Govt Directs NCCF and NAFED to Procure 5 Lakh Tonnes of Onion Directly from Farmers for Buffer Stock

In response to the current market conditions, the Government has issued directives to the National Cooperative Consumers' Federation (NCCF) and the National Agricultural Cooperative Marketing Federation of India (NAFED) to initiate the procurement of 5 lakh tonnes of onions directly from farmers. This procurement is aimed at fulfilling the buffer requirement as the Rabi-2024 harvest begins to arrive in the market. The initiative seeks to streamline the procurement process by pre-registering onion farmers, ensuring that payments are directly transferred to their bank accounts through the Direct Benefit Transfer system.

Rabi onion holds significant importance in the country's onion availability, accounting for 72-75% of the annual production. Notably, Rabi onions have a better shelf life compared to Kharif onions, allowing for storage and supply until November-December, thereby ensuring year-round availability.

It is noteworthy that during the 2023-24 period, the Department of Consumer Affairs, through NAFED and NCCF, procured approximately 6.4 lakh metric tonnes (LMT) of onions for buffer stocking and intervention purposes. These continuous procurements have provided onion farmers with remunerative prices throughout the year, ensuring stability in their income. Furthermore, retail sale interventions were implemented through outlets and mobile vans operated by NCCF, NAFED, Kendriya Bhandar, and other state-controlled cooperatives, offering onions at subsidized prices of Rs. 25 per kg, thus stabilizing retail prices effectively without adversely impacting farmer returns.

Given the global supply scenario and the dry spell induced by El Niño, the Government implemented policy measures to regulate onion exports during the fiscal year 2023-24. These measures included imposing a 40% duty on onion exports from August 19, 2023, setting a Minimum Export Price (MEP) of USD 800 per metric tonne effective from October 29, 2023, and prohibiting exports from December 8, 2023, to ensure ample availability of onions for domestic consumers at affordable prices.

The decision to extend the prohibition on onion exports reflects the Government's commitment to managing domestic availability in light of prevailing international prices and global supply concerns. However, exports to neighboring countries, which rely on India for their onion requirements, have been permitted.

The Government has authorized onion exports to Bhutan (550 MT), Bahrain (3,000 MT), Mauritius (1,200 MT), Bangladesh (50,000 MT), and the UAE (14,400 MT, i.e., 3,600 MT per quarter), balancing domestic needs with international commitments.