Onion price hike fails to satisfy farmers

The Centre will raise onion procurement price to ₹16.50 per kg from June 13, but farmers say it remains inadequate

Commodity Desk

MUMBAI

The Centre has increased the onion procurement price under its buffer stock programme to ₹16.50 per kg from ₹15.80 per kg, effective June 13, in a move aimed at improving returns for farmers and strengthening market intervention efforts.

  The decision comes at a time when onion growers, particularly in Maharashtra, have been demanding a significantly higher procurement price to offset rising cultivation expenses. 

 Maharashtra remains India’s largest onion-producing state and plays a crucial role in the country’s supply chain.

 Union Food and Consumer Affairs Minister Pralhad Joshi announced the revision after chairing a review meeting with officials of the Department of Consumer Affairs. According to the minister, the Minimum Assured Procurement Price (MAPP) has been revised to ₹1,650 per quintal, equivalent to ₹16.50 per kg, based on prevailing mandi rates and quality requirements for storage-grade onions.

  He said the government has also refined the pricing methodology to make procurement more responsive to changing market conditions.  The revised mechanism is expected to provide greater flexibility in ensuring fair compensation to farmers while maintaining adequate buffer stocks. The government maintains onion buffer stocks every year under the Price Stabilisation Fund (PSF). These stocks are used to manage supply disruptions and control excessive price volatility in retail markets.

  For the current season, the Centre has set a procurement target of 2 lakh tonnes. This is lower than the 3 lakh tonnes procured during the 2025-26 season. Onion procurement for the ongoing season began on May 15 through agencies such as the National Agricultural Cooperative Marketing Federation of India Ltd and the National Cooperative Consumers’ Federation of India.

  Despite the latest increase, farmers in Maharashtra continue to press for a procurement rate of ₹30 per kg, arguing that the current rates are insufficient to cover production costs.

  Earlier this week, grower groups said that procurement prices offered by NAFED and NCCF were well below their expectations.  They pointed to rising expenditure on seeds, fertilisers, labour, irrigation and transportation as major concerns.

   Jaydeep Bhadane, president of the Nashik district unit of the Maharashtra State Onion Growers Association, recently said that even with relaxed procurement norms, many farmers continue to face losses.

 According to the latest government estimates, onion production in 2025-26 is expected at 307.37 lakh tonnes, marginally lower than 307.67 lakh tonnes recorded in the previous year.

  With procurement operations gaining pace and fresh pricing measures in place, the government hopes to provide income support to farmers while ensuring adequate supplies and stable consumer prices across the country. 

The government considers onion a sensitive commodity because sharp price fluctuations directly affect both farmers and consumers. Through buffer stock operations, authorities procure onions during periods of excess supply and release stocks when market prices rise sharply. 

  Officials believe the revised procurement price and improved buying mechanism will encourage farmer participation and help maintain market stability in the months ahead.

(With inputs from PTI)