Archive · 12 Dec 2025
Onion Buffer Program Reduces Price Swings, Boosts Farmer Earnings
The Indian government has a program called the Price Stabilisation Fund (PSF) that buys onions to keep prices steady.
A recent study found that this program has helped lower the price of onions in stores by a lot and has made farmers earn more money.
The government buys about 300,000 tonnes of onions every year and sells them at lower prices.
This helps people buy onions cheaper and makes sure farmers get a good price for their onions.
The program has been successful in making the market more stable and has helped many farmers and consumers.
The PSF program has reduced retail onion price volatility by 24% and kept consumer prices 36-45% below market rates.
Farmers received 3-19% higher prices than mandi rates and were paid within three days of procurement.
The PSF has benefited 18,773 farmers directly and created 670,000 indirect beneficiaries.
Onion procurement has increased from 0.14 lakh tonnes in 2018 to 300,000 tonnes in 2025.
The program has expanded to 20 states and uses diversified distribution channels including e-commerce and mobile vans.
- Who
- Indian government and farmers
- What
- Implementation of the Price Stabilisation Fund (PSF) for onion buffer
- When
- FY24 and FY25, with data submitted in early 2025
- Where
- India, with procurement mainly from Maharashtra
- Why
- To reduce retail price volatility and improve farmer incomes
- Program
- Price Stabilisation Fund (PSF)
- Procurement Volume
- 300,000 tonnes annually
- Retail Price Reduction
- 36-45% below market rates
- Farmer Income Increase
- 3-19% higher than mandi rates
- Budget Allocation (2025-26)
- ₹4,020 crore
- Cumulative Budget (2014-25)
- ₹37,489.15 crore
- Onion Production (FY24)
- 242.12 lakh tonnes
- Direct Farmer Beneficiaries
- 18,773