Onion Prices Crashing, Sharad Pawar Tells Commerce To Allow Exports Again.

New Delhi: Just under eight weeks after the government banned the exports of onions, a protest by farmers against crashing prices of the vegetable has forced Agriculture Minister Sharad Pawar to request Commerce Minister Anand Sharma to consider reversing the step.

"Agriculture Minister yesterday has written a letter to Commerce Minister pointing to the crashing wholesale prices of onion at major producing centres and requested him to consider allowing exports to help farmers," Agriculture Secretary P K Basu told The Indian Express today.

In a knee-jerk reaction to galloping onion prices, the government had banned exports on December 22 last year.

Statistics from National Horticulture Research and Development Foundation (NHRDF) -- a NAFED arm that has regulated onion exports so far -- suggest wholesale prices in the national capital have fallen from a maximum of Rs 55/kg on December 20 to Rs 13/kg now. Minimum wholesale prices slumped from Rs 15 to Rs 5 per kg on the same dates.

Retail prices in Delhi have fallen from over Rs 70 to about Rs 25-30 per kg.

The maximum wholesale price in Lasalgaon, the heart of the trade in Maharashtra's onion-producing region, fell over 85 per cent from about Rs 63/kg on December 20 to Rs 8/kg on February 9, after which the farmers went on strike. The lowest price at Lasalgaon was Rs 2/kg.

Auction at the country's biggest onion market remained suspended on Friday.

Worryingly for farmers, overall production this year is expected to surpass last year's production by about 7 lakh tonnes.

"The loss of the kharif crop (due to unseasonal rain, which led to the spike in prices) is likely to be compensated by the rabi crop. Production this year is estimated to be 132 lakh tonnes as against 125 lakh tonnes produced last year," Basu said.

India exported 1.08 lakh tonnes and 1.14 lakh tonnes in January and February 2010. NHRDF statistics show that despite this, the maximum wholesale price in Delhi was Rs 16/kg on February 11, 2010 -- only a little more than the currently prevalent Rs 13/kg, despite the ban on exports this year.

However, the government does not seem overly keen to rush to the onion farmers' rescue. At a meeting of the Empowered Group of Ministers on Food Security earlier this week, Pawar's plea reportedly failed to impress Finance Minister Pranab Mukherjee, the head of the panel.

"This is a local issue. It is the responsbility of the chief minister to handle it. National policies cannot be held hostage to local protests (by farmers)," Mukherjee is learnt to have said.

Pawar said in Kolhapur today, "It is the right of onion farmers to get remunerative prices... it is necessary to withdraw the ban on export to control falling prices." He said he had spoken to Chief Minister Prithviraj Chavan, and asked the state government to demand a withdrawal of the ban.

A Maharashtra delegation led by the state agriculture and marketing minister Radhakrishna Vikhe Patil met Commerce Minister Anand Sharma in Delhi to press the demand.

Source : news.in.msn.com