Increased onion stock to regulate prices: Centre

Increased onion stock to regulate prices: Centre

Subject : Schemes

Areas of Cultivation:

The Major Onion producing states area Maharashtra, Karnataka, Madhya Pradesh, Gujarat, Bihar, Andhra Pradesh, Rajasthan, Haryana and Telangana. Maharashtra ranks first in Onion production with a share of 28.32%.

Climate

• Onion is a temperate crop but can be grown under a wide range of climatic conditions such as temperate, tropical and subtropical climate. The best performance can be obtained in a mild weather without the extremes of cold and heat and excessive rainfall
• It requires about 70% relative humidity for good growth. It can grow well in places where the average annual rainfall is 650-750 mm with good distribution during the monsoon period. Areas with low (< 650 mm) or heavy rainfall (>750 mm) are not particularly suitable for rain-fed crop.

Soil

• Onion can be grown in all types of soils such as sandy loam, clay loam, silt loam and heavy soils. However, the best soil for successful onion cultivation is deep, friable loam and alluvial soils with good drainage, moisture holding capacity and sufficient organic matter.

China was the largest producer of onions in the world in 2019 followed by India and the United States.

Onion buffer has been maintained by the Department of Consumer Affairs under the Price Stabilization Fund (PSF) with the objective of effective market intervention to moderate prices.

Key Points

• About PSF:
  • Established in 2014-15, PSF is any fund created to absorb extreme volatility in selected commodity prices.
  • Such goods will be procured directly from farmers or farmers’ organisations at the farm gate/mandi, and made available to consumers at a more affordable price.
  • Losses sustained, if any, between the Centre and the states must be shared in the operations.
  • The sum in the fund is usually used for activities aimed at bringing down/up the high/low prices say, for example, acquisition of certain goods and distribution of the same as and when appropriate so that costs remain within a range.
• Provides Loans:
  • The PSF scheme provides for the advancement of interest-free loans to State Governments/Union Territories (UTs) and Central Agencies to finance their working capital and other expenses, which they may incur in the procurement and distribution of such commodities.
  • The PSF scheme was transferred from the Ministry of Agriculture & Farmers’ Welfare to the Ministry of Consumer Affairs, Food & Public Distribution w.e.f. 1^st April, 2016.
• Fund Management:
  • It is centrally managed by a Price Stabilisation Fund Management Committee (PSFMC) that approves all State Government’s and Central Agencies’ proposals.
• Maintaining the Corpus Fund:
  • Small Farmers Agribusiness Consortium (SFAC), a society promoted by the Ministry of Agriculture and Farmers’ Welfare for linking agriculture to private enterprises, investment, and technology, maintains the PSF as a central corpus fund.
• Related Scheme:
  • Launched in 2018 by the Ministry of Food Processing Industries, Operation Green (OG) aims to build value chains of Tomatoes, Onions, and Potatoes (TOP) on the lines of “Operation Flood” (AMUL model) for milk in such a way that will ensure a higher share of consumer’s rupee goes to farmers and stabilizes their prices.
    • While presenting the Union budget 2021, the government announced that Operation Green (OG) will be expanded beyond TOP to 22 perishable commodities.