Maharashtra mulls subsidy as onion prices plunge

Tribune News Service

Mumbai, August 26

The Maharashtra government has proposed to provide a subsidy of Rs 100 for every quintal of onion following reports that farmers have had to sell the bulb at just five paise a kg in wholesale markets earlier this week.

The state finance department has estimated that the subsidy would come to around Rs 40 crore every year and has sought the central government’s help to share half the burden.

The decision on the subsidy comes after farmers threatened to dump the bulb on the roads in order to press their demand for minimum support price for the crop. However, the farmers are unhappy with the subsidy which translates to just one rupee per kg of onions. Representatives of farmers cultivating the bulb have demanded that the government increase the subsidy to at least Rs 500 per quintal since the cost of producing onions come to around Rs 900 per quintal.

According to sources at Lasalgaon, the main onion market in Maharashtra, wholesale price of good quality onions is at Rs 600 per quintal though poorer qualities are being dumped at below Rs 2 per kg. Traders usually mix both good and poor qualities of onions before selling it in the retail market.

Retail prices of onions in Mumbai continue to hover between Rs 13 and Rs 15. Maharashtra is seeing an onion glut even as supplies have increased from other parts of the country.

State Co-operation Minister Subhash Deshmukh had told reporters earlier this week that NAFED would procure onions directly from farmers under a market intervention scheme. However, the scheme is yet to take off, sources said.