Govt may provide DBT to onion farmers for procurement

The move for direct benefit transfer (DBT) is aimed at cutting off middlemen. The government currently provides a DBT of ₹6,000 per farmer annually under PM Kisan Samman Nidhi Yojana. However, there is no data on how farmers are paid for the produce procured from them.

This comes in the backdrop of tight global supplies and a dry spell induced by the El Niño weather phenomenon prompting the union government to restrict onion exports.

This will be done through a portal of the National Agricultural Cooperative Marketing Federation of India Ltd (NAFED), which is being leveraged by the department of consumer affairs to track onion procurement, storage and disposal.

Mint, quoting government officials, had earlier reported that the Centre was planning to launch a NAFED portal dedicated to keeping track of the procurement, sales and stocks of onions and intervening in the market when required.

“About 80% of onion operations is farmers’ payment, which moves through NAFED and other agencies. It then goes to the federation and is released to farmers. NAFED has proposed that the ministry must offer farmers the opportunity to open one account on the onion portal which is now with DoCA (department of consumer affairs) and DBT to farmers through the portal itself as soon as farmers' stock is taken in," the official said.

“Additionally, transportation is about 10% of the dispatch job. In this regard, the suggestion is to do a GPS-based or actual physical-based tracking of the truck. The issue of whether the truck is loaded or not, or if it is loaded and then diverted to another destination, cannot be known. With the integration plan, this will be in sync with the portal, from loading to unloading so that no one can say onion did not arrive.

Thirdly, the pricing system could be integrated under the price stabilization fund (PSF). You tell them where to make dispatches based on the price which is on the portal. As soon as prices go down, they stop dispatches. It becomes an automated and modulated system where the trigger, the trigger to dispatch and the trigger to stop is on the portal so that it does not become a politically driven thing," the official added.

Queries sent to the consumer affairs department remained unanswered at press time.

Regarding the operational cost, the official said that the corpus for the DBT operation will depend on prices. Last year, the average procurement price for the first and second phases was about ₹17 a kg starting from ₹11-12. This year, the starting price is ₹17-18 per kg, which may go up to ₹25 as procurement picks up pace. 80% is this price. The cost to DoCA will be this price (80%, the loss that we end up making finally selling it, transportation and storage handling cost).

The government has started early procurement of rabi onion this year against typically done from June to build buffer stock and support farmers from price crash amid an export ban in place. It aims to procure 500,000 tonnes of onion in the 2024-25 rabi season.

As per the official, rabi onion procurement has not picked up pace yet but is likely to peak in 10-15 days.