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The Financial Express

Rethinking protection of onion growers  

Published: March 20, 2020 22:14:41 | Updated: March 22, 2020 21:48:48


Rethinking protection of onion growers   

The sudden skyrocketing of onion price months back will remain a grim reminder of how lack of readiness can overwhelm the entire nation to the point of triggering panic. True, onion at that time was in short supply from the domestic market, which did fuel the price spiral initially, but later, it was the Indian ban on export that caused the havoc. A traditional supplier of onion, India does meet a substantial onion demand in Bangladesh, and hence any hiccup in export from India is potentially threatening to affect prices. On the other hand, over-supply, especially at time of onion harvest in Bangladesh, causes the prices to slump to levels even below the production cost.

It looks like the second scenario is now in place. A news item published in the FE says sharp decline in onion prices due to imports from India has seriously affected onion growers in the country, though the price fall has come as a respite for the consumers. In the wake of the drastic price fall, onion growers are now struggling to get back even the amount they invested in cultivation, adds the report. Given the correlation of imports from India or ban and rise and fall in local prices of onion, it is a long standing demand to plan import so that local growers are not hurt.

It has been learnt from the Department of Agricultural Extension (DAE) and the Department of Agricultural Marketing (DAM) that prices of local variety of onion declined to Tk 18-26 per kg at farmers' level in the last seven days against production cost of Tk 22-26 a kg. Retail price of the produce was Tk 38-50 a kg in Dhaka last week.  On the other hand, price in wholesale markets in the capital of imported Indian onion was Tk 21 to Tk 22 per kg. Market observers view this as an immediate fallout of India's lifting the ban on exports days back and entry of truck-loads of onion through Bhomra and Hili borders into Bangladesh. The just harvested local variety of onion is in no position to compete with the low priced imported onion glutting the market. According to the DAE, more than 1.2 million farmers have cultivated onions on a record 0.24 million hectares of land this year with the target of producing an all-time high 2.37 million tonnes -- almost 90 per cent of the country's total demand. Failing to fetch fair price is sure to cause highly worrying consequences.  

The scenario is most uncalled for and it can be avoided with little effort. It is ironical, sad too, that the government protects domestic industrial products by imposing supplementary duty on similar imported products. But agro crop like onion involving more than a million growers is not only neglected but harmed by government policy allowing import in post-harvest times. In this context, it may be relevant to mention that the Bangladesh Tariff Commission (BTC) last year sent a proposal to the commerce ministry to impose duty on onion imports between January-April period to protect local growers. Will the ministry rethink to do the needful before it is too late?

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