'Onion price rise scares this government'

'Commerce Minister Piyush Goyal once told me that if onion prices rise we will face the flak for it across India.'
'What can farmers expect from a government which talks like a trader and only believes in (electoral) profit and loss?'

"Why can't the government see Indian farmers earn more? Isn't the government behaving like a trader who fleeces farmers depending on how the situation is?", Swabhimani Shetkari Sanghatna leader Raju Shetti -- the former Lok Sabha MP from Kolhapur's Hatkanangale -- asks Prasanna D Zore/Rediff.com.

How is the 40 per cent duty on export of onions affecting framers?

The 40 per cent rise on export of onions is as good as a ban on exports. Given the rate of onions in international markets it is impossible for Indian farmers to export onions after paying 40 per cent duty.

Since the government cannot directly ban export of onions lest it faces complaints in the WTO (World Trade Organisation), the government has imposed 40 per cent export duty on onions.

By imposing 40 per cent duty on export of onions, the central government has ensured that farmers will not be able to export their produce.

This is the game the government is playing.

If there was no 40 per cent export duty on onions, then farmers could easily get Rs 40 per kilo from export of onions. Not only the exporter, but even sellers in the domestic market would have got the same rate.

Once most of the onions are exported the supply in the local market reduces and then local prices also move upwards. Both -- the exporters and local sellers -- would have benefitted if there was no export duty.

If you speak to the onion producers they will tell you that they do not have enough money to invest in their next produce even if the (market) prices of onion may seem inflated. That inflated prices are not earned by the local farmers.

The onion farmers suffered big losses to their summer crop due to pre-monsoon rains in India. For every Rs 100 invested they have suffered losses of up to Rs 45. Farmers can't cope with such losses. Most farmers will tell you that their onion produce is rotting. Whatever they could save is being sold in the markets currently.

Now, under these circumstances, if the farmers earn a little more (by way of exporting onions) then there is no reason for the government to put a spoke in the wheel.

Why can't the government see Indian farmers earn more?

What's the government's intention in imposing the 40 per cent export duty?

Onion price rise scares this government.

We are heading into elections in important states -- Madhya Pradesh, Chhattisgarh, Rajasthan, Mizoram and Telanagna -- followed by Lok Sabha elections in 2024, this government wants to artificially dampen the prices of onions so that it doesn't have to face the ire of voters just before the elections in crucial states.

But then shouldn't the government also work towards farmers getting adequate compensation for their agricultural produce?

This March, a farmer from Solapur sold 9 tonnes of onions at a cost of a mere Rs 30. Why didn't the government help this poor farmer then? One fails to understand why this government is so anti-farmer.

They think farmers are not a united vote bank unlike consumers of agricultural produce.

Piyush Goyal (India's commerce minister) once told me that the anger of onion farmers doesn't impact them (the BJP) much (during elections). He was like even if they (onion farmers) get angry we will face the music only in a couple of Lok Sabha constituencies.

But if onion prices rise, we will face the flak for it across India.

What can farmers expect from a government which talks like a trader and only believes in (electoral) profit and loss?

The government has announced that NAFED (National Agricultural Cooperative Marketing Federation of India) will be purchasing 200,000 tonnes of onions from the farmers at the rate of Rs 2,410 per quintal to offset the impact of export duty. Won't that benefit farmers?

This is so laughable and tragic at the same time.

The government can't take farmers for granted and let me assure you that no farmer will sell their produce to NAFED at this rate (Rs 2,410 per quintal is equivalent to Rs 24.10 per kilogram).

The government's grand plan envisages purchasing onions from farmers at Rs 24 or so per kilo when the market price is Rs 28 to Rs 30 per kilogram. Who will sell their onions to the government?

At what rate do you think farmers will sell their produce willingly to the government?

My only contention is that you are paying Rs 24 per kilo when the market rates have started increasing and are substantially above what the NAFED wants to procure the onions for.

If you had purchased onions from the farmers at this rate in February (2023) then the farmers would have benefitted from it. In February you (the government) bid just Rs 11 per kilogram.

Isn't the government behaving like a trader who fleeces farmers depending on how the situation is?

There is no logic in how the government procures not just onions, but any agricultural produce.

What is the government's logic in purchasing onions at Rs 11 per kilo in February and now at Rs 24 per kilo?

The government's sole objective is (electoral) profit.

Why have the farmers in Nashik withdrawn their agitation and started selling onions in the wholesale market?

It was a sane decision taken by the traders and farmers. If they had not done that, all their onion crop would have perished.

Traders also played their games in such situations. While they had stopped purchasing onions from the farmers they simultaneously sold their hoarded crop in the market quietly. Traders were selling their hoard, but they had only stopped purchasing crop from the farmers.

Piyush Goyal has said NAFED is offering 'historically high' rate for procuring onions from farmers…

Let him come to the people after a month and tell us how much onion NAFED procured. Let him disclose after a month how many farmers sold onions to NAFED at Rs 24 per kilo.

Please remember this short supply of onions -- due to rotting of their crops in the pre-monsoon rain earlier this year -- would have existed for only another month.

From the next month the new supply would have hit the market leading to fall in prices. The farmer would again face uncertainty over the rate he would get for his crop next month.

From 67 lakh tonnes produced during February the total outstanding stock now is 16 lakh to 17 lakh (1.6 million to 1.7 million) tonnes and that is what led to rise in onion prices and under this condition the government imposed 40 per cent duty on export of onions. It is tragic.