Election results in the onion belt increases hopes of industry and farmers for more farm friendly policies

Farmers and the industry expect the new government to increase import duty on cooking oils to support soyabean prices, remove export duty on onions, and take cautious stand on the demand for import of maize and wheat. Inspired by the onion farmers, others have started demanding policy measures to support soyabean and milk prices.“Soyabean prices have been low as the crushing of our own crop was less due to higher imports of cooking oils. Low import duties and low prices in the international markets led to a substantial increase in the import of cooking oils,” said BV Mehta, executive director, the Solvent Extractors’ Association (SEA).

The SEA thinks that increasing import duties on cooking oils may give a signal to farmers to increase the area under soybean in the kharif season sowing.

To control food inflation, the central government had lowered import duties on some commodities like the cooking oils and pulses. It has also banned or restricted export of sugar, onions, rice and wheat. The onion farmers from Maharashtra have claimed that the NDA, which was in power before elections, has suffered losses in Maharashtra’s onion belt as onion farmers were upset with the government’s policies that led to a crash in onion prices.

The election results in the onion belt have boosted confidence of the industry and farmers to raise various demands from the central as well as the state governments.

Taking inspiration from onion farmers, farmers growing soyabean and those producing milk have again raised their demands for price support measures as Maharashtra. “Cotton and soyabean farmers have been hit by a double whammy of subdued prices and low production due to drought. The state government should give compensation to soyabean and cotton farmers from the allocation it has already made in the state budget,” said Pramod Pansare, district head of the Maharashtra Onion Growers’ Association.Just before the model code of conduct came into effect, the Maharashtra government allocated Rs 4000 crore for compensating soyabean and cotton farmers in a Bhavantar like scheme.

Maharashtra is the second largest producer of soyabean and cotton in the country following Madhya Pradesh and Gujarat respectively. The state faces assembly elections in three months.

The Maharashtra Rajya Doodh Utpadak Sangh, which represents the private and co-operative dairies in the state, has asked the state government to give a subsidy of Rs 5/litre to milk farmers. Sources from the dairy industry told ET they are confident that the government will be inclined to give this subsidy after what happened in the onion belt.

Although the dairies claim to pay Rs 27/litre for cow’s milk, many farmers are being paid much less as the industry has excess stocks. “Farmers are not able to recover their cost of production due to high feed cost and water and fodder shortages,” said an industry veteran, who requested not to be identified.

Before the elections, the government was also considering importing wheat and maize. The import of pulses is also free. However, the industry thinks that there is not much scope to curb the import of pulses as India faces a severe shortage.