For close to four decades, export of onion could take place only through the agencies designated by the government. Now anyone can export onions, as the Central government freed export of the bulb by removing this condition last week.
Onion export was canalised in 1974. National Agricultural Cooperative Marketing Federation (Nafed) was the only canalising agency till 1999. Subsequently, 12 State Trading Enterprises (STEs) along with Nafed were designated as the canalising agencies for export of onion. The exporter had to pay 1% commission to these agencies in order to get the no-objection certificate for exports.
As the country is expecting an all-time-high onion crop in 2014-15, the government about to face the electorate, removed the minimum export price (MEP) restrictions, which were imposed during winter season as retail prices touched Rs 100/kg.
Last week, the director general of foreign trade (DGFT) issued a notification to free onion exports. There was a strong demand from growers and exporter to remove canalisation as it did not serve any purpose.
"The canalising agencies did not use the money collected from the exporters to better the condition of farmers," claimed Ajit Shah, president, Onion Exporters Association.
The 13 canalising agencies include NAFED, Maharashtra State Agricultural Marketing Board (MSAMB), Spices Trading Corporation, AP State Trading Corporation. "Only five to six of the STEs were actually functioning," said Nafed Director HB Holkar.
MSAMB, which was a leading agency issuing no objection certificates to onion exporters has welcomed the decision. "Freeing up of onion exports will help boost onion exports. We never looked at the commission charged for the certificates as a source of revenue for us," said MSAMB Managing Director Milind Akre.
Exports would be crucial to avoid a crash in onion prices as the rabi harvest gathers pace from April. The current unseasonal rainfall, though has damaged the standing onion crop, will not affect the overall onion availability due to record area under the rabi crop. Despite the arrival of rain-damaged crop in the market, domestic prices have remained firm at Rs 6/kg to Rs 8/kg as the good quality bulb is getting a good price.
Source:- economictimes.indiatimes.com
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