The Food Ministry announced on Tuesday that the government has instructed the NCCF and the NAFED to commence purchasing 500,000 tonnes of onions directly from farmers to meet the country’s buffer requirement, as the Rabi-2024 harvest begins entering the market.
The government has instructed procurement agencies NAFED and NCCF to pre-register onion farmers. This measure aims to ensure that payments for the produce are directly transferred to their bank accounts through the Direct Benefit Transfer system.
The Rabi onion crop plays a vital role in the country’s onion supply, accounting for 72-75% of the annual production. Additionally, Rabi onions are essential for maintaining year-round availability due to their superior shelf life compared to Kharif onions, allowing them to be stored and supplied until November-December.
During 2023-24, the Department of Consumer Affairs, in collaboration with NAFED and NCCF, procured approximately 640,000 metric tonnes of onions for buffer stocking and intervention through simultaneous procurement and disposal. In 2023, onion farmers were guaranteed profitable prices owing to the continuous procurement efforts of NAFED and NCCF.
Continue Exploring: Govt extends ban on onion exports indefinitely
Following this, last year the Department of Consumer Affairs launched a retail sale intervention to supply onions to customers at a subsidised rate of INR 25 per kg through retail locations and mobile vans run by NCCF, NAFED, Kendriya Bhandar, and other state-controlled cooperatives.This timely intervention and controlled distribution effectively stabilized retail prices without adversely affecting farmers’ incomes.
Due to the global supply situation and the dry conditions caused by El Nino, the government implemented policy measures to regulate onion exports during FY 2023-24. These actions comprised a 40% duty on onion exports introduced on August 19, 2023, the enforcement of a Minimum Export Price (MEP) of USD 800 per MT starting from October 29, 2023, and a complete export ban from December 8, 2023. These steps were taken to guarantee the availability of onions to domestic consumers at reasonable prices.
The recent decision to extend the ban on onion exports is driven by the current domestic availability in relation to international prices and concerns about global availability.
Meanwhile, the government has permitted exports to neighboring countries that depend on India for their domestic onion consumption. These nations include Bangladesh (50,000 MT), Mauritius (1,200 MT), Bhutan (550 MT), Bahrain (3,000 MT), and the United Arab Emirates (14,400 MT, or 3,600 MT per quarter).
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