Officials say, "There are a few warehouses which can properly store onions and rain has made it worse."
In Madhya Pradesh, families with ration cards will be eligible for 25 kilograms of onions for just Rs 1 per kg very soon.
In May, onion prices hit rock bottom and farmers in the state were forced to sell their produce for as low as 50 paise per kilogram to whole sellers. It was then the BJP state government came to their rescue and set up onion procurement centres across the state offering Rs 6 per kg as support price. In the month long process, state government bought 10.4 lakh quintals of onions.
Although due to rain and inadequate storage facilities, over 3.8 lakh quintals of onions worth crores have rot. The government's solution to this problem is giving away the remaining onion to people of the state at Rs 1 per kg.
Yogesh Joshi, General Manager (procurement) of Madhya Pradesh State Cooperative Marketing Federation, told NDTV, "Onions are rotting in warehouses as in Madhya Pradesh there are just a handful of warehouses which can properly store onions and the rain has made it worse. Government has decided to distribute the remaining onions through ration shops for free. We will only charge transportation cost from the consumer, i.e., Rs 1 per kg. This certainly is a loss to the exchequer of 80-90 crores."
Government says the move will mean a loss to the exchequer of 80-90 crores.
While consumers may be rejoicing, the government's decision has set into motion another set of problems for the farmers whose onion crops are ready for sale.
Vegetable vendor Suresh Raikwar says, "If government will sell onions for Rs 1 per kg our sales will go down. So we will buy less onion from wholesellers. This would in the long term mean that that farmers who presently are selling to wholesellers will have to sell their produce again at throwaway price as the demand of onion will be less than the supply."