In a major move to ensure price stability and protect consumers from seasonal onion price shocks, the central government has already procured over 1.07 lakh tonnes of onions under its Price Stabilization Fund (PSF) initiative. This is part of a larger effort to build a robust buffer stock of 3 lakh tonnes for 2025–26.
The procurement is being carried out by two key central agencies Nafed (National Agricultural Cooperative Marketing Federation of India) and NCCF (National Cooperative Consumers’ Federation of India). Both agencies are working with farmers and traders to buy onions directly from major producing regions at competitive rates.
Maharashtra Leads the Supply
According to official data, Maharashtra alone has contributed 1.06 lakh tonnes, accounting for nearly the entire stock procured so far. The procurement drive is centered around Nashik, Ahmednagar, and Pune India’s leading onion-growing belts.
Officials from the Ministry of Consumer Affairs confirmed that procurement is ongoing and will continue until the targeted volume is achieved. “We’re on track to create a robust buffer to prevent any undue price rise in the coming festive season,” a senior official said.
Inflation Under Control
This strategic intervention has already started showing results. The Wholesale Price Index (WPI) for onions fell to 185.7 in June 2025, compared to a steep 279.2 in June 2024, reflecting a 33.5% decline year-on-year. Retail onion prices have remained stable across most urban centers despite supply fluctuations due to recent heat waves and crop stress.
Buffer Stock to Be Used for Market Intervention
The procured onions will be stored in scientifically maintained warehouses and gradually released into the open market if prices begin to rise abnormally. This helps balance demand and supply during lean months, typically between August and November, when fresh arrivals are low.
The buffer stock mechanism is part of a broader government strategy to shield consumers from food inflation while supporting farmers with assured procurement during harvest peaks.
Farmers Benefit from Assured Procurement
Experts say the scheme not only helps consumers but also supports farmers by offering them fair prices at harvest time, especially when market prices fall due to oversupply. Farmers’ cooperatives and aggregators have welcomed the move, saying it reduces distress selling and ensures stable returns.
Looking Ahead
With over 1 lakh tonnes already procured and more being added, the government appears well-prepared to tackle any volatility in onion prices this year. If implemented effectively, the buffer stock strategy could serve as a model for other perishable commodities.
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