On September 14 the Central government issued a notification prohibiting the export of onions. The ban has apparently caused huge losses to farmers and there is anger amongst them. Balasaheb Thorat, Congress Minister for Revenue in the Maha Vikas Aghadi government in Maharashtra says, “Even as farmers in the State had just started to recover from the COVID-19 induced losses, the Modi government has once again dashed their hopes. At a time when the onion crop was fetching good prices in the market, the Modi government suddenly decided to ban exports, causing huge losses to farmers. There is strong anger among farmers against this decision of the Modi government and the State government stands firmly with the farmers.”
Onions have been trading at a high price that has been very beneficial to farmers. The wholesale price, especially in urban markets, has been increasing steadily. The average price of onion in Lasalgaon (Asia’s largest onion trading market in Nashik district in Maharashtra) increased by almost 100 per cent between March and September of this year. In March the price was around Rs.1,500 a quintal and this rose steadily to Rs.3,000 a quintal in early September. Correspondingly, it rose for the retail buyer from Rs.25-30 about three months ago to Rs.35-45 currently.
Farmers brought out their stored onions to take advantage of the price boom. The Centre claims that the export ban was a means of controlling the rising Consumer Food Price Index which showed that the retail price of onion was high. Farmers say the ban has hit them hard because this is an opportunity for them to cash in on the high prices. They say that they do not get advantages like this often and that the government does little to help the farming sector. Thus, the ban is being seen as anti-farmer.
The unseasonal rain also contributed to the situation. Prices went high in the wholesale markets because the last ready-to-harvest crop at the end of August was washed out. Farmers in Karnataka were especially badly hit by flooding in fields. Stored onions in parts of Maharashtra, Gujarat and Madhya Pradesh were also affected by the unseasonal weather. The onion is sensitive to high humidity and catches a black fungus that rapidly rots the stored crop. With demand greater than supply, farmers were benefitting.
The export market was also beckoning the farmers because the Indian onion is a favourite in neighbouring countries. The bulb is regularly exported to Bangladesh, Sri Lanka and the Gulf countries. The demand from Sri Lanka increased because the onion crop there was also affected by unseasonal heavy rain.
After the announcement of the ban, says Balasaheb Thorat, the situation changed. “When the markets opened for trading on September 15 the prices had crashed. What had been trading at Rs.3,000 a quintal was now selling at Rs.700-800 a quintal,” he explains.
The next onion harvest will be around December. From September until then is a period of festivals and onion prices are expected to rise steadily. So, the Centre’s ban on exports has not exactly helped the farmer or the consumer.
Farmers organisations such as the Akhil Bharatiya Kisan Sabha have said the ban is an example of the double standards of the Centre. In May the Centre brought an ordinance amending the Essential Commodities Act,1955, saying stock limits and movement restrictions on food grains, edible oilseeds, potatoes, onions and other essential commodities would be imposed under very exceptional circumstances like natural calamities. The ordinance is due to become a law soon.
Dr Ajit Navle, general secretary of the Kisan Sabha, said, “The ban has been a huge betrayal by the Centre. They had removed onions from the Essential Commodities Act saying this would benefit onion farmers greatly. But now they’ve taken a U-turn and betrayed farmers. The Bihar election has taken precedence for the Centre at the cost of farmers. Onion farmers are planning a nationwide protest.”
Farmers’ organisations say the export ban and the ordinance, which will soon become a law, are at odds with each other and expose the hypocrisy of the Bharatiya Janata Party-led government.
On September 16 the Congress staged a protest in Nashik district against the anti-farmer policies of the Central government. Onions were symbolically scattered on the streets and portraits of Prime Minister Narendra Modi were hung with garlands of onions.