Government. Since the onion crisis, Singh also seems to be enjoying his share of the limelight.

Refuting the charges against NAFED, he points out that if anyone is to blame for the onion crisis, it is the Commerce Ministry headed by Hegde as the DGFT had taken almost three weeks to hand over an import licence to NAFED. Singh also adds that when the federation scouted the international market for onions on the advice of the Prime Minister’s Office (in September), onion was available at $230 per MT. By the time the DGFT clearance came, the prices had reportedly soared to $265. The last batch of onions imported by the NAFED cost $330 per MT. Singh claims the prices went up abroad after the Indian onion shortage became known.

Singh also asks what NAFED would have gained by deliberately delaying the import.“NAFED was, in fact, earning a service tax of 5 per cent on the imports,” he points out.

But NAFED is not only accused of delaying imports but also of continuing exports till late September, creating “artificial scarcity” in the domestic market. Singh denies this charge too.

“We exported only 2 lakh MT onions from April to September this year while the corresponding figure for last year was 3.5 lakh MT. So where is excessive export? We have to at least fulfil our export commitments to keep our credibility intact,” he says.

NAFED officials cite in this regard the Maharashtra Assembly uproar on June 15 this year highlighting the plight of Nasik farmers who grow a particular variety of onion which is not consumed in India and is only for export. They were demanding NAFED intervention for their produce was rotting.

Regarding Thakre and Barnala’s allegations, Singh says: “No doubt I belong to the Congress. But why do they forget that God does not belong to any political party. It was not my fault ifit rained at the time of onion harvest.”

But if NAFED, as it claims, is supplying 450 MT onions per day to Delhi, against an estimated daily requirement of only 400 MT, and the onions are also coming in from other quarters, why are the prices not stabilising? NAFED officials blame it on hoarding. They feel many traders from other fields had started importing onions to make a fast buck, but once they realised the vegetable could not be kept for long as it was perishable, private parties pulled out of importing more. Many poor families are also suspected to have grabbed most of the onions being sold at Rs 10 per kg and later sold it for Rs 40-50 a kg.

Chronology

A meeting of secretaries at Prime Minister’s Office authorises Consumer Affairs Ministry to import 10,000 metric tonnes (MT) of onion.

NAFED floats global tenders to import onion.

NAFED Chairman submits comparative list of tenders to Consumer AffairsDepartment.

Consumer Affairs Department advises NAFED not to go for imports till the Government gives a go-ahead. NAFED would import anything at its own risk.

NAFED decides to import 1,000 MT onions on its own on a commercial basis.

NAFED submits application to DGFT in Commerce Ministry to get an import licence.

Ministry of Commerce grants licence to NAFED to import 10,000 MT onions.

Ministry of Finance issues orders for exemption of import duty on onions to NAFED.

Government puts onions on Open General Licence (OGL) for imports.