Amid farmer protests, Centre launches drive to procure onions

HT had reported last week that onions could see an inflationary spell due to lower supplies

The Union government on Tuesday launched one of the biggest drives to buy onions directly from farmers at a record price, and justified the decision to levy a 40% duty on onion exports, as it tried to strike a balance between the interests of consumers and farmers.

The announcement by food, consumer affairs and commerce minister Piyush Goyal came after traders and farmers in Maharashtra protested restrictions on the overseas sales of onion, which they said would hurt incomes. The curbs came amid signs of lower supplies of the widely consumed vegetable and a rise in prices. (PTI)

The announcement by food, consumer affairs and commerce minister Piyush Goyal came after traders and farmers in Maharashtra protested restrictions on the overseas sales of onion, which they said would hurt incomes. The curbs came amid signs of lower supplies of the widely consumed vegetable and a rise in prices.

Goyal assured growers that their incomes would be protected, and that the government will buy onions directly from growers at a “historic” price of ₹2,410 per quintal (100 kg) to build a reserve of 500,000 tonnes. “There is no need for farmers to resort to any panic selling,” Goyal told reporters.

“Our effort is to look after the interests of both farmers and consumers. Some elements are trying to present a wrong picture. The protests are political,” Goyal said. “Farmers are being instigated but they have no reason to worry.”

Consumers are facing one of the highest inflation rates in recent months. Retail prices accelerated to a 15-month high of 7.44% in July, while vegetables rose an unprecedented 37%, according to official data.

Most vegetables have seen a rise in prices. Rates of tomatoes, another kitchen staple, saw a 201% increase in July but its price have since eased after fresh harvests. HT had reported last week that onions could see an inflationary spell due to lower supplies.

The National Cooperative Consumers’ Federation (NCCF) of India and National Agricultural Cooperative Marketing Federation of India (or NAFED), two state-backed food agencies, have opened procurement centres in major onion markets, such as Lasalgoan, Pimpalgoan and Ahmednagar in Maharashtra, and Shahpur in Madhya Pradesh, where farmers can sell their produce at profitable rates, the minister said.

Farmers were being sent text messages with details about the procurement drive, a NAFED official said, asking not to be named. The government will boost its onion stockpiles to 500,000 tonne this year, after having achieved its initial procurement target of 300,000 tonnes. This would benefit farmers, Goyal said.

NCCF and NAFED will procure 100,000 tonnes each to achieve the additional procurement target, alongside “calibrated disposal of the procured stocks in major consumption centres” consumer affairs secretary Rohit Kumar Singh said.

The government on Monday began selling onions at lower-than-market price of ₹25 a kg in Delhi, which will be gradually expanded to other cities which have seen a spike in rates. Onions are selling at ₹40-45 a kg in the national capital.

Separately, food secretary Sanjeev Chopra said the government had no plans to curb the export of parboiled rice or import wheat from Russia.

Indian consumers are particularly sensitive to onion prices relative to many other vegetables. Although production of the bulb has been adequate this year, heavy rain and flooding have damaged stored onions in Maharashtra, a major supplier, traders said.

Supplies also tend to dip during summer months due to an annual lean season, when stocks from previous harvests bottom out. The food minister said the acreage of summer onion was adequate and the government sees no drop in production.

“The move to restrict exports will hit farmers no matter what the farmers say,” said Anil Ghanawat of Shetkari Sangathana, a farmers’ body that advocates free trade