A Teary Tale of Onion Exports

Onions are a very important crop for both Indian farmers and consumers. Whenever there are price fluctuations in the market, the Government changes the rules on the trade of onions. In 2020 alone, the trading status of onions was changed 7 times, i.e. the government would ban the exports of onions and then relax it. This distorts the market and disincentivises investments in trade infrastructure like warehousing. Two Acts, the Essential Commodities Act (ECA) and the Foreign Trade (Development Regulation) Act (FTDR) empower the government to limit warehousing capacity and regulate the trade of commodities.

This set of case studies looks at the plight of onion farmers across three markets in the Nashik region of Maharashtra. Maharashtra is one of the most important onion-growing regions in India. Maharashtra ranks first in Onion production with a share of 28.32%.