Farmers : The government's decision to increase customs duty on crude palm and refined sunflower oil to 20 percent and 32.5 percent respectively will benefit farmers "significantly" as it will increase their income. A senior official expressed this hope on Saturday. He said that the decision to remove the minimum export price and cut export duty on the onion will also help the farmers of the country.

Customs duty increased from zero to 20 percent.

According to a Finance Ministry notification, the basic customs duty on crude palm, soybean, and sunflower seed oil has been increased from zero to 20 percent. The basic customs duty on refined palm, soybean, and sunflower oil has been increased from 12.5 percent to 32.5 percent.

The effective duty on these crude and refined oils will increase from 5.5 percent to 27.5 percent and from 13.75 percent to 35.75 percent respectively. "This is a huge help for soybean and oilseed farmers. Farmers of Maharashtra and Madhya Pradesh will benefit a lot from this as these oilseeds are produced in large quantities here," the official said.

Control over falling domestic prices of edible oil

The official said these measures have been possible due to the effective management of the government to control the domestic prices of edible oil which have been falling continuously for the last two years. The official said, "These are very sensible steps taken by the government to support soya farmers without affecting the market sentiment."

Apart from Madhya Pradesh and Maharashtra, other major oilseed-producing states are Gujarat, Rajasthan, Karnataka, Andhra Pradesh, Uttar Pradesh, Telangana, and Tamil Nadu. The government had earlier fixed $550 per tonne as the minimum export price (MEP), which essentially meant that farmers could not sell their produce abroad below this rate.

The Directorate General of Foreign Trade (DGFT) notification issued on Friday removed MEP with immediate effect. The government has reduced the duty on onion exports from 40 percent to 20 percent. There is no export duty on 'Bangalore Rose Onion'.

Last week, Consumer Affairs Secretary Nidhi Khare had said the outlook for onion availability and prices in the coming months remains positive as the area under kharif (summer) onion sowing has risen sharply to 2.9 lakh hectares till August from 1.94 lakh hectares in the same period a year ago. She said farmers and traders still have about 38 lakh tonnes of onion in storage.

Commerce and Industry Minister Piyush Goyal has said that by removing MEP and reducing the export duty from 40 percent to 20 percent, onions can be exported in large quantities. He said on the social media platform 'X', "This decision will increase the income of farmers and exporters and will give a big boost to the business in the agriculture sector." Regarding the removal of MEP on Basmati rice, the minister said that this will help in increasing exports and farmers' income.