The Indian government has announced a significant increase in the onion procurement price as part of its Price Stabilisation Fund (PSF). The new rate has been set at Rs1,580 per quintal, which translates to approximately $18.45 per 100 kilograms. This adjustment is effective immediately, reflecting ongoing challenges in the agricultural sector.
Details of the Increased Onion Procurement Price
- Previous Rate: Rs1,235 per quintal ($14.42 per 100 kilograms)
- New Rate: Rs1,580 per quintal ($18.45 per 100 kilograms)
- Implementation Date: Effective Tuesday
Purpose and Concerns
The increased procurement price aims to support onion farmers and build buffer stocks. This move comes in response to criticism from farmers and political opposition. Many growers pointed out that the previous procurement price failed to cover production costs.
Union Agriculture Minister Shivraj Singh Chouhan had previously announced the lower procurement rate during an event in Satara on May 15. The latest change underscores the government’s efforts to stabilize onion prices amid rising production costs.
Market Dynamics
In Lasalgaon APMC, wholesale onion prices rose by Rs100 per quintal ($1.17 per 100 kilograms), reaching Rs1,350 per quintal ($15.77 per 100 kilograms). This increase followed a reduction in market arrivals. Traders had previously initiated a boycott of auctions on May 25 due to diesel shortages affecting logistics.
However, auctions resumed after local authorities assured traders of regular fuel supplies. On Monday, only about 800 tons of onions were auctioned at Lasalgaon APMC, well below the usual volumes.
Concerns from Farmers
The Maharashtra State Onion Growers’ Association has indicated that the revised procurement price still falls short of covering production costs, which are estimated at Rs1,800 per quintal ($21.03 per 100 kilograms). Bharat Dighole, the association’s president, emphasized the need for the government to raise the procurement price to Rs3,000 per quintal and provide additional grants to farmers who have sold onions at lower rates recently.
Further Recommendations
The association has also proposed an increase in the procurement volumes from 200,000 tons to 500,000 tons to ensure fair compensation for onion growers.
