‘Killing Our Agriculture’: Analysts on Govt Banning Onion Exports

Here’s what analysts think of how the government is handling the onion crisis.

(Photo: Harsh Sahani/The Quint)

The Central government on Sunday, 29 September, banned the export of onions to increase availability and contain rising prices, mainly caused by adverse weather and flooding in key onion growing states earlier this year.

Stock limits have been imposed on onion traders to facilitate release of stocks in the market and prevention of hoarding by traders. For retail traders, the stock limit is of 100 quintals and for wholesale traders it is 500 quintals.

Meanwhile, to give relief to consumers from high prices, the central government is importing onions and offloading 50,000 tonnes of buffer stock of onion across the country.

Here’s what analysts think of how the government is handling the onion crisis:

From Plate to Plough: Wipe Away the Onion Tears

Writing in The Indian Express, Ashok Gulati and Harsh Wardhan feel that the government is approaching the problem in the wrong way.

They point out that the government only responds when the prices spike, not when the wholesale rates are abysmally low and farmers are suffering. Restricting exports and dumping low cost imports are policy measures that are anti-farmer and should be avoided at all costs, they write.

Ashok Gulati and Harsh Wardhan

Govt Must Not Sacrifice Rise in Farm Incomes at Altar of Short-Term Consumer Interest

Harish Damodaran, writing in The Indian Express, also feels that the government is pandering to the consumer with only short-term considerations in mind, while ignoring warning signs when prices are low at the producer’s end for extended periods.

He adds that cutting exports is also a bad idea as “bureaucrats and ministers have no idea what it takes to build export markets” and how easily they can be damaged.

Harish Damodaran

Ad Hocism in Import-Export Policy

Food and trade policy analyst Devinder Sharma reacted to the imposition of stock limits by wondering why the government did not show such alacrity when onion prices became so low that farmers were forced to discard their produce. The consumer bias and ad hocism in import-export policy is killing India’s agriculture, he tells Livemint.

Devinder Sharma

Onion Tears Again, to Make Farmers Cry

In his piece for Financial Express, written before the government imposed stocking limits on onion traders, Sunil Jain advises the government against exactly that. Each time such curbs are imposed, they end up hurting farmers more, he writes.

He points out that substituting a healthy export market with a high minimum support price will rob farmers of independent sources of demand and make them totally dependent on the government’s capacity to buy produce.