To enhance transparency in procurement processes, the Indian government will implement a direct benefit transfer (DBT) system to expedite payments to farmers for onion purchases at market rates by designated agencies for buffer stock creation. According to sources, farmers are required to register on a portal with their bank details to facilitate payment within seven days of procurement.
Previously, payment for onion procurement aimed at building buffer stocks was made to federations or cooperatives in Maharashtra by Nafed and the National Cooperative Consumers' Federation of India (NCCF), which then distributed funds to farmers. For the current fiscal year, both Nafed and NCCF are tasked with procuring 0.25 million tonnes (MT) each, contributing to a total buffer target of 0.5 MT. These agencies play a critical role in modulating onion supply in major cities to mitigate price volatility, supported by the price stabilization fund under the department of consumer affairs.
Starting this year, federations storing onions for buffer purposes must allocate at least 85% of their stock for market intervention, with a cap on storage losses at 15%. Moreover, 60% of the onions supplied must meet Grade-A quality standards. Proposals are also in place to leverage the National Agriculture Market (e-NAM) platform for transparent onion sales and to equip transport trucks with GPS for real-time tracking.
The continuous procurement activities by NAFED and NCCF have ensured stable incomes for onion farmers throughout 2023. Despite the indefinite extension of the export ban on onions beyond March 31, 2024, due to domestic availability concerns, India has permitted onion exports totaling 79,150 tonnes to countries like the UAE, Bangladesh, Sri Lanka, and Mauritius. This move comes amid projections of a 16% decrease in onion production to 25.47 MT in the current year, primarily due to a significant reduction in output from Maharashtra, the largest onion-producing state.
Source: financialexpress.com