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25th August 2023 (9 Topics)

The Onion Diktat

Context

The recent discontent among onion growers regarding the 40% export duty imposed by the Indian government highlights the challenges faced by farmers of onions, potatoes, and tomatoes who lack Minimum Support Price (MSP) benefits, making them reliant on market forces.

Price Volatility and Government Response

  • Market Vulnerability: Farmers of onions, potatoes, and tomatoes experience price volatility due to market dynamics.
  • Lack of MSP Support: Unlike other crops, these farmers lack the safety net of MSP-based procurement by government agencies.
  • Differential Attention: The government's intervention varies based on price fluctuations, leading to criticism and farmer frustration.

Farming Practices and Consequences

  • Crop Storage Strategies: Onion farmers adopt staggered sales through storage structures to counter market fluctuations.
  • Impact of Unseasonal Rains: Unusual excess rains damaged a portion of harvested onions, affecting storage quality.
  • Price Fluctuations: The combination of damaged stored onions and distress sales due to rapid quality deterioration caused price fluctuations.

Short-Sighted Policy and Repercussions

  • Government's Reactive Approach: The government's reactive approach to rising prices after neglecting low prices is criticized.
  • Erosion of Reforms: Recent actions, such as export bans and stock limits, undermine the spirit of farm reform laws introduced earlier.
  • Global Supplier Reputation: Export restrictions jeopardize India's credibility as a dependable global supplier and present a challenge to restoring it.
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