In order to stabilise prices, the National Agricultural Co-operative Marketing Federation of India Ltd (Nafed) has urged the Union government to allow central agencies like it, and the Small Farmers' Agribusiness Consortium (SFAC) to export onions under the Price Stability Funds (PSF). Nafed made such a proposal to the ministry of commerce of the central government.
Speaking to Times Of India, a source from Nafed said, "We had discussions with the top officials from the ministry of commerce on the onion issue. We have urged them to allow central agencies like Nafed and SFAC to export onions under the Price Stability Funds, which has been set up by the Centre to stabilise prices of select commodities like onion and potatoes in the country. The government will bear losses, if incurred, during export, but on the contrary, profit will also be added into the PCF account."
The source added, "The government will give an onion export target of 1 million metric tonnes to both Nafed and SFAC, which will help stabilise prices and save farmers from incurring losses."
Presently, onions arriving in the market are of the summer crop which is harvested in March and April. The summer crop has a shelf life of six-seven months. Hence, farmers prefer storing them in the hope of getting better prices later. Onions arriving in the market are four months old and the produce has started sprouting and rotting. Farmers have huge stocks of onions, but prices have declined a lot and they are unable to manage to obtain even the production cost. It costs Rs 1,000 per quintal to grow onions, but farmers incur losses if they get prices below that. Now, onion prices have declined in the range of Rs 200 to Rs 600 per quintal, causing farmers to incur heavy losses.
During the last financial year 2015-16, the government introduced PSF for onions, potatoes and other crops with provision of Rs 5 billion in the budget. Last year, the government created a buffer stock of 12,000 metric tonnes through central agencies like Nafed and SFAC. But the scarcity compelled the government to import 10,000 metric tonnes through MMTC Ltd to meet the domestic requirement last year. For 2016-17, the Centre has made a provision of Rs 9 billion under PSF. This year, the government has already created a buffer stock of 15,000 metric tonnes so far through Nafed and SFAC.
Meanwhile, the ministry of commerce has decided to give a grant of 5% on onion export, but pitching Nafed and SFAC for export of onions will help stabilise prices in the country.
