Maharashtra for removal of MEP for onions

The government of Maharashtra appealed to the central government to remove the minimum export price (MEP) mechanism for onions.

Chief minister Prithviraj Chavan and deputy CM Ajit Pawar, during meetings in Delhi with the Prime Minister and finance minister, said the removal would lead to positive market sentiment and help growers get better prices for their produce. It would also lead to increase in onion exports.

The state is a leading onion producer, with annual output of five million tonnes.

It has also asked the central government to immediately have Nafed, the National Agricultural Cooperative Marketing Federation of India Ltd, to start market operations to arrest the decline in onion prices, getting a reasonable return for farmers.

Of the total production in the state, 60 per cent is from the rabi season. "More supply during the late kharif season this year has led to sharp decline in prices,” said the CM.

“The production cost is more than the present market rate. This is causing heavy financial loss and may lead to agitations in the onion growing areas.”

He recalled the state government letter of December 23 last year, arguing for doing away with the MEP mechanism for onion export. Twice that year, he said the central government had banned onion export, leading to a spate of protests. The ban was lifted with a higher MEP of $600 per tonne and then $475 per tonne. During last year, the MEP was changed 13 times, with the maximum at $600 per tonne and the minimum at $170 per tonne. Due to continuous interference in the export, this had declined by 500,000-600,000 tonnes, as compared to the export of 1.87 million tonnes in 2009-10.

"Due to lack of timely decision on the MEP from the director general of foreign trade, it became difficult for exporters to get confirmed orders,” the CM said.

“It has adversely affected the domestic prices as well. There is huge discontent among farmers of the State about the system of MEP and there is constant demand to discontinue the mechanism”.