Food ministers to discuss price stabilisation, onion export price

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SME Times News Bureau | 21 May, 2016
Falling prices of onion in wholesale markets in Maharashtra, escalating prices of pulses, edible oil and sugar, and the need to take steps for price stabilisation will figure prominently at the states' food ministers conference in New Delhi on Saturday.

The meeting, convened by union Food Minister Ram Vilas Paswan, is expected to discuss specific action plans to strengthen the price monitoring mechanism and coordinated strategy to check hoarding of pulses, sugar and also onion in some states, in particular.

The meeting to be attended also by Agriculture Minister Radhamohan Singh and Commerce Minister Nirmala Sitharaman could also discuss minimum export prices for onion as absence of adequate storage facilities and less procurement has resulted in fall in its prices at wholesale markets in Maharashtra, official sources said.

The decline in prices of onion has also sparked off farmers' stir in Nashik region in Maharashtra.

Kolhapur MP Raju Shetti of Swabhimani Shetkari Sanghatana (SSS), a constituent of BJP-led National Democratic Alliance (NDA), led the agitators. Shetti is also demanding a minimum support price (MSP) for the commodity, an essential ingredient for major Indian dishes.

The food ministry has been specifically instructed by the Prime Minister's Office (PMO) to work in coordination with the states to improve the supply chain, and use the Price Stabilisation Fund to ensure easy availability of commodities, an official source told IANS on Friday.

"The meeting will also take up agriculture sector reforms for marketing farmers produce," the source said.

In order to prevent prices of pulses from skyrocketing like last year, the food ministry has released substantial quantities of tur and urad from buffer stocks to be sold at subsidised rates.

Earlier this month, Paswan admitted that onions "bring tears" either way -- high or low prices.

The central government has procured 2,300 tonnes of onions directly from farmers this year so far to build buffer stocks and sources said that the procurement so far this year was higher than last year.

The central government has allowed private purchase but remains cautious about hoarding.

While it has asked the states to be vigilant about hoarding by unscrupulous elements in states like Maharashtra, Gujarat, Rajasthan and Madhya Pradesh, the food ministry has said that the states should also come forward and buy the produce.

"The union government can provide support to such states and could pay up to 50 percent as assistance under the Price Stabilisation Fund," a source said.

Since early May, farmers, especially in Maharashtra, are virtually being forced to sell onions at a throwaway price of Rs.3 per kg due to bumper crop this year and absence of adequate procurement and lack of storage.

Shetti also has demanded that the government should immediately intervene and give incentives to onion growers and facilitate better exports.

The fluctuating Minimum Export Price (MEP) for onion often discourages export of the produce.

Government sources also admit that while wholesale prices have fallen considerably, there is a risk that improper management at this juncture could lead to huge destruction as well as hoarding of onion which could ultimately result in abnormally high prices by August.

"We want to avoid a situation like September-October 2013 when retail onion prices skyrocketed to about Rs.100 per kg after rains affected crops in Karnataka and Maharashtra," said a top food ministry source.