NAFED Onion Procurement Centres to Shut Down Amid Severe Shortage and Price Disparity

The state-run National Agricultural Cooperative Marketing Federation of India Ltd (NAFED) and National Co-operative Consumers' Federation of India Ltd (NCCF) onion buying centres are facing significant challenges, leading to an early closure of 155 centres due to a severe shortage of onions. This situation is exacerbated by the increasing monopoly of private agencies and a purchasing price that is ₹500 below the market rate.

For the first time this year, farmers have largely ignored government procurement centres due to the government’s announcement of weekly prices, rather than daily prices. Ninety percent of these procurement centres are in Nashik district. Despite setting a target to buy 50,000 tonnes of onions, only 25,000 to 30,000 tons had been purchased by June 10.

The involvement of private agencies in onion procurement by NAFED and NCCF has sparked opposition from farmers, who see these agencies as a significant barrier leading to unmet procurement targets and dissatisfaction. Unlike last year’s daily price announcements, this year’s weekly pricing has made it difficult for government centres to compete with private traders, resulting in farmers preferring private buyers.

This week, NAFED's onion price is ₹2105 per quintal, while private traders offer between ₹2650 and ₹2700, creating a substantial price disparity that drives farmers away from government procurement centres. Farmers' organizations have criticized the government for allowing private agencies to monopolize the process, further aggravating the farmers' situation. Consequently, the shift to weekly pricing and the engagement of private agencies have led to a significant decline in onions procured by government centres, achieving only a fraction of their target and leaving farmers frustrated as they turn to private traders who offer better prices.