Govt plans special onion fund

Govt plans special onion fund

Aiming to intervene in times of price fluctuations and to stop distress sale, the Union Government has now proposed to set up a special fund for onions.

The special onion fund has been proposed by the Union Ministry of Food and Consumer Affairs on the line of what the government currently has for sugar.  “Such a fund will help government to intervene in the event of price fluctuations and stop distress sale,” said the Union Minister of State (Independent Charge) for Food, Consumer Affairs and Public Distribution, K V Thomas.

The Union government recently brought down the Minimum Export Price (MEP) for onion by US $ 100 per tonne to stabilise prices, which have been on a downward trend. Thomas said his ministry had no objection even if the MEP were to be withdrawn in future.

Thomas said that he was discussing the proposal for a special fund for onion with Agriculture Minister Sharad Pawar.

Besides stabilising sugar prices, the government is also using the fund to cane-growers and millers to boost production, improve transportation and upgrade storage facilities.
Along similar lines, the onion fund would help set up modern storage in place where onion is grown more.

The special fund would enable the government to help agencies like National Agricultural Cooperative Marketing Federation or Nafed to carry out price support operations more effectively.  Curbing exports or other similar interventions that the government has to make now in the event of sudden and wide fluctuations in onion prices were not in the interest of both consumers and growers, added Thomas. 

The Directorate General of Foreign Trade recently brought down the MEP of all varieties of onions except Bangalore Rose and Krishna Puram varieties to US $150 per tonne.