Agri Business

Onion buffer-stock: Growers demand ₹30/kg to sell to Nafed

Our Bureau Pune | Updated on April 12, 2021

Maharashtra accounts for 33 per cent of India’s onion production

Cite rising cost of production, and sale at profit by the co-op federation

Maharashtra’s onion growers are demanding a higher price for their produce from the National Agricultural Cooperative Marketing Federation of India Ltd (Nafed), which is looking to build a buffer-stock.

Over the last couple of years, the Centre has taken the initiative to build buffer-stocks that will help it on two fronts: One, the procurement will result in higher prices to growers and, two, the Government can offload the stocks when prices of the bulbs surge. In October last year, when onion prices topped ₹100 a kg in retail outlets across the country, the buffer-stock was used to tame prices, besides banning exports and allowing duty-free imports. This year, the Government is planning on a two-lakh-tonne buffer.

“Last year, Nafed procured onions from Maharashtra farmers at ₹8-10 per kg. If it is going to give us the same price this year, we will not allow Nafed to procure even one kg from Maharashtra” said Bharat Dighole, President, Maharashtra State Onion Growers’ Association. Last year, Nafed procured about one lakh tonnes of onion of which 75,000 tonnes were procured from Maharashtra. The onions were sold at ₹40-50 per kg when the market rates were high, say farmers. “We are not ready to accept Nafed’s pricing policy and demand a procurement price of ₹30 per kg,” Dighole added.

Nanasaheb Dattagi Patil, a Director at Nafed, told BusinessLine: “There is no basic minimum price for onions and, hence, the procurement price has remained a bone of contention.” Patil said that once Naed enters the market, onion prices go up benefiting farmers.

“Those demanding a higher price for onion procurement need to understand that they are not going to get the ₹30 per kg in the market they are demanding. The onion market fluctuates based on supplies and hence there is uncertainty. We are also facing storage problems,” he said.

Production cost up

According to growers in the Nashik region, the onion production cost has spiralled to ₹70,000-80,000 per acre due to the rise in the cost of labour, seeds, fertilisers, and pesticides with unseasonal rains adding to their burden.

“Nafed is not here to earn profit. When the onion procured at lower rates from farmers were sold at a higher price, the profit was not shared with farmers. This is nothing but depriving farmers of their rights,” Dighole added. Currently, prices for rabi onion that have a longer shelf-life are ruling at ₹950-1,000 a tonne compared with ₹700 during the same time a year ago.

Onions harvested in the Rabi have a longer shelf life and could be stored for a long compared to onion in the Kharif season. The government of India maintains buffer stocks of bulb onion for making appropriate price stabilising market interventions. Onion from buffer stock is released in a calibrated manner through retail intervention to retail agencies/State/UTs and open market sale during lean season/period to contain prices and availability.

Published on April 12, 2021

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