The Hindu Business Line : Crocodile tears for onion growers?

WHAT IS HOLDING up decanalisation of onion exports? From Day One, the new government — right from the Prime Minister to the civil servant concerned — has been promising and announcing a series of concessions to farmers. The ruling coalition's Common Minimum Programme talks about supporting farmers by removing marketing barriers. In his Budget, the Finance Minister made the humble and hitherto largely neglected farmer the focus of attention. Not to be left behind, the Commerce Minister in his Exim policy highlighted the Special Focus Initiative prepared for agricultural exports in the form of Visesh Krishi Upaj Yojana to boost exports of fruits and vegetables, among others. In a recent move, the Union Cabinet approved the removal of onions from the list of restricted items under the Essential Commodities Act, 1955. What do all these add up to for the onion growers in any part of this country? Nothing much, really.

Onion is an important horticultural crop of mass consumption, the production of which has been rising year after year. The output crossed the 50 lakh tonnes in 2001-02 and there has been no looking back since then. Maharashtra, in particular, accounts for around a quarter of the country's output. In the basket of vegetables exports, onion occupies a prominent position. Shipments have fetched as much as Rs 650 crore in foreign exchange following the removal of quantitative restrictions on exports last fiscal — a significant improvement in terms of both quantity and value over the previous year. Importantly, rising exports have supported prices and saved growers from distress sales. By their very nature, onion prices are highly supply sensitive. This country has witnessed, not in the too distant past, elections lost on the issue of high onion prices. But political sensitivity need not come in the way of freeing exports, especially because of the professed stand of the Government to remove all barriers to farm produce marketing.

The rationale for canalising onion exports may have been valid some years ago, but not any more. Channelling exports through State Trading Enterprises is a completely avoidable restriction on marketing and should be done away with immediately. Apart from acting as contract registering agencies and collecting hefty fees for rendering no worthwhile service, the canalising agencies have done precious little to strengthening the onion production base or improving quality or expanding existing markets or cultivating new ones. It is the private trade that has shown exemplary marketing skills to promote onion exports. Exports should be thrown completely open forthwith, even as the huge funds accumulated by the canalising agencies such as National Agricultural Cooperative Marketing Federation should be invested in building the rural infrastructure of warehouses and approach roads to marketing yards. Onion induces tears in users, but growers do not deserve this tear-jerker forced on them by the government. Tears of joy can flow by freeing exports and encouraging growers to form consortia to undertake exports themselves.

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