Centre to procure 2 lakh tonne onions from MP

The Dollar Business Bureau

The Central government has decided to procure 2 lakh tonnes of onion from Madhya Pradesh, to provide relief to the farmers of the state from declining prices of the crop.

The wholesale prices of onion have sharply declined to less than Rs.6 per kg in Madhya Pradesh as production of the crop was higher during late Kharif season of crop year 2016-17 (July-June).

“We have approved procurement of 2 lakh tonnes of onions under the Market Intervention Scheme (MIS) from Madhya Pradesh,” a senior official from the Agriculture Ministry remarked.

The procurement of onion will be conducted by the Madhya Pradesh State Cooperative Marketing Federation Ltd (MP-Markfed) at Rs.5,867/tonne for fair and average quality (FAQ) of the crop with overhead costs of Rs.1,467/tonne or actual, whatever is below, added the official.

The decision comes in the wake of the agitations by farmers in Madhya Pradesh against lower prices of agricultural commodities. The farmers in the state are seeking waiver of farm loans and higher support prices for produce.

Onion production during late kharif (summer) season of 2016-17 has been much higher, leading to huge arrivals of the commodity in mandis and drop in prices.

The reason for fall in onion prices was that the crop coming into the market was of 'table' variety and it was not stored because of low shelf life, the official said.

Over supply amidst low demand of agricultural commodities led to fall in prices, which has affected revenues of farmers. In addition, the arrivals on onion increased so much that the farmers are unable to grade their crops on the basis of size, according to traders.

Madhya Pradesh, is the second largest producer of onion after Maharashtra and produces around 26-28 lakh tonnes of onions yearly.