Federal Initiatives Drive Market Adjustments in India’s Top Onion Hub
In Maharashtra, India’s foremost onion-producing state, the federal government has taken decisive steps to stabilize onion prices ahead of imminent assembly elections. Procurement prices have surged by 74%, rising from Rs 16.93 per kg to approximately Rs 29.5 per kg via direct benefit transfer (DBT) compared to the previous year. This move is part of a broader strategy to enhance food security and mitigate inflationary pressures.
Last year’s sharp increase in onion prices prompted the government to enforce a temporary ban on exports, aiming to safeguard domestic affordability. This decision, while contentious among farming communities, aimed to ensure market stability and control consumer costs. Currently, the government plans to procure 500,000 tons of onions to bolster strategic reserves and buffer against future price fluctuations.
The National Cooperative Consumers’ Federation of India (NCCF) and National Agricultural Cooperative Marketing Federation of India Ltd (Nafed) have been allocated procurement targets of 250,000 tons each. This initiative not only supports farmers but also addresses retail inflation concerns, particularly after a notable 38% increase in onion prices recorded in May.
Looking ahead, efforts are underway to expand onion cultivation beyond Maharashtra and Karnataka, benefiting an estimated 10,000 farmers during the upcoming rabi season, compared to 6,100 last year.
