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Govt to purchase 2Lt onions as excess inventory to meet future demand

Govt intend to purchase 2Lt onions as excess inventory to meet demand in festivals

The Union government intends to purchase 2 lakh tonnes of onions as excess inventory in 2021-22 to prevent price increases and maintain easy availability during the holiday and festive seasons when demand exceeds supply.

‘In 2019-20, we purchased approximately 57,000 tonnes, followed by approximately 1 lakh tonnes in 2020-21. We will buy 2 lakh tonnes in the next fiscal year to prevent prices from rising during the festive season,’ says consumer affairs secretary Leena Nandan.

She stated that the government is encouraging the private sector to develop warehouses facilities for onions, which must be stored at specific temperatures at various stages to meet the unexpected demands in future. ‘We are taking every precaution to keep onion prices from skyrocketing during the holiday season,’ she said.

In the year of 2021-22, the government has set aside Rs 2,700 crore for the price stabilisation fund (psf), which will be used to purchase buffer stock of onions and pulses. This is a 35% increase over the budgetary allocation for 2020-21.

‘This year, we will also purchase more pulses to distribute at subsidized prices.  Instead of 20 million tonnes, we plan to purchase 23 million tonnes in the next financial year,’ said another consumer affairs ministry official.

In the meantime, the government intends to achieve zero onion imports by 2021-22 by increasing acreage in non-onion growing areas such as the northeastern states, Punjab, and parts of Uttar Pradesh. The increase in area will also increase production, easing pressure on onion prices, which rise sharply to Rs 150 per kg during the festive season in October-November each year.

Also Read: Rs 2,700Cr for PSF to create buffer stock of onions and pulses

‘We imported approximately 36,000 tonnes of onions in 2020-21. We will meet this increased domestic demand by increasing cultivation area in non – traditional regions from 250 to 1250 hectares. We grow onions on 1.4 million hectares in total,’ mentioned A K Singh, the deputy director general, horticulture, Indian Council of Agriculture Research (ICAR).

Mr. Singh also stated that the government is trying to increase onion productivity from 18-19 tonnes to 25 tonnes per hectare.

‘Onion domestic demand is approximately 17 million tonnes per year. Because onions are in high demand in the Middle East, Bangladesh, and Sri Lanka, a huge quantity is exported. For increased yield, we need to increase productivity through better seed bulbs and other scientific interventions.’  ‘ In Mirzapur, Uttar Pradesh, we were able to achieve productivity of 25 tonnes per hectare,’ Singh told.

The government also has identified 17 districts in the country as One District One Focus Produce (ODOFP) zones for onion growing and processing. This will increase farmers ’ incomes by promoting onion production through a cluster approach.

As per the Ministry of Consumer Affairs, Food & Public Distribution, which monitors food commodity prices, the price behaviour of onions has nothing to do with production.

‘Onion production has steadily increased over the last decade, from 15.1 million tonnes in 2010-11 to 26.1 million tonnes in 2019-20. The annual domestic consumption is estimated to be around 17 million tonnes. As a result, supply constraints are not the cause of the price increase, according to a consumer affairs ministry officials. To reduce onion prices, the government banned exports, imposed stock limits, and placed import orders last year.

Also Read: Karnataka listed three districts to promote rose onion export under AEP

‘Onion production in 2020-21 is expected to be around 26.2 million tonnes, which is 50% more than the domestic requirement. As a result, farmers will be able to earn more through exports while consumers at home will be able to obtain the kitchen staple at a lower cost,’ added a consumer ministry official.