New Delhi: At a time when the Modi government is importing 1 lakh metric tonnes (MT) of onion to ease domestic supplies and keep prices at check, NAFED , the co-operative wing of the government, has wasted over half of its onion buffer stock due to poor storage.
The National Agricultural Cooperative Marketing Federation of India (NAFED) had stored its buffer stock of onion using traditional methods, as opposed to cold storage, leading to the wastage.
Under the Price Stabilisation Fund (PSF), NAFED had managed a buffer stock of 57,372 MT of onion and stored it in Maharashtra and Gujarat. Of the total stock, NAFED has been able to disburse only 26,700 MT among the states and other agencies since August after prices in the retail market crossed Rs 40/kg. The rest were either disposed of in the local market due to being of sub-standard quality or were destroyed because of decay caused by moisture and rain.
“Almost 53 per cent of the onions procured by NAFED to ease shortage and the inflation crisis in the country was of no use to us,” a consumer ministry official familiar with the matter told ThePrint.
“NAFED was to create a buffer stock of around 60,000 MT for this year but they were only able to create a stock of 57,372 MT. Of this, 48,183 MT and 9,189 MT were from Maharashtra and Gujarat respectively,” said the official, who did not wish to be named.
NAFED blames weather
The government nominee in NAFED, Ashok Thakur, however, blamed the weather for the leakage.
“We preserve onions under normal circumstances only for one to two months,” he told ThePrint. “Even then, there is a 10 per cent spoilage of onion stored in one month, which increased to 25 per cent in 2-3 months. Due to rainfall we had to preserve the onions until November as against the usual September-October.”
“None of the onions were kept in cold storage this time. We managed only through traditional methods in farm storages but there was increased water flow and stagnation due to excessive rainfall in Maharashtra this year,” he added.
Soaring onion prices have the Modi government worried. A 30-40 per cent dip in production this year has led to fears that the retail price of onions, a key kitchen staple in India, is likely to touch Rs 100 per kg across the country by the end of November.
To ease the crisis, the government has approved the import of 1 lakh metric tonnes of onion.
The government has also mandated its agencies such as the IB, RAW, ED and the I-T department to work in tandem with the agriculture and consumer affairs ministries to ensure that onion prices are kept under check.
Selling the onion at loss
NAFED’s troubles, however, weren’t limited to storage.
The agency procured the onions from Maharashtra and Gujarat at an average rate of Rs 12.5/g and then sold it to the states for a mere Rs 15.5/kg. The Modi government has directed the states and other agencies to sell these onions at not more than Rs 24/kg.
“There were twin losses in procurement and selling model of NAFED, which has led to a great deal of loss to the exchequer,” a NAFED official, who did not want to be named, told ThePrint.
“While the modal rates in mandis were around Rs 10/kg, NAFED procured the onion at around Rs 12/kg. The transportation cost for onion is around Rs 5-8/kg whereas the onion was sold to states at mere Rs 15/kg,” added the official. He said NAFED has barely 60-80 MT of consumable onion left.