India: Govt limits onion procurement to A-grade amid quality, transparency concerns over earlier purchases

• Industry alleges substandard onions purchased at A-grade prices
• A-grade onions to be procured at revised MSP of INR 2,335/quintal

The Indian central government has discontinued procurement of URS (relaxed-specification) onions from 30 July, limiting procurement under the Price Stabilisation Fund (PSF) to only A-grade onions at the revised Minimum Support Price (MSP) of INR 2,335 per quintal. The policy shift has triggered concerns over procurement carried out during the preceding two weeks, with industry stakeholders alleging that substandard onions were purchased at A-grade prices under the URS category.

Procurement under scrutiny after policy shift

The Centre had tasked NAFED (National Agricultural Cooperative Marketing Federation of India Ltd.) and NCCF (National Cooperative Consumers’ Federation of India Ltd.) with procuring 200,000 t of onions in Maharashtra from 25 May under the PSF to strengthen buffer stocks and support farmers. During the procurement drive, both agencies purchased A-grade as well as URS-grade onions, which include smaller-sized and slightly blemished produce.

However, following the decision to halt URS procurement from 30 July, procurement has been restricted exclusively to A-grade onions. The move has raised questions within the trade, with allegations that a significant quantity of lower-quality onions was procured at A-grade prices before the revised norms came into effect. Industry participants have also questioned whether part of the reported procurement existed only on paper, raising concerns over the transparency of the procurement process.

Industry seeks disclosure of procurement records

Farmer groups and market participants have demanded that the government disclose procurement details for the previous 15 days, including quantities purchased, farmer-wise procurement records, grade-wise pricing, and storage locations. They have also raised concerns that procurement norms were changed midway through the programme, while alleging that inferior-quality onions sourced from outside the state may have entered the procurement system.

The industry has called for an independent inquiry into procurement undertaken by NAFED (National Agricultural Cooperative Marketing Federation of India Ltd.) and NCCF (National Cooperative Consumers’ Federation of India Ltd.) to verify the actual quantity procured from farmers and examine whether procurement complied with the prescribed quality standards.

Outlook

The allegations surrounding onion procurement are likely to keep the government’s procurement operations under close scrutiny in the near term. Greater transparency in procurement records and clarity on quality compliance will be crucial for maintaining farmer confidence, while the shift to A-grade-only procurement may tighten eligibility for growers supplying onions under the government procurement programme.