Govt procuring onions at Rs 2,410/quintal, to ensure welfare of farmers: Piyush Goyal

An Indian household for example eats 5 kg of onions each month, adding up to an annual domestic consumption of 15 million tonne

The central government has begun procurement of onions at Rs 2,410 per quintal from August 22 as prices of the commodity went on an upswing. “The step is being taken to ensure that both farmers and consumers benefit,” Minister of Consumer Affairs and Food Piyush Goyal said during a press briefing.

The government has increased the onion buffer to 5 lakh metric tonnes (mt) for the current year, surpassing the initial procurement target of 3 lakh mt. “This year, we have bought 3 lakh mt onions because of which prices have risen and farmers have earned considerable profits. Further, the government decided to buy an additional 2 lakh mt. There is no bar on procurement, this number would be increased if needed,” the minister added.

The FOB (Free On Board) price which is the price goods are being exported at had stood at $320 per quintal. "This translates into Rs 18-20 per kg of realization for the farmers which is much below Rs 24.10 which we are offering," Goyal said.

The current prices of onion are ruling at about Rs 40 per kilogram in various areas of country. The wholesale price for this kitchen staple had reached Rs 2500 per quintal at Asia's biggest onion markets in Pimpalgaon and Lasalgoan of Maharashtra on August 10.

The government has already started distributing onions from the buffer, with a focus on major markets within states and Union territories where retail prices exceed the national average or show a significant increase from the previous month.

These stocks are being made available at Rs 25 per kilogram to consumers in various areas.

Also read: After tomato, onion prices set for eye-watering rise

Prices on rise

Onion prices have been on a rise with prices rising from Rs 30 a kg to Rs 40 a kg now. Experts have given the trajectory for the commodity to increase significantly to Rs 60-70 per kg in the retail market starting early September on a likely shortfall in supplies.

Anticipating the price rise and fearing it will move the tomato way, the government intervened and on August 19, imposed a 40 percent duty on onion exports till December 31 with immediate effect to improve the domestic availability of the vegetable.

However, only two days later on August 21, the Agriculture Produce Market Committee (APMC) of Lasalgaon in Nashik, Asia's largest onion market, stopped the trading of the bulb indefinitely to protest against the Centre's imposition of a 40 percent export duty on the kitchen staple terming the policy “anti-farmer”.

However, the minister has assured the step is in farmer welfare. “Our intervention in tomato helped consumers and prices came down significantly. This has helped stabilise prices for 1.4 billion consumers and also helped farmers with the right prices. We aim to go the same way with onions,” Goyal said.

'Production healthy'

According to Goyal, the onion production this year looks healthy and should not become an issue forcing price rise. “Our production last two years was 317 lakh mt and 318 lakh mt, respectively. Kharif sowing this year is slow but estimates show that produced area will remain the same. I assess no problems in this commodity,” he said.

Goyal is also in continuous dialogue with both Maharashtra CM Eknath Shinde and Deputy CM Devendra Fadnavis. “Deputy CM Ajit Pawar and I too have spoken several times. I am also in touch with the Maharashtra agriculture minister and several other state ministers to keep an eye on the situation,” he added.

Maharashtra deputy CM Fadnavis tweeted on August 22: "I had a telephonic conversation with Amit Shah and Union Minister Piyush Goyal from Japan. Centre has decided to purchase 2 lakh metric tons of onion. Centre has announced that for the interest of onion growers of Maharashtra, special purchase centres will be set up in Nashik and Ahmednagar. Onions will be purchased at Rs 2,410 per quintal here. This will be a huge relief for the onion growers of our state."

Procurement of onions is being done from several districts of Maharashtra including Lasalgaon, Pimpalgaon, Umrane, Nampur, Manmad, Malegaon et al along with other states, as per the Minister.