Government has directed NCCF and NAFED to initiate procurement of 5 lakh tonnes of onion for the buffer requirement directly from the farmers

In the current year, the Government has directed NCCF and NAFED to initiate procurement of 5 lakh tonnes of onion for the buffer requirement directly from the farmers as Rabi-2024 harvest started arriving in the market. For the procurement, NAFED and NCCF are to pre-register the onion farmers to ensure that payments to the farmers are transferred to their bank accounts through Direct Benefit Transfer.

Rabi onion is critical for country’s onion availability as it contributes 72 -75% of annual production in the country. The Rabi onion is also crucial for ensuring year-round availability of onion as it has better shelf life compared to Kharif onion and can be stored for supplies till November- December.

It may be recalled that the Department of Consumer Affairs had, through NAFED and NCCF, purchased about 6.4 LMT of Onion during 2023-24 for the buffer stocking as well as intervention by way of simultaneous procurement and disposal. The continuous procurements by the NAFED and NCCF have guaranteed remunerative prices for onion farmers all through the year in 2023. Subsequently, the Department of Consumer Affairs adopted retail sale intervention for disposal of onion through retail outlets and mobile vans operated by NCCF, NAFED, Kendriya Bhandar and other State controlled cooperatives at subsidized price of Rs.25 per kg during last year. The timely intervention and calibrated release ensured stabilization of retail prices effectively without impacting farmer realization.

Global supply scenario and dry spell induced by El Niño had necessitated the Government to take up policy measures to regulate onion exports during FY 2023-24. These measures included 40% duty on onion exports imposed on 19th August 2023, imposition of Minimum Export Price (MEP) of USD 800 per MT with effect from 29th October, 2023 and export prohibition w.e.f. 8^th December, 2023 to ensure availability of onion to the domestic consumers at affordable prices.

The recent decision to extend onion export prohibition has been necessitated by the overall domestic availability against the prevailing international prices and global availability concerns.  The Government, meanwhile, has allowed exports to neighboring countries that rely on India for their domestic consumption requirements.  The Government has allowed the export of Onion to Bhutan (550 MT), Bahrain (3,000 MT), Mauritius (1,200 MT), Bangladesh (50,000 MT) and UAE (14,400 MT i.e. 3,600 MT/ quarter).