Government to Create 5 Lakh Tonnes Onion Buffer Stock Amid Production Decline

The Indian government is planning to procure 5 lakh tonnes of onions this year to create a buffer stock that can be used to intervene in the market in case of a price rise, according to sources. The food and consumer affairs ministry had created a 5 lakh tonne buffer stock last year, of which 1 lakh tonne is still available, they added. Agencies like the National Cooperative Consumers' Federation (NCCF) and the National Agricultural Cooperative Marketing Federation of India (NAFED) will procure onions on behalf of the government.

Representative image

Subsidized Onion Sales Help Control Prices

Sources said that the government's decision to sell onions at a subsidized rate from its buffer stock has helped in controlling prices. The government will take a decision on lifting the ban on onion exports later this month, which is currently in place until March 31.

Decline in Onion Production

The government's plan to create a buffer stock comes amid an estimated fall in onion output in 2023-24. The agriculture ministry said in a statement on Thursday that onion production in 2023-24 is expected to be around 254.73 lakh tonnes compared to around 302.08 lakh tonnes last year. This represents a decline of 16% compared to the previous year.

The decline in onion production is attributed to a decrease in output in several key onion-producing states, including Maharashtra, Karnataka, Andhra Pradesh, and Rajasthan. Maharashtra alone is expected to see a decrease of 34.31 lakh tonnes, while Karnataka, Andhra Pradesh, and Rajasthan are expected to see decreases of 9.95 lakh tonnes, 3.54 lakh tonnes, and 3.12 lakh tonnes, respectively.

The government's decision to procure 5 lakh tonnes of onions for its buffer stock is a proactive measure to ensure market stability and prevent sharp price increases. The decline in onion production in 2023-24 highlights the importance of effective supply chain management and the need for measures to support farmers and mitigate the impact of production shortfalls.