Low onion prices hit Indian farmers, government comes to rescue

Record low prices of onions due to a bumper harvest have hit the Indian farmer hard, forcing the government to make large purchases to ease the situation.

The government said it had decided to buy 15,000 tonnes of onions from farmers in its bid to push up prices. This year’s onion production is expected to be 20.3 million tonnes (mt) against 19 mt last year.

Onions will be purchased at a price of 8.5-9.50 rupees/ kg, against the prevailing market rate of 1-2 rupees/ kg with, Food Minister Ramvilas Paswan said.

The price differential will be adjusted from the newly created Rs 900-crore price stabilisation fund.

State agencies such as the National Agriculture Cooperative Marketing Federation (Nafed) and Small Farmers’ Agri-Business Consortium (SFAC), both of which come under the ministry of agriculture will buy the produce at prices substantially higher than current market prices.

According to the minister, Nafed had already purchased around 1,500 tonnes of onion from farmers in Maharashtra, while SFAC has bought 800 tonnes.


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