Farmers demand subsidies and reduced export duty to compensate for their losses
By Sweta Roy | January 10, 2024
Atmaram Sonawane, a farmer in Asia’s largest onion market, Lasalgaon, Maharashtra, lost more than half of his onion harvest this season due to poor storage facilities and uneven rainfall. The crops could have fed 9000 people and supported his children’s education. Before Sonawane could come to terms with the loss, the government imposed an export duty on onions, eroding his last shred of hope for sustaining his business.
Farmers and traders in Lasalgaon share Sonawane’s plight as the government’s new export restrictions are aggravating their losses. Lasalgaon produces over 30% of India’s onions.
India loses an average of 25-30% of its onion produce annually post-harvest, particularly during storage, according to a report by the Agricultural and Processed Food Products Export Development Authority (APEDA). About three million tonnes of onions go to waste each year, the report said.
Last month, the government announced a minimum export price (MEP) of Rs.67 per kg to control prices in the domestic market. This has led to a loss of Rs.18 per kg for traders. “We used to sell 100 trucks of onions per month, but now we are struggling to sell even 30 trucks,” said Sandeep Kadam, an onion exporter at ADP Traders. “If the situation continues as it is, we will be forced to stop our operations altogether.”
Onion prices in Maharashtra have surged this year after poor rainfall impacted agriculture. Prices crossed Rs.80 per kg in the state, pulling up food inflation.
After introducing MEP, the government started selling onions from its reserves at Rs.25 per kg, but traders kept selling at Rs.45 per kg, making it hard for them to compete in the domestic market as well.
“We used to export up to 30 containers of onions per month, but now we only export 3,” said Netra Karadak, an exporter at Ajiyanka Traders who used to export to Dubai, Sri Lanka, Malaysia, and Bangladesh. “We lose around 15 lakh for each unsold container,” she said.
The farmers are demanding the government reduce the export duty and provide subsidies to compensate for their losses. They expect onion prices to keep rising in the coming months, making it difficult for consumers to afford onions.