India Scraps Minimum Export Price on Onions to Support Farmers

The government has abolished the minimum price threshold for onion exports to boost farmers' income. Previously, the minimum export price (MEP) was set at USD 550 per tonne, preventing farmers from selling onions overseas below this rate. A notification from the Directorate General of Foreign Trade (DGFT) on Friday announced the immediate removal of this MEP.

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Impact on Onion Exports

This decision is expected to promote onion exports significantly. The DGFT notification stated, "The Minimum Export Price (MEP) condition on the export of onions is removed with immediate effect and until further orders." This change comes just before assembly elections in Maharashtra, a major onion-producing state.

Current Onion Prices

Despite high retail prices, the government decided to remove the MEP. Data from the Department of Consumer Affairs shows that the all-India average price of onions on Friday was Rs 50.83 per kg. The modal price stood at Rs 50 per kg, with the maximum price reaching Rs 83 per kg and the lowest at Rs 28 per kg.

Subsidised Onion Sales

On September 5, the Centre started selling onions at a subsidised rate of Rs 35 per kg to help consumers in Delhi-NCR and Mumbai cope with rising prices. The National Cooperative Consumers Federation (NCCF) and National Agricultural Cooperative Marketing Federation of India (Nafed), which maintain a buffer stock of 4.7 lakh tonnes of onions for the government, have begun retail sales through their stores and mobile vans.

Consumer Affairs Secretary Nidhi Khare recently mentioned that onion availability and prices are expected to remain stable in the coming months. She highlighted that the kharif (summer-sown) area had increased sharply to 2.9 lakh hectares last month compared to 1.94 lakh hectares in the same period last year.

Additionally, Khare noted that around 38 lakh tonnes of onions are still stored with farmers and traders. This substantial stockpile should help maintain a steady supply and prevent significant price hikes in the near future.

The government's decision to scrap the MEP for onion exports aims to support farmers by allowing them to access international markets more freely. This move is likely to enhance their income by enabling them to sell their produce at competitive global prices.