With onion prices showing signs of moderation after being on the rise through the past few days, the Centre has directed Mother Diary and other agencies to sell the commodity at about Rs 38 a kg in the national capital and its adjoining areas.
It also urged other state governments to use the price stabilisation fund to sell onions at prices below the market rate.
“We are willing to give state governments Rs 250 crore (Rs 2.5 billion) from the price stabilisation fund to enable them to sell onions at cheap rates,” said a senior official.
"The Centre had set up the price stabilisation fund with a corpus of Rs 500 crore (Rs 5 billion) to enable states to sell onions and potatoes at below-market rates in times of crisis.
The Centre has also decided to give subsidy of Rs 10 a kg on imported tur dal.
Last month, it had ordered the import of about 5,000 tonnes of tur dal.
While the commodity is being imported at Rs 77 a kg, the Centre will make it available to states at Rs 67 a kg.
Officials said the Centre was planning to meet senior officials from state governments on Thursday to find a long-term solution to the onion crisis, as well as discuss other issues related to the marketing of agriculture produce.
Officials said this year, Telengana had applied for a loan of Rs 18 crore (Rs 180 million) from the price stabilisation fund, of which the Centre would contribute Rs 9 crore (Rs 90 million).
On Tuesday, onion prices in the wholesale Lasalgaon market in Maharashtra fell to Rs 48.5 a kg on Tuesday from Rs 57 a kg last week, according to data provided by the Nashik-based National Horticultural Research and Development Foundation.
The fall was due to curbs on exports and fear of action against hoarding.
At Azadpur mandi in the national capital, wholesale prices declined by Rs 3-5 a kg to Rs 53 a kg, following an increase in arrivals of the new crop from Karnataka and Andhra Pradesh, said Azadpur Agricultural Produce Marketing Committee member Rajendra Sharma.
However, retail prices across the country continued to be as high as Rs 80 a kg.
“Prices declined due to an increase in arrival in mandis,” said NHRDF Director R P Gupta.
Arrivals increased as farmers/traders brought more stock for sale after the government raised the export price from $425 a tonne to $700 a tonne, Nashik-based traders said.
Fear of action against hoarding, coupled with the fact that MMTC has imported 10,000 tonnes of onions, also helped, they added.
On Monday, the Centre had asked the Maharashtra government to crack down on hoarders.
The arrival of the early kharif onion crop from Karnataka and Andhra Pradesh has picked up momentum, and this is likely to further help improve supply across the country till harvesting of the new crop begins in Maharasthra, the country’s largest onion producer, from October.
The West Bengal government has started selling onions at Rs 50 a kg through 49 government outlets.
Earlier, Chief Minister Mamata Banerjee had directed traders to crack down on hoarders and asked authorities to ensure people weren’t charged exorbitantly.
Image: Vendors arrange vegetables at vegetable wholesale market in Chandigarh. Photograph: Ajay Verma/Reuters
