India is one of the largest producers of onion in the world second only to China, accounting for 16 percent of total area under cultivation in the world and 10 percent of total production. In India, onion is cultivated in 0.39 million hectares with production of 4.30 million tonnes per annum (FAO,1995). The current year’s (201314) production is estimated at 4.7 million tonnes. Most of the onion produced in India comes from the state of Maharashtra, Madhya Pradesh, Karnataka, Andhra Pradesh, Bihar, Gujarat and Haryana.
Lack of adequate and appropriate storage facility is one the major constraint which enforces distress sale on farmers. The present storage capacities are either inadequate or unscientific. As a result of glut situation the price variability has been too high in the recent past. To improve the situation, GOI desired to create appropriate storage structures for onion, both at farm level as well as at market places. It drew a capital subsidy programme for the infrastructure development in which NABARD has been playing a pivotal role. It has been planned to create a storage capacity of 4.5 lakh tonnes of onion during 1999-2000 and 2000-2001 through capital investment subsidy programme. Subsidy to the extent of 25% of the investment cost subject to a maximum of 500 per tonne has been proposed to be routed through NABARD for the credit delivery system.
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