Centre empowers States to impose stockholding limits on onion, potato

After raising minimum export price for onions, the Central Government has empowered the State Governments to impose stock holding limit for onion and potatoes.

A decision to this effect was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA) here on Wednesday evening.

States can now take the action of imposing stock holding limit for a period of one year from the date of notification.

The notification bringing onions and potatoes under stock holding limits will be issued by Thursday, Union Law and Telecom Minister Ravi Shankar Prasad told reporters post the CCEA meeting.

This is the first time when vegetables have been brought under stock holding limit.

These measures are being considered in order to curb the hoarders who are allegedly blocking supply in anticipation of poor rain fall affecting new crop.

Such a limit would ensure that traders cannot stock more than a prescribed quantum. If, it is found that traders are holding more than that, then he can be fined and in some cases prosecuted. Currently, stock limit provisions exist for various food grains and cereals under Essential Commodities Act, 1955.

On Wednesday itself, the Commerce Ministry announced hiking minimum export prices (MEP) for onion to $500 per ton from $ 300. Higher MEP means export will be costlier and no longer profitable for the traders. The Government has already imposed MEP of $ 450 for potato on June 26.

Apart from these measures, the Government has already advised States to delist fruits and vegetables from Agriculture Produce Marketing Committee (APMC) Act, so that farmers can have the option of selling their produce in the open market themselves apart from using the traditional mandi set up.

Retail prices of onion have risen to about Rs 25-30 per kg, while the wholesale prices are ruling at Rs 18.50 per kg in the national capital. Onion prices have been rising due to speculation amid anticipation of below normal monsoon despite sufficient supply in the country.

The wholesale price of onion at Lasalgoan in Maharashtra, Asia’s largest onion market, has risen by about 80 per cent during June to Rs 18.50 per kg.

Onion production is estimated to have risen to 192 lakh tonnes during 2013-14 crop year (July-June), from 168 lakh tonne in 2012-13.

Exports meanwhile fell to 13.58 lakh tonnes last fiscal from 18.22 lakh tonnes in 2012-13. The domestic demand during the lean period from June to November is met through stored rabi (winter) and fresh kharif (summer) produce.

COMMENT NOW