Tariff Commission proposes 30% duty on onion imports

Harun Zamaddar, a Sadarpur upzaila farmer in Faridpur, cultivated an early variety of onion on his five-bigha land. 

Last year he purchased the onion seeds at Tk3,500-Tk4,000 a maund, but this time, the price went up by Tk10,000  while the cultivation cost came about Tk40,000-Tk45,000 per bigha.

Harun said he has bumper produce, but is concerned about its fair price.

"Some days back I sold the onions at between Tk1,800 and Tk2,000 per maund which has now come down to Tk1000-Tk1100 since India declared lifting ban on onion export." 

All the onion-cultivating districts across the country throw up the same picture.

There are concerns that if onions are imported at lower prices, local farmers have to sell the bulb vegetables in the market at less than their desired price.

Onion growers across the country have started bearing the brunt of India's lifting of ban on the export of the essential cooking ingredient. 

In its report, Bangladesh Trade and Tariff Commission has proposed imposing a 30% regulatory duty on the import for the protection of local onion farmers. 

The report was recently sent to the Ministry of Commerce.

According to the commerce ministry, the report recommends maintaining a regulatory tariff on the import from February to May every year.

When India stopped onion export on 14 September, its price rose to Tk120 in the local market. 

India lifted the export ban again from 1 January when local onions started hitting the market. 

Recently, Commerce Minister Tipu Munshi told a press conference that the government started considering whether it would allow new import of onions though it allowed the import through the old LC (Letter of Credit).

In this context, the Ministry of Commerce asked the Tariff Commission to submit a review report on the overall condition of onions. At the same time, in a letter given to the NBR on 3 January, it requested to impose the duty on new onion imports.

Earlier, when India stopped exporting onions, traders started import from alternative countries to control the market. 

The government lifted 5% duty on onions to bring the prices to a tolerable level.

According to the report of the Tariff Commission, there is currently no duty on onions coming from India. In this situation, if onion is imported, the cost will be Tk15.53 a kg. 

This time the cost of onion growers in the country is Tk13.13 per kg. The desired price of onion growers is considered to be Tk20 per kg.

Due to this, local farmers will suffer for the duty-free import of onions from India. 

Therefore, for the protection of the farmers, the commission has recommended an imposition of 30% regulatory duty not only this year, but also from February through May every year.

According to sub-section (2) of section 18 of the Customs Act 1969, the government may impose a regulatory duty of up to 50% on onion import if it so desires.

According to the report, the onion season in Bangladesh is divided into two parts. 

The early variety of the cooking ingredients is produced and sold in the market from December to February while the main variety comes between March and April. 

This production meets 80% of the country's demand while the rest 8-10 lakh tonnes are imported.

Since India stopped exporting onions on 14 September last year, traders started import alternatively from various countries. 

According to Chittagong Customs sources, 1,11,758 tonnes of onions have been imported from 11 countries including China, Egypt, Pakistan and Myanmar till 31 December.

The authorities concerned say crisis has been mitigated with this onion, but now that the season is approaching and onion import should be tightened, or else the farmers will suffer.

Agricultural economist Jahangir Alam told TBS that the onion season has started and if imports are not controlled at this time, onion growers will suffer.

"The way the government has started working to achieve self-sufficiency in onion production may come to a halt," he suggested.

The Tariff Commission has made several recommendations including imposition of duty from February to May every year for the protection of local onion farmers, ensuring smooth supply and monitoring the supply chain and its price.

Asked about this, Golam Rahman, president of the Consumers Association of Bangladesh, said the government should fix the policy to protect the interests of both consumers and farmers. 

He added that in the current situation, it would be a logical decision to consider import control.

It is to be noted that Bari-1, Bari-2, Bari-3, Bari-4 and Bari-5 varieties are the common varieties of onion in the country while the local varieties are Taherpuri, Bhati of Faridpur, Jhitka and Kailashnagar. 

Among them, Bari-4 is a high-yielding variety produced in winter. Besides, Bari-5 is suitable for year-round cultivation which the government is thinking of spreading across the country.