Onion, tomato area may be increased to stabilise prices

NEW DELHI: The government is weighing policy options to increase the area and production of onions and tomatoes in northern states to tide over supply disruptions from southern and central states, especially during the monsoon months, that cause prices of the vegetables to spike.

The consumer affairs ministry has proposed to the horticulture commissioner under the agriculture ministry that increasing production of onions and tomatoes in states such as Haryana, Uttarakhand, Rajasthan, Punjab and Uttar Pradesh be included in the Mission for Integrated Development of Horticulture, according to an official with knowledge of the matter.

This is a centrally sponsored scheme in which the Union government funds up to 60% of total costs, with state governments contributing the rest. In the case of hill states, such as Himachal Pradesh and Uttarakhand, the Centre’s share of funding is higher at 90%.

Onion prices more than doubled in many cities since August.

They have since settled at around ₹50-55 a kg in retail markets. During times of normal supply, retail prices usually range between ₹20 and ₹30 a kg.

Heavy rains during AugustSeptember in Maharashtra, the biggest onion producing state, as well in Madhya Pradesh and Karnataka, disrupted onion shipments to northern India as well as other parts of country. Unseasonal rains could have damaged nearly 30% of the onion crop in Maharashtra, said Shirish Jamdade,

an official in the state’s horticulture department.

The main summer onion crop — sown during May-June and harvested in October-November — accounts for just 15% of the country’s annual output. Yet, this crop is critical because it replenishes markets at a time when they generally run out stocks from previous harvests.

Traders who rely on stocked onions they set aside for such seasonal shortages then up prices, leading to inflationary spells.

HIGHER PRODUCTION IN NORTHERN STATES CAN EASE SUPPLY SHOCKS IN EASTERN STATES SUCH AS BIHAR, WEST BENGAL