Onion is an essential vegetable in Indian kitchen and demand for it is price inelastic. Slight supply shock or excess output leads to variability in prices. The cultivation of onions, a significant cash crop in India, is complicated by issues like low yield, variable quality, post-harvest losses, volatile markets, and limited access to advanced tools and resources. Maharashtra produces about 40% of total onion production (31.27 million metric tonnes (MT) in 2021-22) in India. More than two-third of total production comes from Rabi crops. Maharashtra Onion prices tend to rise during the lean months of September to December due to its perishable nature and the gap between the rabi and kharif crops. 60% (2.5 million MT) of the rabi onion produce is available for storage. In 2015-16, the total onion storage capacity in Maharashtra was 1.5 million MT. Between 2016-17 to 2021-22 of 0.5 million MT scientifically built storage capacity is created in the State through differentGovernment schemes (RKVY-RAFTAAR). To create the scientifically built storage capacity, an assistance of Rs. 50 crore has been given to farmers/ Farmer Producer Organization (FPOs)/Farmers Producer Companies (FPCs) under RKVY in Maharashtra. To keep onion prices stable, Government of India has directed its agencies viz., National Agricultural Cooperative Marketing Federation (NAFED) and the National Cooperative Consumers Federation (NCCF) to maintain the buffer stock. NAFED and NCCF have been procuring onion from Maharashtra over the last few years. The Government is using the funds from the Price Stabilisation Fund (PSF) for this purpose for procuring rabi onion from farmers/ FPOs/FPCs. This intervention protects the farmers of these commodities from making distress sales in the event of a bumper crop during the peak arrival. NAFED is paying farmers directly on their bank accounts. These farmers bring their produce to the procurement centres built by FPCs. The FPCs completes the procurement of good quality (medium sized) onion and stores it in the storage structure built with subsidy received. The average investment to build the 1000 MT specialized onion storage capacity is around Rs. 1 crore. The price is determined on the daily basis based on the market rates of APMCs. The paper aims to (a) assess the impact of onion storage structures of FPCs on their performance; and (b) identify the challenges faced by farmers about onion storage structures.
Lokunde et al. (Sun,) studied this question.