Indian onion farmers are angry about the government's imposition of a 40% export tax on onions. They are concerned that this move will lead to an oversupply of onions and cause a domestic price drop.
The Indian government announced last week that it will continue to enforce this new tax until December, aiming to stabilize domestic onion supplies and curb inflation. This decision was made against the backdrop of nationwide protests over skyrocketing tomato prices, which reached 250 rupees per kilogram, ten times higher than the normal price.
The government has stated that it will also sell onion stocks in wholesale markets to lower retail prices. However, farmers and onion traders believe that this measure will affect their opportunities for good profits.
Maharashtra is India's largest onion-producing region, accounting for 30% of the total production. Farmers in this region have been staging protests and closing down wholesale markets.
Farmers like Sampat Sakore said, "Because of the tax, exporters will no longer export onions. If onions remain unsold domestically, it will lead to oversupply and eventually lower prices. Farmers are angry about this decision."
Dushyant Pawar, a farmer who grows around 20,000 kilograms of onions in the Nashik region, said he will face significant losses due to the export tax. He stated, "The cost of growing onions is around 1,500 rupees per quintal, and the cost of pesticides, fertilizers, and labor has increased. Furthermore, the government has imposed a 40% tax on exports, further depressing onion prices."
He added, "Onions should be sold at a price of 40 rupees per kilogram, but now the price is only 20–25 rupees."
Manoj Kumar, another farmer who is a trader in Asia's largest onion market, believes that the government could address the issue by limiting the quantity of exports instead of imposing a uniform tax. He thinks that the government's decision will bring uncertainty to business and impact the onion trade.
Dissatisfaction among farmers and traders continues to rise. To appease them, the Minister of Food and Consumer Affairs, Piyush Goyal, announced that the government would purchase 200,000 tons of onions from various centers in Maharashtra at a price of 2,410 rupees per quintal. He described this as a "historic" decision aimed at balancing the interests of farmers and consumers.
However, farmers like Mr. Pawar are skeptical of the government's commitment, as it is alleged that the government agencies have not purchased the stock as promised but have forced them to sell their produce on the open market at lower prices.
Farmers can only sell their products to Agricultural Produce Market Committees (APMC), approved by the government, to ensure protection against market price fluctuations and exploitation by large private traders. However, farmers state that the APMC has not followed regulations and has only purchased a small portion of the targeted quota, while selling the remaining produce to private traders at lower prices.
Faced with growing protests from farmers, the government needs to consider their interests and find ways to address the issue while balancing supply and demand to maintain stable market prices.