Date:12/10/2007 URL: http://www.thehindu.com/2007/10/12/stories/2007101254190500.htm

Karnataka

Farmers object to Centre’s move on control of onion prices

Staff Correspondent

Heavy production costs and low productivity have added to their woes

Asking for a fair price: Farmers packing onions in Kallalli village of Chitradurga district.

Chitradurga: The Union Government’s decision of floating stringent norms to contain the soaring prices of onions, has only rubbed salt in the wounds of onion farmers, who are already distressed with low productivity this year.

About a fortnight ago, the Union Government issued a circular suspending new licences for exporting onions. It also increased the Minimum Export Price (MEP) to $50 per tonne.

Though this decision was seen as a step to control the prices of domestic onions, which has shot up to Rs. 25-30 a kilogram, the farmers are opposing it. Small and marginal farmers are the most affected.

The farmers said that heavy production cost and lack of productivity had already lowered the prices of onions. Exporting onions was one way of making some profit, but the new conditions have quashed their hopes.

“Onion farmers of the State get a better price when they sell onions to north Indian States like Kolkata. From there, the onions are exported to South Asian Association for Regional Cooperation (SAARC) countries.

Prices

Before restriction on export, the price per quintal of onion was between Rs. 1,700 and Rs. 2,000, which has now declined to Rs. 1,200 to Rs. 1,400 in Kolkata,” said President, Karnataka Kisan Sangharh Samiti, G.S. Madhukumar.

He said that unlike Bangalore market, Kolkata market prefers second and third grade varieties, which are small. A large number of farmers of Chitradurga district grow the variety as it fetches good revenue in West Bengal.

Mr. Madhukumar said that since the farmers are incurring Rs. 800 per acre on production, the price offered in Kolkata were helping the farmers to make some profit. But after the imposition of restrictions, the profit margin has sharply declined, he said.

He strongly criticised the move of the Union Government stating that it is anti-farmer and unscientific. “The Government could have used other methods instead of restricting export.

He urged the National Agriculture Cooperative Marketing Federation of India (NAFED) to advise the Centre, to procure onions in the open market and transport it to north Indian States, where prices have shot up. “Even after bearing the transportation expenses, the Government could sell onions at Rs. 18.20 a kg,” he said.

Ill-timed

He said that following the move, the wholesale prices in the market came down, but the changes did not filter down to the retail market. “This means that middlemen are ruling the roost. What is the use of the decision,” he asked.

MLA N.Y. Gopalkrishna who has also opposed the decision, said that the decision was imposed right at the time when the farmers were harvesting the crop. “The Government should control the rising prices, but should safeguard the interest of farmers also,” he said.

Meanwhile, it is learnt that the Centre is planning to bring in a new export policy to stabilise the prices.

Speaking to The Hindu over phone from Delhi, Managing Director NAFED Alok Ranjan said that the Commerce Ministry is planning out a new policy, but no modalities were finalised yet.