Apparently rattled by steep fall in prices of onions and its possible political implications in an election year, the Madhya Pradesh government has brought the crop under the ambit of "Bhavantar Bhugtan Yojana" with an aim to provide relief to farmers.
Prices of onions crashed to between 50 paise and Rs 5 per kilogram, depending on their quality, at state-run wholesale markets across Madhya Pradesh recently.
"The state government has declared the support price for onion at Rs 800 per quintal for the FY 2018-19 under the Bhavantar Yojana. This would be beneficial for farmers as far as the cultivation cost is concerned," said state horticulture department commissioner Satyanand.
Explaining the scheme, he said if traders buy onions at a rate below Rs 800 per quintal, the difference between the actual sale price and the declared price will be paid to farmers by the government.
"It is estimated that the onion crop will be less in quantity than the previous session due to a huge fall in onion prices last year, forcing farmers to turn to garlic production," the commissioner said.
According to sources, the current purchase price of different quality onions at mandis (agriculture produce marketing committees) in Indore vary between Rs 100 and Rs 600 per quintal. The prices crashed last fortnight due to arrival of more onions for sale in the mandis.
Onion purchase is currently carried out at 51 mandis in 34 districts of the state under the Bhavantar Yojana, officials said, adding that the first round of onion purchase began on May 16 and will continue till June 30.
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The second round of purchase will be held from August 1 to August 31.
The scheme was launched by Chief Minister Shivraj Singh Chouhan in October last year in the wake of simmering discontent among farmers in the state that led to protests in Mandsaur in June. These protests were followed by a farmers' agitation in BJP-ruled Rajasthan.
After the stir, the state government had purchased the crop at Rs 800 per quintal.
However, the government faced a lot of inconvenience in storing the crop and decided to include it under the Bhavantar Scheme this time.
The aim of the scheme is to primarily support farmers in case of distressed sales in the mandis which fetches them prices below the Minimum support prices (MSP).
The scheme assures that farmers will be paid the difference between the MSP and the price at which they sold the produce in the mandi called as model price. The model price will be calculated by taking the average price of the commodity in Madhya Pradesh and two other states where the crop is grown.