Explained: Why Asia's largest onion market has stopped trade indefinitely

After tomatoes, onions are making Indian households cry. However, amid the price hike, the Agriculture Produce Market Committee (APMC) of Lasalgaon in Nashik, which is Asia’s largest onion market, has stopped the trading of the bulb indefinitely. The reason? To protest against the Centre’s imposition of a 40 per cent export duty on the kitchen staple. Along with the market based in Lasalgaon, other APMCs in the Nashik district have also boycotted the sale of onion. Let’s take a closer look. Also read: After tomatoes, now onions at subsidised rate: How Centre is fighting food inflation Onion trading stopped indefinitely The decision for the indefinite closure of onion auctions in Nashik was taken on 20 August in a meeting of the Nashik District Onion Traders Association, its president Khandu Deore told PTI on 21 August. “In case onions are brought to an APMC, as the decision will take time to reach farmers, then the auction of those onions will be conducted and thereafter the process will remain closed indefinitely. This was also decided in the meeting, as per the request by various organisations of farmers,” he said. At some places, onions were brought and their auction began at the APMCs, as per PTI sources. The All India Kisan Sabha (AIKS), the farmers’ body linked to the Communist Party of India, has also appealed to all APMCs across Maharashtra to halt the trading of onions. “Not only in Nashik but across Maharashtra, farmers will come out to protest against the government’s move to impose an export duty on onions,” AIKS general secretary Ajit Nawale said, according to Moneycontrol. He added, “The central government has continuously adopted anti-farmer policies. First, by facilitating the import of tomatoes and milk products, and now by placing an export duty on onions, the government has damaged the interests of farmers. To protest against this, farmers across Maharashtra will boycott the sale of opinions at the APMCs. Kisan Sabha will support their agitation." Traders claimed the central government’s decision to impose a 40 per cent duty on the export of onions till 31 December will adversely affect the onion growers and its export. Some farmers even protested in several places in Nashik district in Maharashtra on Monday against the Union government’s decision. Sanjay Pingle, onion-potato market president at the Vashi APMC in neighbouring Navi Mumbai, urged the Centre to reconsider its decision. “We are also under a lot of pressure from farmers asking us to shut down the market and stop the sale of onions. At least 10-15 associations have asked us not to sell the onions. The entire Nashik district is observing a closure (of the onion auction) today. In the coming days, local markets will also close. The APMC has also decided to support the farmers,” he told the news agency. “If we pay 40 per cent duty to the government, then the rate of the onion which we were exporting for Rs 25 (per kilo) will drop down to Rs 15. At this rate, we will be forced to purchase onion at Rs 10, which will not even cover a farmer’s production cost,” Pingle said, further claiming that some agency has given a “wrong report” to the central government (over the issue), and not taken into consideration the rise in expenditure on fertilisers, labour cost, etc on the production of onions. “Even today, there is a balance of 80 per cent onion stock in Maharashtra and 70 per cent in Madhya Pradesh,” he said, adding that due to less rainfall, there has been a good production of onions in Maharashtra and Karnataka. If 10 years back the price of onion was Rs 10 (per kilo) and now after considering the production cost it Rs 17-18, there is not much increase. It is about Rs 25-30 in the wholesale market and Rs 35-40 in retail, he said. Pingle urged the government to provide onion through the public distribution system (PDS), as is being done for rice and wheat. “If you want that the poor people get onion at a cheaper rate, then sell it through PDS at Rs 2 to Rs 10 (per kilo),” he said. He also claimed that due to the Centre’s decision, the export of onions will drop drastically and facilitate more income for farmers in Pakistan, Iran and Egypt. Pingle also urged that Union Minister Nitin Gadkari take up this issue with the Centre. He said in the coming days, they will take a decision on this issue as “we want to be with the farmers.” The Centre should call a meeting of the stakeholders and then only implement this decision, he said. Also read: After tomatoes make Indians see red, are onions set to make them cry? The Centre’s response On 19 August, the central government imposed a 40 per cent export duty on onion to restrict outward shipments and boost local availability amid apprehension about the kharif output and signs of firming retail prices. It also decided to increase the size of the buffer stock of onion to five lakh tonnes for 2023-24 from the earlier three lakh tonnes which has already been procured. Rabi onion harvested during April-June accounts for 65 per cent of India’s onion production and meets the consumer’s demand till the kharif crop is harvested in October-November.

Consumer Affairs Minister Piyush Goyal on Wednesday alleged that some “political opponents” are creating a “wrong picture” about the export duty slapped on onion, and urged farmers not to worry as the Centre has restarted procurement at Rs 2,410 per quintal for its buffer stock. The minister asserted that the decision has been taken to protect the consumers’ interest, but at the same time, the Centre has also decided to purchase additional two lakh tonnes of onion from farmers to avoid any panic selling. He also said the government will increase the size of the buffer stock and procure more from farmers if the need arises. At a media briefing, Goyal announced that additional procurement of two lakh tonnes of onion for the buffer stock will be done at Rs 2,410 per quintal, which he said is a “historical rate” and much higher than the average Rs 1,800-1,900 per quintal the farmers normally get from exports. “Some political opponents have been trying to present a wrong picture (about export curbs). I would urge all farmers in onion-producing states not to worry and indulge in any panic selling. NCCF and NAFED have been directed to procure onion from farmers,” Goyal said. Consumer Affairs Secretary Rohit Kumar Singh, while speaking to CNBC TV-18, said the government’s action should not alarm the producers as it is only aimed at managing the retail prices. “(We) promised that we will handle the tomato situation, and its retail prices are down now. (We) assure similar price containment for onions, procurement of buffer is a regular process. Nothing for farmers to worry about,” the channel quoted Singh as saying. Also read: Explained: Why onions are making the Philippines cry Price hike The maximum price for onion crossed Rs 67 per kilo, according to the Department of Consumer Affairs. The modal price across the nation remains Rs 31 per kilo, which is higher than the modal price of Rs 27.34 a month back and Rs 24 a year ago. According to NDTV, Due to the price increase, NCCF outlets started selling onions at retail for Rs 25 per kilo in Delhi on Monday. The decision was made at a time when the organisation was already selling tomatoes at a subsidised price. Moreover, the federal government has also identified Andhra Pradesh, Telangana, Himachal Pradesh and Assam for market intervention and availability is being enhanced in these states by releasing buffer stocks. With inputs from agencies