New Delhi: After Bangladesh’s prime Minister Sheikh Hasina quipped on Friday that she has asked her cook to stop using onions as an ingredient, India allowed the entry of 225 trucks that had been stranded at the border following a ban on exports, reported Times of India. The trucks are carrying 6,750 tonnes of onion – only about 1% of the quantity India exported last year to Bangladesh.
Battling a middle-class uproar due to higher than normal retail prices – touching Rs 70 a kilogram – the Indian government banned the export of onions and imposed limits on quantity that can be held with traders on September 29. Bangladesh accounts for the maximum quantity in India’s onion export basket. After the ban, the retail price of onion has increased over 70% in Bangladesh.
But, the reason for making an exception for these trucks may also have something to do with the displeasure expressed by Nashik – among the top producers of the bulb in India – based farmers and traders barely a few weeks prior to the assembly elections in Maharashtra. Traders had met with minister of railways and commerce Piyush Goyal – who was also present when Hasina made the comment – and urged him to allow export.
Also read: Centre’s Measures to Control Onion Prices Will Hurt Farmers
Farmers in Nashik have also protested against the ban in exports which has led to a decline in the prices realised by them. Before the export ban, wholesale price of onions in Lasalgaon – Indian’s largest mandi for onions – was around Rs 4,100 per quintal. This has come crashing down over 35% to Rs 2,650 per quintal on October 3, a few days after the ban was imposed.
“This government did not understand the issue of rising onion prices and did not think from the perspective of the farmers. The government panicked and has taken the stock holding decision in a hurry,” former member of parliament Raju Shetti of the Swabhimani Shetkari Sangathana told Hindustan Times.
“When last year the prices were at Re 1 per kilogram, the government did not intervene. Now, when the prices have increased slightly, and it is time for us to make profits for the first time in three years, the government steps in to control the price. It is clear that the government is anti-farmers,” Ajit Tambe, an onion farmer from Nashik told The Wire.
Farmers wait for the auction of onions at Lasalgaon market in Nashik district in the western state of Maharashtra, India, December 19, 2018. Photo: Reuters
Last year the wholesale price of onions had dipped to as low as Re 1 per kilogram in mandis. In fact, in 30 months leading up to December 2018, the average price was Rs 1,000 per quintal in major onion producing states.
Wholesale prices had remained below Rs 900 per quintal for 19 of the 30 months. It costs around Rs 900 a quintal to produce onions. But the government response even when farmers were not realising their cost of production was much more muted as The Wire has pointed out earlier in these pages.
Recently, senior journalist Harish Damodaran, renowned economist Ashok Gulati and former agriculture secretary Siraj Hussain, have written that the government should not sacrifice farmer incomes to assuage middle class outrage.
Also read: Indian Onion Export Ban Likely to Disrupt the Market in Bangladesh
To put this in perspective, in 1998, a rise in onion prices to Rs 70 a kilogram had led to outrage. Twenty one years later, a rise to Rs 70 a kilogram has led to ‘fear’ among the middle classes and sections of the media forcing the government to act.
In 1998, the price of petrol was Rs 23 a litre. It has now risen over 200%. Similarly, the price of most other non-food items has risen in this period.
The propensity for middle class outrage – and the government’s overzealous interventions – over an increase in food prices is part of the reason why farm incomes have stagnated in India.