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Parliamentary committee for the state of onion storage

GS Paper 3

Syllabus:  Issues of Buffer Stocks and Food Security

 

Source: DTE

 Direction: The article covers the reasons behind the fluctuation in the prices of onions in India and steps taken by the government to reduce this fluctuation.

 Context: According to the Parliamentary Standing Committee on Food, Consumer Affairs and Public Distribution report, storage facilities for onions run by the Centre are poor and need an immediate overhaul.

Background:

  • Onion prices skyrocketed beyond Rs 150 per kilogram in the winter of 2019 before stabilising.
  • As a result, the Centre accorded utmost importance to the reduction of storage loss in onion buffer stocks.
  • The percentage of loss on account of prolonged storage of onion in the buffer had been reduced to 26% in 2021-22 from about 28% in 2020-21.

Onion in India – Facts and figures:

  • India is the second-largest onion-growing country in the world and the Indian onions are famous for their pungency (sharp smell, and taste) and are available round the year.
  • There are 3 sowing seasons for the onion crop in India – Kharif (10%), late Kharif (20%) and Rabi (70%).
  • The Rabi onion crop is the mainstay of India and the price of the onion is normally lower during these months due to greater supply.
  • In 2020-21, the major onion-producing states are Maharashtra (39%), Karnataka, Madhya Pradesh (17%), Gujarat, Bihar, Andhra Pradesh, Rajasthan, Haryana and Telangana.
  • The major export destinations are Bangladesh, Malaysia, Sri Lanka, UAE, Nepal and Indonesia.
  • As India faces frequent onion demand-supply mismatches, resulting in price fluctuations, successfully storing rabi onions and scientific management of onion output in all three seasons is crucial.

 

Steps to arrest price rise and increase domestic supply:

  • Besides production augmentation, there are several policy tools available to arrest the increasing prices such as the –
    • Withdrawal of Merchandise Export Incentive Scheme (MEIS);
    • Building of buffer stock with an aim to intervene in case prices start rising abnormally;
    • Implementation of minimum export price;
    • Opening the export window for a limited period or quantity;
    • Imposition of stock limit on wholesale traders and retailers.

 

Operation Greens – From TOP to TOTAL:

 

Objectives of Operation Greens:

  • Enhancing value realisation of TOP farmers through –
    • Price stabilisation for producers and consumers
    • Reducing post-harvest losses by creation of appropriate storage capacity
  • Increasing food processing capacities and value addition in the TOP value chain.

 

Findings of the standing panel:

  • 51,583 million tonnes (MT) of onion had been damaged due to spoilage in the last three years.
  • The price of onions mounted too high during the recent months and such damage reflected poor management on the part of the Department (of Consumer Affairs).
  • Onions were traditionally stored in open-ventilated chawls while the development of modern scientific technology was still in the experimental stage.
  • It urged the Department to take due care for proper storage of onions so as to refrain from price fluctuation and to prevent black-marketing. This was also to be done keeping in view the vast procurement of onion (~250,000 MT).

 

Centre’s reply:

  • Onions from the buffer are being released in a targeted and calibrated manner to stabilise prices at local as well as national levels.
  • To develop technologies for the primary processing, storage and valorisation of onion, the Department has initiated a hackathon.
  • The hackathon would cover comprehensive solutions like improvement in the design of Kandha Chawls, pre-harvest care, primary processing such as drying, etc.

 

Insta Links:

Operation Greens

 

Mains Links:

Q. Elaborate on the policy taken by the Government of India to meet the challenges of the food processing sector. (UPSC 2019)