Pune: The prices of onions are crashing due to lockdown. Therefore, MahaFPC, the umbrella body of farmers and also the state-level implementing agency of NAFED for procuring onion under price stabilisation fund (PSF) has written a letter to Union MoS for Consumer Affairs, Food and Public Distribution, Raosaheb Danve Patil. The MahaFPC has asked for a minimum price for the procurement as the prices of onions.

"The annual onion production has increased in the state by 45 lakh tonnes. Due to low demand because of the lockdown, there is a glut situation. Farmers are unable to fetch good rates for their produce as some of the place farms gate rates are between Rs 2 to Rs 5. The market is crashing everywhere and affecting the farmers," said Yogesh Thorat, Managing Director of MahaFPC.

He also informed that the minimum price for the procurement at present has been decided as Rs 8 per Kg. However, it is still less than the production cost.
 
Price stabilisation fund
Procurement of onion under the price stabilisation fund (PSF) scheme in the state started in the second fortnight of April. Under this scheme, a buffer stock is created for commodities to combat the price rise. 
 
The letter states that as per the SoP for PSF R-20 procurement season, the price discovery is associated with the open auction in APMC's or an average of last three auctions modal and highest price for farm gate procurement. Due to lockdown as the supply chain has been disturbed, the market price of onion is below the cost of production in the state.

The letter further stated that the National Horticultural Research Development foundation (NHRDF) has calculated the cost of production for onion for Maharashtra Rs 934 per quintal. Therefore they have requested to procure onion under PSF based on the rate at a minimum of 1.5 times the cost of production; hence minimum procurement rate should be Rs 1401/per quintal to assure farmers remunerative prices and reduces onion growers distress.

Thorat further said, "The cost of production decided by NHRDF in the state is Rs 9.34 per kg or Rs 934 per quintal. However, since the market price is crashing everywhere, prices are lower than the cost of production. Therefore, to ensure a better price, we have written a letter requesting the same."

He also mentioned, "This year, the procurement is a challenge as there are storage issues and also the good quality procurement is a problem as in some areas the produce is of not good quality due to the unseasonal rainfall and other climatic issues." 

The total target of onion procurement from the state is 40000 MT, and at present 40 FPC is registered for this, and it is likely that number of FPC's will increase in coming days.