Government To Create 1 Lakh Tonne Onion Buffer Stock In 2020
A worker holds onions at a market in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Government To Create 1 Lakh Tonne Onion Buffer Stock In 2020

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The union government has decided to create a one-lakh-tonne buffer stock of onions in 2020 to prevent a repeat of the Onion Crisis of 2019.

The government had a buffer stock of 56,000 tonnes in 2019 but that failed to contain onion prices. The kitchen staple is still retailing at Rs 100 per kg in most cities across India. The government was thus compelled to import through state-run MMTC Ltd.

"The issue was discussed in detail in a recent meeting of the group of ministers headed by Home Minister Amit Shah. It was decided that higher buffer stock of about 1 lakh tonnes will be created for next year," an official told Press Trust of India.

National Agricultural Cooperative Marketing Federation of India, or NAFED, which had maintained the buffer stock of onion on behalf of the government, will continue to do so next year. It will source the rabi (winter) onion crop, which has a higher shelf life, between March and July directly from farmers, the official added.

This year, onion prices fell sharply due to 26 percent fall in Kharif and late Kharif (summer) production due to late monsoon and later untimely rains in key growing states of Maharasthra and Karnataka.

To check rising onion prices, government took several measures to boost domestic availability including a ban on exports, stock limits on traders besides the sale of onion at subsidised rates from its buffer stock and imports.

Already, the government has exhausted its buffer stock of onion which was disposed at a subsidised rate in the local market. Now, it is selling imported ones.

MMTC, which is importing on behalf of the government, has contracted about 45,000 tonnes of onion from Turkey, Afghanistan and Egypt. The shipments are underway.

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