November 6, 2013

West Bengal’s ban on vegetable exports is retrograde

ET Bureau Nov 4, 2013, 04.37AM IST

KOLKATA: Mamata Banerjee has imposed a ban on export of vegetables from Bengal, creating shortages, particularly of potatoes, in the north-east and in some neighbouring states.

This not only works to the disadvantage of farmers in her own state but also against the idea of India as one coherent economic and political entity. If Punjab were to clamp down on export of wheat and rice from the state, Maharashtra of onions and Gujarat of petrochemicals, the result would be loss and chaos. Such bans are irrational and anti-national. Banerjee should lift the ban.

This does not mean that state governments should play passive observers as artificial shortage crimps their citizens' consumption of vegetables. On the contrary. State governments can and must launch a concerted intelligence drive to locate missing onions and potatoes, crack down hard on hoarders and bring the hoarded stocks to the market swiftly. There have been minor rain-induced problems in production and transport but initial estimates are that the onion crop in the current marketing year would be as much as 15% higher than the output of 16.3 million tonnes registered in 2012-13.

The structure of the onion market is extremely skewed and amenable to abuse by a few large traders, found a study commissioned by the Competition Commission of India, published in October 2012.

Some speculate the current shortage is the result of political manipulation, in which onions have been bought up, secreted away in empty flats, to feed anti-incumbency passions in a key consuming state like Delhi. Since farmers receive as little as Rs 5 a kg, the outlay on sequestering a million tonnes for a month is the cost of financing Rs 500 crore, if the principal onion traders cooperate. The governments of Maharashtra and Karnataka should actively get to the bottom of the onion shortage.

The Centre should issue strict warnings against the tendency to play the populist card displayed by the Bengal CM. At the same time, it has to initiate action to clean up the structure of agri-marketing, which today serves middlemen at the expense of farmers and consumers.

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