Centre plans potato, onion buffer stock to check price rise
New Delhi, Jan 11: Fearing price rise becoming an issue during Delhi assembly polls, the Centre has decided to create a buffer stock of potato and onion to check prices in Delhi-NCR region.
The move will also help check vegetable prices during the critical months of July-November, when prices typically go up due to tight supply and adverse weather conditions for storage.
The Union Agriculture Ministry has given the task of procurement of potato and onion -- two key kitchen staples -- to a government body Small Farmers' Agribusiness Consortium (SFAC).
"SFAC has been given a revolving fund of Rs 50 crore to create a strategic buffer stock of potato and onion to discipline the Delhi-NCR market," a senior Agriculture Ministry official told PTI. Initially, SFAC will procure these two commodities to check price rise in the Delhi-NCR market and will later look at other major cities, the official said.
The Consortium will begin the procurement from next month and targets to buy 25,000 tonnes of onion and 15,000 tonnes of potato directly from farmers and Farmers Producers Organisations (FPOs).
According to the official, the SFAC will buy potato and onion during the peak arrival period and release is in the "critical months of July-November, when prices normally have risen in last many years."
Stating the Centre is intervening to curb speculative trade during a critical period of tight supply, the official said, "The challenge is to address speculation in those particular months. We will release potato and onion during this period to ensure there is enough availability at reasonable price and no speculative trade."
SFAC will hire godowns from cooperative firm NAFED for keeping onions and cold storage for potatoes. In the past, there has been a trend in Delhi-NCR when prices of onion and potato rose sharply during July-November due to tight supplies.
During 1998 Delhi assembly polls, soaring onion prices had become a sensitive issue that led to BJP's defeat. At present, retail prices of onion and potato are ruling stable in the national capital at Rs 25 per kg and Rs 10 per kg, respectively, but those of other veggies have gone up by 50 per cent.