Two union ministers assured consumers about the adequate stock of onions available with agencies like Nafed that will be released in the market to contain the price rise.
Onion Prices: Alarmed by rising onion prices that touched Rs 80 per kilogram in retail trade, two union ministers Tuesday said that the government will ensure enough supply of the commodity in the market. While union agriculture minister Narendra Singh Tomar in New Delhi said that the prices will come down as government agencies like Nafed will increase the supply in the market; food and public distribution minister Ram Vilas Paswan blamed the floods in several parts of the country that aggravated the situation. The government has a buffer stock of 50,000 tonnes of onion to meet any requirement, said the agriculture minister as he sought to assure the consumers that the price will subside in the next few days.
“Onion situation will improve in the next few days. Cooperative Nafed is releasing stock from the central buffer at a lower price. We have enough stock of onions,” agriculture minister Narendra Singh Tomar told reporters on the sidelines of a function in New Delhi.
“You have seen that due to floods in several parts of the country like Maharashtra and Madhya Pradesh, the transportation is disturbed. It is also one of the reasons,” consumer affairs minister Ram Vilas Paswan said while talking about the reasons behind the sudden spike in onion prices in last one month.
“We have a buffer stock of 50,000 tonnes of onions,” he added.
The Union government was aware of the price build-up in onion prices. It also took several steps over the last two weeks to contain the situation. In order to discourage export of the commodity, it announced a fixed minimum export price (MEP) of $850 a tonne for export of all varieties of onions. However, it failed to have the desired effect, forcing the government to consider imposing stock limit on traders.
Under the essential commodities act of 1955, the Union government is empowered to notify stock limit for a commodity for a specific period to prevent its hoarding. Once a state has notified the stock limit recommended by the Union government then all market participants like retailers, wholesalers, traders, and exporters will have to comply with the stock limit. It ensures more supply in the market to cool down the prices.
However, some agriculture experts disagreed with the government’s view of imposing the stock limit to contain the prices.
“Instead of imposing the stock limit, the government should intervene in the market through price support scheme (PSS),” said Ashok Vishandass, former chairman of the commission for agricultural cost and prices (CACP).
“The government should procure the commodity and then release it through agencies like Nafed,” he had told Financial Express Online earlier.
After increasing the MEP to $850 per tonne, the government has decided to release the stock of onions available with central agencies like Nafed.
“At times, consumers have to pay a high price for farm items; and at times, farmers get less price for their produce. Our role is to balance this. We are aware of it and are taking several measures,” said agriculture minister Narendra Singh Tomar.