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Government may provide direct subsidy to states to fight onion menace

The Centre is exploring the option of giving direct subsidy to states from the price stabilisation fund to procure onions.

, ET Bureau|
Aug 25, 2015, 04.00 AM IST
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The Centre is exploring the option of giving direct subsidy to states from the price stabilisation fund to procure onions.
The Centre is exploring the option of giving direct subsidy to states from the price stabilisation fund to procure onions.
NEW DELHI: The Centre is exploring the option of giving direct subsidy to states from the price stabilisation fund to procure onions.

Although no state government has yet approached the Centre for subsidy under the fund, which is meant to provide interest-free loans, officials said a decision in this regard is expected in the next two days given the spike in prices of the commodity. The Centre expects onion prices to correct by mid-September when arrivals of imported produce pick up.

“The ministry is looking into the issue and might decide to give direct subsidy to state governments to procure onion and sell at subsidised rates to consumers,” said an official of food and consumer affairs ministry. The fund is managed by a price stabilisation fund management committee under the chairmanship of the secretary of agriculture department. It is likely to hold a meeting on August 27 to assess the situation.

Officials in the agriculture ministry said that letters have been sent to state governments reminding them of the central fund, which could be used to ensure that consumers get onions at affordable rates. “No state government has replied to us on the two letters sent by my ministry on the onion shortage in their state and how much they want to buy,” said agriculture minister Radha Mohan Singh.

The minister said the Small Farmers’ Agribusiness Consortium (SFAC) and NAFED have used the fund to procure onions from the open market and they sell to the Delhi government.

The SFAC and NAFED have procured 8,368 tonnes of onions till date from Rs 16 crore taken from the fund, officials said. The agencies have been procuring onions directly from farmers or farmers’ organisations at farm gate or mandi and making the produce available at a reasonable price to the consumers, they said.

The farmers’ consortium is supplying onions at Rs 30.50 a kg to Mother Dairy’s fruit and vegetable store Safal, which is retailing at Rs 39 a kg in Delhi.

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