Maharashtra farmers take corporate route to keep onion prices steady

The Maharashtra government has teamed up with cultivators’ companies to buy their stock during times of surplus for release during lean periods.

At present, 50,000 tonnes of onion is being purchased from farmers under a joint venture between the National Agricultural Cooperative Marketing Federation (NAFED) and Maha-FPC--the apex body of farmer-producer companies in the state. This will form part of the buffer stock being created by the government. 

The onion will then be sold during the lean season when supplies dry up and prices begin to soar.

According to NAFED officials, storage and marketing infrastructure for onion is being constructed with funding from the government. 

"Cold storage and sorting facilities are being set up in Nashik, Pune and other onion-growing areas," said Nana Patil, Chairman, NAFED.

The initial corpus of Rs 25 crore is being shared equally by the government and farmer-producer companies, according to Patil.

‘MahaOnion project’ to be expanded

The MahaOnion project, which had a small start last year, is now being expanded and will cover most onion-growing areas in Maharashtra like Ahmednagar, Osmanabad and Aurangabad, according to NAFED officials.

In the past, NAFED used to procure onions from the mandis of Lasalgaon and Pimpalgaon. However, following the change in Agricultural Produce Marketing Committee (APMC) rules by the Maharashtra government, farmer-producer companies can bypass the APMCs and sell directly to NAFED.

"Under the MahaOnion project, we purchase, sort and grade onion which is then sent for storage," says Yogesh Thorat, Managing Director, Maha-FPC.

The joint venture hit the headlines after it provided jobs for sorting and grading onion to several thousand farmers in drought-hit areas.

According to Thorat, the MahaOnion project helped curtail the monopoly of traders who have a stranglehold on the onion trade.

Farmers who sold their produce to the joint venture earned a decent Rs 933 per quintal just weeks after wholesale onion procurement prices crashed to less than one rupee per kilo in the Lasalgaon and Pimpalgaon mandis. 

Though the amount of onion processed under the MahaOnion project is a small fraction of the total crop produced in Maharashtra, the state government expects the project to grow in the coming years.

The creation of the buffer stock is financed by the central government from its price stabilisation fund, according to sources.