Government Revises Onion Buffer Stock Strategy for 2026
The Union government has announced a strategic adjustment in its onion procurement plan for the upcoming season, setting a target of two lakh tonnes to be acquired through its key agencies. This procurement initiative, spearheaded by the National Agricultural Cooperative Marketing Federation of India Ltd (Nafed) and the National Cooperatives' Consumers Federation of India (NCCF), is scheduled to commence in the first week of May and unfold over the next few months.
Reduced Target Reflects Market Stability
In a notable shift from previous years, the central government has decided to procure 33% fewer onions compared to the last financial year. During 2025-26, the Centre successfully procured three lakh tonnes of summer onions, with Nafed and NCCF each contributing one lakh tonnes. This year, however, the target has been scaled back to two lakh tonnes, with each agency tasked with procuring one lakh tonne.
Sources within the central agencies have indicated that this reduction is primarily due to a decline in wholesale onion prices at Agriculture Produce Market Committees (APMCs). Currently, the average wholesale price for summer onions ranges between Rs 1,100 and Rs 1,250 per quintal. Market analysts suggest that prices may drop further due to diminished demand from international markets, alleviating concerns over onion scarcity this year.
Buffer Stock Initiative to Stabilize Prices
The Centre has been actively creating a buffer stock of onions for several years as a measure to stabilize volatile wholesale prices and address potential shortages that typically arise between August and September. This proactive approach aims to ensure a steady supply and prevent price spikes during critical periods.
An official from NCCF elaborated on the procurement methodology, stating, "This year, the Centre has instructed both central agencies to procure onions through primary cooperative societies, cooperative institutes, and cooperative market federations. These entities are expected to procure onions directly from farmers at the Agriculture Produce Market Committees."
To facilitate this process, NCCF will issue a tender within the next three days to engage primary cooperative societies, institutes, and market federations in the procurement efforts. All procurement activities will be conducted under the Price Stability Funds (PSF), a framework designed to support price stabilization initiatives.
Geographic Focus on Nashik District
The procurement drive will have a significant geographic concentration, with approximately 80% of the onions slated to be procured from Nashik district alone. The remaining 20% will be sourced from other onion-growing regions across the state, ensuring a broad-based approach to buffer stock creation.
This targeted strategy underscores the government's commitment to leveraging key agricultural hubs while maintaining flexibility to address regional variations in onion production and market dynamics.
