The Director General of Foreign Trade (DGFT) increased the Merchandise Export from India Scheme (MEIS) benefits for dehydrated onions from 3% to 5%, taking all stake holders by surprise, since the trade and farmer representatives have been trying to incentives for export of fresh onions
Pasha Patel, chairman of Maharashtra State Commission of Agricultural Costs and Prices said, We have been demanding MEIS benefits at 7% for fresh onion from past several weeks. However, there seems to have been some confusion while issuing the May 24 notification pertaining to de-hydrated onions, which account for a small percentage of the fresh onion.”
From the seven months between August 2017 to February 2018, onions had given good returns to farmers as average prices rules between Rs 20/kg to Rs 30/kg, hitting a high of Rs 36/kg. However, prices are now ruling below Rs 10/kg since March as rabi crop was being harvested. Onion prices normally remain subdued between March to May every year.
With forecast of a normal monsoon, which is expected to arrive on time, farmers are likely to increase area under kharif onion, which had given good returns in the previous year. With large storage of rabi crop, any increase in kharif production of onions can lead to a glut in the market.
Onion exporters too have been demanding export incentives as the government has stopped MEIS benefits for fresh onion from October 1. Ajit Shah, president, Onion Exporters Association said that they have requested the government to re-instate it.