Faced with soaring onion prices, the Centre is considering imposing stock limits on the kitchen staple, but is also worried about the impact on farmers in poll-bound States, Food Minister Ram Vilas Paswan said.
Major onion producer Maharashtra is heading to the polls in less than a month. If the government takes hasty actions to impose stock limits, it could be accused of being against farmers interests, Mr Paswan told journalists on Tuesday.
Off-loading buffer stock
Instead, the Centre hopes that its 50,000 tonne buffer stock will help to calm down prices which have crossed the ₹70 per kg mark in many of Delhi retail markets. In Hyderabad, the vegetable sold for ₹100 per kg on Monday — the highest rate among major metros — according to data from the National Horticulture Board.
At major wholesale markets across the country, onions have sold at an average maximum price of ₹29.88 per kg this month. This is a four year high for September — the last time prices touched these levels was in 2015, when the average maximum price was a whopping ₹45.67 per kg.
“So far, 15,000 tonnes have been offloaded from the buffer stock. We can think about imposing a stock limit on traders once the buffer is exhausted,” said Mr. Paswan. Until then, the government must carry out a “balancing job”, keeping the interests of both farmers and consumers in mind, he added.
The recent floods in the major producing States have affected the storage and transportation of the winter crop which was harvested earlier this year, resulting in supply disruptions to mandis. The onions planted in the summer come to the market by November, but excess rains are likely to hit production. Hoarders are exacerbating the situation and a stock limit would help prevent “speculative behaviour by traders”, said an official statement.
At a separate event on Tuesday, Agriculture Minister Narendra Singh Tomar reiterated the government’s need to consider farmers’ concerns. “Sometimes, consumers have to pay a high price for farm produce, while at other times, farmers get a lower price. Our role is to balance this,” he said, adding that the situation would improve as more onions are released from the buffer stock over the next few days.
For the past few weeks, central agencies NAFED and NCCF have been selling onions at ₹22 per kg via fair price shops and mobile vans. At Mother Dairy’s Safal shops in the NCR, national capital region, onions are available at ₹24 per kg.
We have taken steps to increase the supply in the market, and have urged state government to lift onions from NAFED’s buffer stock as well,” said Mr. Paswan. So far, Delhi, Tripura, Haryana, Odisha and Andhra Pradesh have taken up the offer. The Centre has also taken steps to disincentivise onion exports, begin importing the vegetable, and to crack down on hoarders and black-marketers.
“Now we have to wait and watch. We will look at other options like stock limit if the current high price situation continues,” he said.