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Export ban on Onion UPSC NOTE

 How onion ban control high food inflation 

  • An onion ban can have mixed effects on controlling high food inflation

Benefits:

  • Reduces domestic onion prices: By stopping exports, onions stay in the country, increasing supply for domestic consumption

  • This can lead to a decrease in onion prices, especially if there's a temporary shortage.

Drawbacks:

  • Hurts onion farmers: A ban can prevent farmers from earning higher profits by exporting their onions. 

  • This can discourage them from planting onions in the future, potentially leading to supply issues down the line.

  • Limited impact on overall inflation: Onions are just one component of food inflation

  • A ban might bring onion prices down, but it likely won't significantly affect the overall inflation rate of other food items.

  • Disrupts international trade: Bans can create tension with trading partners who rely on those onions.

Why export ban on onion?

  • The recent export ban on onions in India (which was lifted in early December 2023) was implemented to address a few key concerns:

  • Ensuring Domestic Availability: There was an estimated 20% decline in onion production compared to the previous year. 

  • By stopping exports, the government aimed to keep enough onions in the country to meet domestic demand and prevent shortages.

  • Stabilizing Domestic Prices: A shortage of onions can lead to a sharp rise in prices, putting a strain on household budgets

  • The ban aimed to prevent this by increasing domestic supply and keeping prices stable.

  • Protecting Consumers: With lower domestic supply and potentially high international demand.

  • The government might have been concerned that exports would further drive up prices for Indian consumers.

  • It's important to note that export bans can be a complex issue with both advantages and disadvantages. 

  • While they can help achieve the goals mentioned above in the short term, they can also have negative consequences for farmers and international trade relations.


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Learnerz IAS | Concept oriented UPSC Classes in Malayalam: Export ban on Onion UPSC NOTE
Export ban on Onion UPSC NOTE
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