In a relief to the distressed onion growers in Maharashtra, the Fadnavis government on Thursday decided to provide ₹2 per kg subsidy on the bulbs sold from November 1 till December 15 in the State.

About three lakh farmers stand to gain up to ₹40,000 from this decision by the State government.

The money, which will be paid in the form of ex-gratia amount, will cost ₹150 crore to the State treasury. The plan of providing the subsidy was put forth by Co-operation Minister Subash Deshmukh, which was accepted by the State Cabinet.

Slack demand

Anoop Kumar, Principal Secretary (Agriculture Marketing), told BusinessLine that the disbursal of money will start almost immediately.

The prices of onions, which were ruling firm till October, started to fall in November due to oversupply and lack of demand from other States.

Other onion growing States such as Madhya Pradesh and Karnataka also had a good onion crop, which led to lower demand from Maharashtra, he said.

Maharashtra is one of the largest growers of onions in the country with an export share of about 80 per cent. Kumar said farmers who have sold their goods in markets across States which are controlled by the Agriculture Produce Market Committee (APMC) will get the subsidy. However, APMC Mumbai market is omitted as the onions sold in this market are by traders and not farmers.

Cap on subsidy

The compensation will be capped at 200 quintals so as to ensure that there is an equitable distribution of subsidy.

Kumar pointed out that a similar subsidy was also provided to the onion farmers in April 2017.

But at that time ₹1/kg incentive was provided, which cost ₹43 crore to the State government. He added that due to excess supplies of the kitchen staple during November and December, the prices of stored onions — harvested in March/April — had reached as low as ₹2.5-3.5 per kg.

Related Topics