Maharashtra chief minister Devendra Fadnavis has written to Union commerce minister Nirmala Sitharaman seeking continuation of the Merchandise Exports from India Scheme (MEIS) for onion exports. The scheme is on till December 31.
The CM said a bumper crop of onion is expected in Maharashtra and prices of onion will collapse unless exports are promoted. He has demanded extension of the scheme till June 30, 2017.
Lasalgaon Agriculture Produce Market Committee (APMC) chairman Jaydutt Holkar has also sought extension of the scheme. Under MEIS, 5% of grant is given to onion exporters as a coupon, which they can use for imports or can withdraw as money. The duty benefits for export of both fresh and stored onions would be available till December 31.
Under MEIS, the government provides duty benefits at 2%, 3% and 5% depending upon the product and country. Farmers in Maharashtra and Madhya Pradesh, which are among leading onion-producing states, took to distress sale of the bulb due to higher supply and unsold stock in July and August this year and the situation had worsened to such an extent that farmers in Nashik district had claimed that they received 5 paise per kg rate for their produce.
This had led to the extension of export duty benefits to onion for promoting its outbound shipments. It may be noted that onion exports went up 33% to R 2,362 crore in the first 11 months of 2015-16 on higher realisation of sales. India exported 10,86,072 tonnes of onion for R2,010 crore in 2014-15.
According to Holkar, Maharashtra is one of the foremost states in the production of onion and with and bumper crop expected, farmers who are already in distress will be forced to sell at distress prices. Onion is grown on some 3.99 lakh hectares and the state produces around 54.36 lakh tonnes. Lasalgaon onion has also received ‘Geographical Indication’ (GI) status for its special quality.
Around 80% of the onions are export ready onions at Lasalgaon, he said. Onions from Laslagaon are exported to Bangladesh, Malaysia, Sri Lanka, UAE, Nepal, Indonesia, Qatar, Kuwait, Mauritius, Saudi Arabia, Bahrain and Pakistan. However, due to the slip-shod policies of the government, both China and Pakistan have now captured exports markets that were once dominated by India, he pointed out in a representation.
At present, the red onion that is arriving in markets is being sold at a minimum price of R400 per quintal and maximum of R840 per quintal to average at R651 per quintal. The shelf life of these onions is barely two to three months and therefore if the government does not extend the MEIA benefits, prices are likely to fall further. From January to February, onion arrivals are likely to increase even more which will lead to chaos in the market, he said.
The average wholesale onion prices at Lasalgaon have declined by 27.77% in just a week due to rise in supply as compared to demand. The average wholesale onion prices have declined from R900 per quintal on December 13 to R650 per quintal on Wednesday.