State-owned MSTC Ltd would start the reverse e-auction of onions to aid Nasik farmers who have been reeling under a price crash following bumper production, an official said on Wednesday.
Mother Dairy would lend support to the endeavour by procuring 20 tonnes of onion a day, the official said.
“We have decided to support the onion farmers of Nasik. We have the technology in place to carry out an auction of agri commodities. Our officers are already there to execute a plan to offer a market to the farmers,” MSTC Chairman and Managing Director, B B Singh, said on Wednesday on the sidelines of an MSME conclave organised by the Confederation of Indian Industry (CII) here.
Reverse auction is a type of auction in which the roles of buyer and seller are reversed and the lowest price discovery is made from a base price.
Onion prices in Maharashtra’s Nasik fell below Rs 2 a kg, forcing farmers to dump the crop, while the same commodity sells for Rs 25-30 a kg in markets such as Delhi-NCR and Kolkata.
“We will commence reverse e-auction of the crop for Mother Dairy in the next 4-5 days, with a floor price of not less than Rs 6-8 a kg, which we hope to help better price realisation in the period of crisis,” he said.
The input cost for cultivation of a kilogram of onion has been fixed at Rs 8.50 by the Directorate of Onion and Garlic Research (DOGR).
Mother Dairy has assured procurement of 20 tonnes of onions daily, which would be sold through its 150-odd retail outlets in the Delhi-NCR region.
Singh said MSTC is in talks to engage more buyers, including Spencers, Reliance Fresh and other organised retailers, to create demand for the onions grown in Nasik.
However, MSTC is yet to receive any positive feedback from private retail chains in the venture, Singh said.
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