Union Minister Piyush Goyal
Credit: PTI File Photo
Amid rising price and protests by traders and farmers over imposition of 40 per cent export duty, the central government on Tuesday announced that it will buy additional 2 lakh tonnes of onion at a rate of Rs 2,410 per quintal in Maharashtra and Madhya Pradesh in order to beef up the buffer stocks.
The central government has already procured 3 lakh tonnes of onion through its two nodal agencies National Agricultural Cooperative Marketing Federation of India Ltd (NAFED) and National Cooperative Consumers' Federation of India Limited (NCCF), since March. The additional purchase will also be done by these two agencies. It will boost the buffer stock to 5 lakh tonnes.
Addressing a press conference Union Minister Piyush Goyal said the two central agencies would sell onion to consumers at a subsidised rate of Rs 25 per kg in different parts of the country. “This subsidy will be provided by the government,” he said.
In order to curb the recent surge in prices, the central government last week decided to impose 40% export duty on onions. This has led to widespread protests by onion farmers and traders in Maharashtra forcing the closure of several wholesale markets in Nashik, including Asia’s biggest onion market Lasalgaon.
Onion price in wholesale market has surged from around Rs 500 per quintal in March-April to over Rs 2,500 per quintal now. In retail market, onion is sold at over Rs 40 per kg in most part of the country and the prices are expected to further rise in the coming weeks.
Referring to the farmers’ protests over the imposition of 40% export duty, Goyal said the government’s decision to procure onion at Rs 2,410 per quintal would benefit farmers. “Both consumers and farmers are valuable to us. Our food giver (farmers) gets a good price. I invite all the farmers to sell their onions at good prices and they don't need to worry about anything,” he said.
The recent surge in onion price comes close on the heels of spike the prices of tomatoes, spices, cereals and pulses.
The spike in price of food items pushed retail inflation to 15-month high of 7.44% in July. Food inflation, which accounts for nearly half of the Consumer Price Index (CPI) basket, soared to 11.51% in July, the highest level since October 2020, as per the latest data released by the National Statistical Office (NSO). July food inflation is the third highest since the new CPI series began in 2014.