BAN ON EXPORT OF ONION
01, Oct 2019
Prelims level : Economics- Agriculture
Mains level : GS-III- Storage, transport and marketing of agricultural produce and issues and related constraints
Why in News?
- Union ministry of commerce and industry amended export policy of onion from free to prohibited, which amounts to banning of onions from export, with immediate effect.
Reasons behind the Decision:
- The prohibition by the government comes amid rising prices of onions across the country.
- The commerce and industry ministry amended the export policy of onion, making it ‘prohibited’ from ‘free’ earlier.
- The decision has:
- banned exports of all varieties of onion in a bid to tame prices.
- imposed stock limits on onion traders to facilitate release of stocks and prevent hoarding by traders.
Impact of the Decision:
- Retail traders across the country will now be able to stock only up to 100 quintals of onion while wholesale traders will be allowed to stock up to 500 quintals.
- In the past, the Centre had authorised states to impose stock limits but this time it has imposed the limits on its own.
- Sudden export bans shut off the possibility of the farmer getting a bumper price for his crop, something that he feels he is entitled to, as the obverse of the distress sale he often has to undertake.
Way Ahead:
- States must act expeditiously and launch a crackdown on hoarders to bring the stocks to the market swiftly.
- Promote modern infrastructure facilities like cold storages and warehouses to use it as buffer stock.
- Instead of banning exports, the government should encourage export of onion in its raw and processed forms.
- The government must invest in food technology that would permit farmers to increase output without fear of distress sales, onion offtake assured because of its storage in a processed state
- More policy making and political attention should be devoted to raising onion output, or for that matter farm output in general. Complacency on the farm front is wholly avoidable.