In the baking-hot fields of central India around Nagpur, onion has hit orange hard in a mini-trade war whose battle lines were drawn thousands of miles away. Caught in the crossfire, cotton too has become a casualty.
Thousands of farmers in Maharashtra's Vidarbha region, famous for its oranges, are sitting on a surplus of the fruit, unable to sell it in its main export market, Bangladesh, because of a complex web of conflicting foreign trade policies, market forces, and international trade dependencies.
In the baking-hot fields of central India around Nagpur, onion has hit orange hard in a mini-trade war whose battle lines were drawn thousands of miles away. Caught in the crossfire, cotton too has become a casualty.
Thousands of farmers in Maharashtra's Vidarbha region, famous for its oranges, are sitting on a surplus of the fruit, unable to sell it in its main export market, Bangladesh, because of a complex web of conflicting foreign trade policies, market forces and international trade dependencies.
Orange growers used to send 6,000 tonnes of the fruit daily to Bangladesh until last year, but that trade reduced to a trickle after Dhaka increased its import duty on oranges from Rs 20 per kilogram in 2019 to Rs 88 per kilogram in November 2023. This raised the price of oranges in Bangladesh, making it uneconomical for local traders to buy from India.
"We barely send 100 tonnes or five truckloads of oranges per day now," Manoj Jawanjal, president of the Nagpuri Santra Farmers Producer Company, told PTI, as he walked through rows of orange trees in his orchard, about 60 kilometres west of Nagpur.
Farmers in Vidarbha believe that Bangladesh increased the import duty in retaliation after India banned the export of onion, a staple of local cuisine, to protect the domestic market. The ripple effect showed how intricately linked is global trade, where one action can impact tens of thousands of lives across a continent.
Late last month, the government relaxed the export ban on onions, which was imposed in December last year, allowing its shipments to Bangladesh, UAE, Bhutan, Bahrain, Mauritius and Sri Lanka. It is not clear if onion exports, particularly to Bangladesh, will lead to its government reducing the import tax on oranges.
If it does, farmers from Maharashtra, the largest producer of oranges in the country, will get some relief for the next harvest in December.
Farmers say Nagpuri oranges are a must for Bangladeshis after every meal because its juicy fibre has the right Ph value to soothe the gut after consuming a meat heavy diet that is common in that country.
In the tit-for-tat trade fight, it's not just oranges that have suffered.
The fluctuation in prices of cotton has also hit farmers of Vidarbha, so rich in the crop that the British colonial rulers set up a railway network in the late 19th century in the region solely to transport cotton bales to Bombay, for shipping onward to the textile mills of Manchester.
"I still have 130 quintals of cotton from last year's harvest. I could have sold it then for Rs 8,500 per quintal. I held back hoping the price will go up, but the opposite happened," Manoj Khutate, a progressive farmer, told PTI, sitting under the shade of a massive tree on the edge of his friend Jawanjal's 40-acre orange orchard.
Khutate's worry is that cotton cannot be stored long as it starts yellowing with time, and the quality degrades. Currently, cotton prices are in the range of Rs 7,100-7,300 per quintal, which according to farmers does not cover the cost of cultivation.
"If EXIM policies are good, then the youth will be attracted to farming," said the blue jeans clad Jawanjal, who co-owns the farm with his brother.
The idyllic surroundings of the tranquil, neatly laid out farm with its clean air attracted Jawanjal's nephew, Apurva, a trained mechanical engineer, to give up a job in Bengaluru and return to Katol to work in the family business.
With export at a near standstill, Apurva said the family is now dependent entirely on the nearby markets in Warud and Amravati to sell the produce from the orange trees in the orchard.
He said farmers were selling oranges at a loss of Rs 10-20 per kg when compared with the cost of production.
"There is a huge difference in prices when we used to send oranges to Bangladesh and now. Things were smooth earlier," said Apurva.
"Inki aayaat-niryaat neetiyon ki wajah se kisaan lamba ho gaya hai (the export-import policies have hit the farmers hard)," Jawanjal said.
Apurva and his friend Indrajeet Ingle who also quit an engineering job in Pune to join his family farm near here are now banking on pulp factories to save them. One such factory is in Nanded, about 400 km from here, which uses orange peels to make oil and its pulp to make pectin, which has medicinal properties.
The company has a crushing capacity of 400 tonnes of oranges per day and has helped farmers offset some losses caused due to the virtual shutting down of Bangladesh markets for their produce.
The farmers are also pinning their hopes on a food processing plant, which is planned to come up at the Multimodal International Cargo Hub and Airport at Nagpur (MIHAN), a multi-product special economic zone.
Commerce Minister Piyush Goyal acknowledged in the Lok Sabha in December that the increase in import duty rates by Bangladesh has affected India's export of oranges, as the neighbouring nation is a major export destination for the citrus fruit.
Goyal said India had requested Bangladesh to revisit the policy in the interest of the orange farmers in India, only to be told that it was applicable for imports from all countries without discrimination.
Several farmers PTI spoke to in the region said they have raised these issues with the political leadership, but to no avail.
They indicated that the crisis could have an impact on their vote in the ongoing Lok Sabha elections.
"We did not favour the Congress last time. Had their policies been good, farmers would not have committed suicide here. But the condition of the farmers is much worse now," Khutate said.
He said many farmers are now wondering if it is worth voting for the Mahayuti alliance of the BJP, Eknath Shinde's Shiv Sena and Ajit Pawar's Nationalist Congress Party. Vidarbha region accounts for nine Lok Sabha seats, excluding the urban seat of Nagpur city where Union Minister Nitin Gadkari has a stranglehold.
Katol is part of Ramtek parliamentary constituency where BJP ally Shiv Sena has fielded Raju Parwe against Shyam Barve of Congress. It voted in the first phase on April 19.
Historically, China has been the largest buyer of Indian cotton yarn. But Bangladesh took its place and became the largest importer of Indian cotton yarn over the past two years. Earlier this year, the government slashed import duty on cotton, allowing the textile industry to buy extra-long staple cotton from abroad.
"When there was a nominal increase in cotton prices, the government encouraged import of cotton. When our farmer is producing cotton big time, then why pay foreign farmers," Jawanjal said.
He said a similar approach was adopted when onion prices started rising domestically. To bring down the prices, the government stopped the export of onions.
"To please 20 per cent consumers, the government bans export of onions, a move that directly hit us," Jawanjal said.