Govt to procure 2 LT of onion to create 5 LT buffer stock

A day after the Centre's decision to impose 40 per cent duty on export of onion, the Government has announced that it will procure an additional 2 lakh tonnes of the kitchen staple. The idea behind the move is to maintain a total buffer stock of 5 lakh tonnes this year and use it for retail intervention to improve local supplies and check its prices.

For the current 2023-24 fiscal, the target for onion buffer was kept at 3 lakh tonnes, which has already been procured. Currently, the same buffer stock is being disposed of in the targeted markets in select states to improve the local availability and check price rise. According to the official data, all-India average retail price of onion was ruling 19 per cent higher at Rs 29.73 per kg on Sunday compared to Rs 25 per kg in the year-ago period. In Delhi, retail price of onion has increased to Rs 37 per kg from Rs 28 per kg in the said period.

"In an unprecedented move the government raised the quantum of onion buffer to 5 lakh tonne this year, after achieving the initial procurement target of 3 lakh tonne," Consumer Affairs Ministry said in a statement. The National Cooperative Consumers' Federation of India (NCCF) and the National Agricultural Cooperative Marketing Federation of India (NAFED) have been directed to procure one lakh tonne each to achieve the additional procurement target alongside calibrated disposal of the procured stocks in major consumption centres, it said.

The buffer stock is maintained under the Price Stabilisation Fund (PSF) to meet any exigencies, if rates go up significantly during the lean supply season. The government had maintained a buffer onion of 2.51 lakh tonne during the 2022-23 fiscal. On disposal of onion from the buffer stock, the ministry said it has already commenced in target major markets in states and union territories where retail prices are above the all-India average and/or are significantly higher than the previous month. 

"As of date, about 1,400 tonnes of onions from the buffer have been dispatched to the targeted markets and are being continuously released to augment the availability," it said. Apart from releasing in major markets, onions from the buffer are also being made available to retail consumers at a subsidised rate of Rs 25 per kg through retail outlets and mobile vans of NCCF from August 21 in key markets.

"Retail sale of onion will be suitably enhanced in coming days by involving other agencies and e-commerce platforms," according to the ministry. The multi-pronged measures taken by the government onion like procurement for the buffer, targeted release of stocks and imposition of export duty will benefit the farmers and consumers by assuring remunerative prices to the onion farmers while ensuring continuous availability to the consumers at affordable prices, it added.

Meanwhile, National Cooperative Consumers' Federation of India (NCCF) is commencing retail sale of onion from the government buffer stock at a subsidised rate of Rs 25 per kg in the national capital from Monday to give relief to consumers from high prices of the commodity. The NCCF is already selling tomatoes on behalf of the central government at a subsidised rate and it has now been mandated to retail buffer onion.

"To begin with, we have start retailing buffer onions in Delhi. We are selling at a subsidised rate of Rs 25 per kg through our mobile vans and two retail outlets," NCCF Managing Director Anice Joseph Chandra said after the government's decision to create a buffer stock of onions. To begin with, around 10 mobile vans are selling onion in the national capital and more areas will be covered gradually. NCCF also plans to sell onion online via ONDC (Open Network for Digital Commerce) platform and it is working out modalities.

The government has identified Delhi, Andhra Pradesh, Telangana, Himachal Pradesh and Assam for the market intervention. The availability is being enhanced in these five states by disposing of buffer onion both in the wholesale and retail markets. At wholesale markets, buffer onion is being sold at mandi rate, while in retail markets at a subsidised rate of Rs 25 per kg. Retail sales is commencing in Delhi from Monday, while in other four states it will start after two days.

As per the official data, all-India average retail price of onion increased by 19 per cent to Rs 29.73 per kg on Sunday, from Rs 25 per kg in the year-ago period. In Delhi, retail price of onion increased to Rs 37 per kg from Rs 28 per kg in the same period.