Govt sets 72% cost recovery rate for onion purchases; PVT firms' participation in checking decaying stocks, steep price | Mint

New -Delhi: The government set a ‘cost recovery rate’ of 72% for onion purchases this year, said two people involved directly in the process, while the center moves to report private firms for the acquisition, storage and transport of the kitchen stack foods. This recovery rate is 7 percentage points higher than last year’s 65% for Rabi. Cost recovery is the amount of good quality onions that remain good quality after storage and handling. A 72% rate means that out of every 100 kg of onions obtained, 72 kg must remain marketable after their losses were due to rot, germination or shrinkage during storage. Traders often call a poor quality onion, which is a very perishable vegetable, to try to rise prices. The new cost recovery rate addresses the problem. Buffer stock strategy The determination is part of a broader acquisition contract that also includes diverse payments to private firms under the procurement drive, which aims to build a buffer of about 500,000 tonnes of onions. The center will soon release a list of private processes. It is part of the center’s buffer stocking strategy, implemented by agencies such as the National Agricultural Cooperative Marketing Federation (NAFED) and National Cooperative Consumers’ Federation (NCCF), to stabilize retail prices and prevent sudden spines. “The 72% cost recovery rate has been completed by the top level, and it will be effective in this procurement year,” the first of the two people mentioned above. “A higher recovery rate leads to a better availability of onions during times of crisis, enabling more effective market intervention and helps control prices when escalating. It also reflects more efficient operations and lower procurement costs for the government,” the person said. “Better cost recovery also sends a strong message to traders, which discourages them from utilizing the market and earning excessive profits during times of crisis.” This time, the government has included accidental spending for private players that will be selected for the acquisition and storage of onions, with the aim of making the system more efficient and transparent. “They were asked to quote a tariff that covers the costs associated with lifting the crop of the field to the storage point, to the stage where the commodity was loaded for transport to the point of sale during a crisis – typically around August and September, when prices tend to rise,” the second person said. “It will also be completed soon, and purchases will start within the next few days,” the person added. This rate will include transport from farm to storage, loose, handling, labor costs and final loading for shipping – to ensure that the onions are properly managed and prepared for the market or further distribution. However, farmers believe that a higher recovery rate will be directly on them. “It will not affect us. Whether the recovery rate is 65% or 72%, it is the private players and farmer producers’ organizations (FPOs) that will have to manage the risk purchases. Grade 1 will be sold from now on £ 2,000 per quintal, while onions of slightly lower quality between £ 1,500 and £ 1,800 per quintal in local Mandis, Vicharanchi ‘, a farming group on social media, managed. 4.83% in April 2024. The last time it was this layer was 3.15% in July 2019. Food inflation in April was 1.78%, lower than 2.69% in the previous month and 8.7% in the previous month, the NSO data showed. Kg recorded a year ago. UI is harvested in three seasons – Rabi (March – May), Kharif (September – November) and late Kharif (January – February). Ahmednagar, which accounts for about 94.68% of the state’s total area under onion cultivation Belgaum, Bijapur, Bagalkot, Gulbarga, Dharwad and Bidar in Karnataka, are large onion-growing regions in Karnataka. tonnes on September 13, 2024 and halve the 40% export tax on onion shipping.