Govt directs agencies to procure onion from farmers as its prices crash

New Delhi [India], March 8 : The government has directed its procurement agencies to immediately intervene in the market for the purchase of Kharif red onion and for simultaneous dispatch and sale to the consumption centres in the wake of reports of their falling prices in the mandis.
It directed the National Agricultural Cooperative Marketing Federation of India Limited (NAFED) and the National Consumers Cooperative Federation of India Limited (NCCF) to procure onions from farmers.
To address the challenges of falling prices, the government has a Price Stabilization Fund for the procurement and storage of onion as a buffer to keep the supply chain smooth during the lean seasons.
The Ministry of Agriculture and Farmers Welfare on Tuesday evening said in a statement that NAFED in last ten days purchased around 4,000 tonne onions at a rate above Rs 900 per 100 kg from the farmers directly.
There were reports that the staple vegetable was fetching as low as Rs 1-2 per kg in Lasalgaon mandi -- India's largest onion market.
NAFED, according to the ministry's statement, has opened 40 procurement centres where farmers can sell their stock and get their payment online. NAFED has made arrangements for the movement of the stock from purchase centres to Delhi, Kolkata, Guwahati, Bhubaneswar, Bangalore, Chennai, Hyderabad and Kochi.
The estimated production of onion during 2022-23 is around 318 lakh tonne, surpassing last year's production of 316.98 lakh tonne.
"Prices remained stable due to consistency in demand and supplies as well export potential. However, the month of February saw a decline in prices of red onion, particularly in the state of Maharashtra where the modal rate dropped to Rs.500 -700/qtl. The experts attribute this fall due to overall increased production in other states, reducing the dependence on the supplies from the major producing district of the country i.e. Nashik," said the statement.
Onion is sown in all the states, however, Maharashtra is the leading producer with a share of around 43 per cent, Madhya Pradesh 16 per cent, and Karnataka and Gujarat contribute around 9 per cent of national production. It is harvested thrice a year, with cropping seasons reported during Kharif, late Kharif and Rabi.
The harvest of rabi is most important as it contributes nearly 72 -75 per cent of national production and is harvested from March to May months. The shelf life of the Rabi harvest is highest and stored worthy whereas the Kharif and late Kharif crop is for direct consumption and not store-worthy.
"The timing of the harvest of onion across the country provides a regular supply of fresh / stored onion all over the year. But sometimes due to vagaries of weather, either the stored onion is spoilt or the sown area gets damaged leading to supply constraints and rises in the domestic prices."
Last year, NAFED purchased 2.51 lakh tonne of Rabi onion as buffer stock.
"The timely and calibrated release ensured that the prices do not pick up abnormally. The stored onion was released all over the country, ensuring smooth supplies."
This season too, it decided to keep 2.5 lakh tonne as buffer stock.
"The storage of onion is challenging as majority of the stock is stored in the open ventilated structures (Chawl) in the open fields and this storage has its own challenges. Therefore, there is a need of scientific cold chain storage which is under trial for the longer shelf life of onions. The success of such models will help in avoiding such kind of price jerks as witnessed recently. The market watchers also suggest consistency in export policy, as the same will ensure a better export market for the Indian onion," the ministry's statement said.