The MSAMF was appointed by the Government of Maharashtra following a February 12 notification by the Union Commerce Ministry, which relaxed the export ban on onions till May 1999. The ministry also permitted the state government to appoint an agency of its choosing to canalise 75,000 tonnes of the tuber till that date.

Alleging complete lack of transparency, the Indian Agro Produce Exporters' Chamber of Commerce (IAPECC) as well as NAFED, have charged the government-appointed agency withfavouring certain firms in allotment of quotas for Sri Lanka, Singapore and Malaysia while denying others permits.

In a letter to the MSAMF, exporters have asked the agency to explain how quotas for these countries were exhausted even before the March 15 deadline fixed for submission of the performance reports it had sought from applicants.

NAFED Director, Chandeorao Holkar, who has himself been denied a permit, has accused the agency of gifting away permits to two Pune-based firms, for export of 11,000 tonnes of onions to Colombo, Penang and Singapore. In a letter to the MSAMF, he has protested the decision, saying he was turned down even though he had a Letter of Credit to export 500 tonnes of onions to Colombo.

Holkar told The Indian Express that the central and state governments had sidelined NAFED since the cooperative was still controlled by persons affiliated to the Congress.

Pointing to another anomaly, the IAPECC says the Pune-based MSAMF should open an office in Mumbai as mostexporters are based there. It has also urged the agency to convene meetings in Mumbai and not in Pune to discuss the Minimum Export Price (MEP).

Among other issues raised by the IAPECC is the exorbitant Rs 10,000 registration fee, lack of transparency in fixation of the MEP, alleged mistreatment of the MSAMF staff and officials, and allocation of quota for new exporters.

Onion exports were banned in October last year, when prices zoomed to Rs 40 per kg in the wholesale markets in Nashik. With the subsequent arrival of the fresh crop, wholesale markets faced a glut, with prices plunging to below Rs 2 per kg. Therefore, the Union Commerce Ministry issued a notification on February 12 allowing the state government to appoint a canalising agency to allow exports from Maharashtra amounting to 25,000 tonnes per month for three months.

The country grows about 42 lakh tonnes of onions every year, of which 10 to 12 per cent is exported. This amounted to 4.48 lakh tonnes in 1997-98, which dipped to 2.12 lakhtonnes in 1998-99. Now, a bumper harvest of 47 lakh tonnes is predicted for 1998-99 against 36 lakh tonnes the previous year.