Concerned over the fall in onion prices, the Government on Friday doubled the export incentive for the kitchen staple to boost shipments and ensure better returns for farmers. At present, onion traders get 5 per cent export incentive on fresh crop under the Merchandise Exports from India Scheme (MEIS). Commerce Minister Suresh Prabhu has sought Rs 179.16 crore from the Finance Ministry to double the incentives for onion exporters amid significant fall in prices of the vegetable.
Meanwhile, seeking to provide relief to coconut growers, the Cabinet Committee on Economic Affairs (CCEA) on Friday announced a steep hike in minimum support price of copra by up to Rs 2,170 per quintal to Rs 9,521-9,920 for 2018-19 season. The MSP (minimum support price) of ball copra has been increased by Rs 2,170 per quintal to Rs 9,920 per quintal for the 2018-19 season from Rs 7,750 per quintal in the last year, an official statement said. The support price of milling copra has been raised by Rs 2,010 per quintal to Rs 9,521 per quintal for the current year from Rs 7,511 per quintal in the last year.
In a communication to Finance Minister Arun Jaitley, Prabhu said the Ministry of Commerce is keen to increase export incentives under MEIS from 5 per cent to 10 per cent. Under Merchandise Exports from India Scheme (MEIS), the government provides duty benefits depending on product and country.
“The Government today increased the export incentives under the MEIS from existing 5 per cent to 10 per cent in the interest of farmers,” an official statement said.
This will result in better price for onion in domestic markets. Wholesale prices of onion are ‘subdued’ at present due to increase in the arrival of the fresh crop in the mandis, it said.
“To contain the situation, it has been decided by the government to encourage export of onions so that the domestic prices stabilise,” the statement said. With the current increase, onion enjoys one of the highest incentives for agro-exports. This timely intervention would help the farmers who have recently harvested their produce and who have sowed or recently planted their seeds and expected better prices, it added.
In July 2018, the Government had introduced 5 per cent export incentive for fresh onions.
India’s exports of fresh and chilled onion stood at $256 million during April-October 2018-19.
It was $511.5 million in 2017-18. Good monsoon in states like Karnataka, Gujarat and Madhya Pradesh has led to huge production of onion, resulting in less demand from south and north region.
Due to this, onion from Maharashtra has not been transported to other states, which caused a glut and sharp decline in prices.