Concerns rise over low procurement for onion buffer stock

New Delhi, India Jul 6, 2026 ALN: Pune: The government has bought less than 5% of the targeted 200,000 tonnes of onions for its buffer stock despite raising procurement prices five in two months to attract farmers. This situation is raising significant concerns among officials in the consumer affairs ministry, who fear that a thin buffer could leave the market vulnerable to hoarding. Such hoarding could exacerbate issues if weather-related risks impact the upcoming kharif crop, potentially triggering a surge in prices.

The slow pace of procurement has prompted officials to consider discussions aimed at expediting the buying process from the rabi harvest, which began on May 15. This move is critical to bolster supplies ahead of the festive season, a time when onion prices typically experience an uptick due to increased demand. The Centre maintains a buffer stock of onions as a strategic measure to help control prices during periods of lean supply. The size of this buffer stock, along with the procurement prices and the procurement period itself, can vary significantly depending on prevailing market conditions.

This year, onion farmers in Maharashtra have been vocal in their protests since the rabi harvest commenced in March, primarily due to the unremunerative prices they have been receiving for their crops. The situation has been particularly challenging for small farmers who lack the necessary storage capacity to hold their produce. As a result, many were compelled to sell their onions at lower prices, which did not cover their production costs. These challenges are compounded by the fact that onions are a staple in Indian cuisine, making their market dynamics critical not only for farmers but also for consumers.

In response to the outcry from farmers, the government increased the procurement price to ₹21.25 per kg on Saturday, marking the fifth increase since the procurement operations began on May 15. Additionally, the government extended the procurement deadline to July 31 from the previous June 30. This decision was made in hopes of encouraging more farmers to sell their onions to the government rather than in the open market. However, the effectiveness of this strategy remains to be seen, as many farmers are still hesitant to sell to the government when market prices are more favorable.

"The government did not start procurement when small farmers, who did not have holding capacity or the necessary storage, were forced to sell onions at subdued prices. Now, when the government wants to buy onions, the farmers do not want to sell them as they are getting higher prices in the mandis. The procurement prices offered by the government have been lower than the prevailing market prices," said Bharat Dighole, president of the Onion Farmers Association of Maharashtra.

The dynamics of onion procurement this year have been further complicated by the involvement of the Central Warehousing Corporation, which the government brought in to assist with procurement efforts. This change in strategy has also included the National Agricultural Cooperative Marketing Federation and the National Consumer Cooperative Federation. The introduction of these entities aimed to streamline the procurement process but has inadvertently led to delays, as coordination among multiple organizations can be challenging. This complexity may be contributing to the slow procurement rates, as the government grapples with aligning the interests and capabilities of these various organizations.

Market participants are increasingly concerned about the implications of low government-held onion stocks. Some traders have begun hoarding onions, anticipating that the government's reduced capacity to intervene in the market will lead to higher prices. This behavior is a classic reaction to perceived scarcity, where traders believe that lower stocks will enable them to command higher prices in the future. A trader who preferred to remain anonymous expressed concerns about the potential for price spirals if the supply situation does not improve. Such market behaviors can create a feedback loop, where rising prices lead to further hoarding, exacerbating the supply issues.

The government has acknowledged the trend of hoarding among some market participants, which adds another layer of complexity to the situation. The fear of rising prices due to hoarding, combined with the already low procurement levels, puts additional pressure on the government to act swiftly and effectively. The potential for a price spike is particularly concerning given the historical volatility of onion prices in India, which can be influenced by a variety of factors including seasonal demand, supply chain disruptions, and climatic conditions. The government must navigate these challenges carefully to avoid a crisis that could impact both farmers and consumers.

Onions are a staple in Indian cuisine and play a crucial role in the country's agricultural . They are not only a key ingredient in many dishes but also serve as an important cash crop for farmers. The fluctuations in onion prices can have widespread implications, affecting everything from household budgets to inflation rates. As such, the government's management of onion stocks is critical not just for farmers but for consumers as well. The socio- impact of onion price fluctuations is profound, as they can influence food security and stability for millions of households across the country.

The upcoming kharif season, which typically runs from June to September, is particularly significant for onion production. Farmers are preparing to plant their crops, and any adverse weather conditions could severely impact yields. The government's procurement strategy and buffer stock levels will need to be closely monitored during this period to ensure that prices remain stable and that farmers are adequately supported. The interplay between weather patterns, market dynamics, and government policies will be crucial in determining the outcomes for both production and pricing.

As the festive season approaches, the demand for onions is expected to rise, further complicating the procurement landscape. The government will need to balance the interests of consumers, who seek affordable prices, with those of farmers, who require fair compensation for their produce. The ongoing negotiations and discussions among officials will play a crucial role in determining the future of onion procurement and pricing strategies. Ensuring a stable supply during this critical period is essential for maintaining market equilibrium and preventing price spikes that could harm both consumers and producers.

In conclusion, the current situation regarding onion procurement highlights the delicate balance that the government must maintain in managing agricultural commodities. With the potential for hoarding and price volatility looming, timely and effective interventions will be essential to safeguard both farmers' livelihoods and consumer interests in the months ahead. The government's ability to navigate these challenges will be closely scrutinized, as the repercussions of its decisions will resonate throughout the agricultural sector and the broader .