August 29: India has imposed a 40 percent tariff on onion exports from August 19 to curb possible price hike in its domestic market which is reeling under shortage of onions.

India’s decision to protect its consumers has caused a ripple effect in Nepal, sending the price of onion skyrocketing.

Nepal largely depends on India for onion as the domestic production is not sufficient to meet the market demand. The main reason for this short supply is the failure of the ‘Mission Onion’ programme launched by the government about 16 years ago.

With the aim of making the country self-sufficient in onions, the government had launched the Mission Onion programme in Jhapa, Siraha, Saptari, Dhanusha, Bara, Parsa, Rupandehi and other districts with an investment of Rs 500 million in fiscal year 2064/65.

However, the program was not successful due to irregularities in the purchase and distribution of production materials. Despite the failure, the government decided to give continuity to the plan to run potato and onion missions for the next four years (until FY 2076/77). But the plan was limited to paper works. Stakeholders say that Nepal had to suffer after the plan has failed many times.

Dr Govinda Prasad Sharma, secretary of the Ministry of Agriculture and Livestock Development, admitted that big programmes announced by the government for the production and promotion of onions were not implemented and therefore the country have had to suffer the consequences. According to him, despite the high potential of onion cultivation in Nepal, the Mission Onion failed due to some technical complications.

"The first thing is that we could not produce the seeds we needed. Secondly, we did not have cold storage for storing the onions produced by the farmers," he said told New Business Age, adding, "Onion storage technology is different compared to other vegetables and fruits. Therefore, due to the lack of technology, even a storage house could not be built. Due to this, our mission could not be implemented.”

When India increased the customs duty on onion export, not only did onions become more expensive in Nepal, traders also started black-marketing to take undue advantage.

The Kalimati Fruit and Vegetable Market Development Committee removed onion from its daily price list after traders did not sell onions in the Kalimati market for two days saying that they were out of stock and did not import from India due to high tax. At present, the price of onion in the retail market is up to Rs 130 per kg.

Sandeep Subedi, an official of the National Potato, Vegetable and Spice Crop Development Center, said that the consumers had to suffer because the government could not implement big programmes related to onion production and promotion. According to him, one of the reasons why Nepali consumers have to depend on India for onions is the government's inability to implement big programmes, and another reason is the inability of farmers to produce quality seeds.

Onion is a crop that can be produced in abundance in Nepal. Looking at the data of the last three years, the area of onion production also seems to be decreasing.

According to the data provided by the center, onion cultivation was done on 20,900 hectares of land in the year 2075/76. In the years since then, the area of onion cultivation seems to be gradually decreasing. In FY 2076/77 and FY 2077/78, onion cultivation was done on only 20,400 hectares of land, according to government data.

Director General of the Department of Agriculture, Dr Hari Bahadur KC, said that the government has not given much attention to onion production, which has great potential in Nepal.