In June, the Centre promulgated three ordinances which aim to free farmers from a maze of controls which limit the price they receive for their produce. Many stakeholders in the agricultural system welcomed it and a few compared its significance to what the 1991 liberalisation did for industry and services.
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This week however the government reflexively resorted to its default tactic of arbitrary controls. It issued orders banning export of onions in the wake of an increase in its wholesale price in Lasalgaon, Maharashtra. It undermines onion farmers. Exports orders already received have to be cancelled and return on investment has been capped. For the farmer, it’s nothing more than another exhibition of license-permit raj.
Also read: Government bans onion exports as prices treble in a month
If the June reforms are to fulfil their potential, the Centre must allow the market to function without arbitrary bans. The price mechanism is the signal through which the stakeholders calibrate production and demand. It’s an essential element of a market. The export ban must be lifted.
