Discuss the institutional mechanism for market intervention in perishable agricultural commodities in India, citing recent examples.

Perishables like onion, potato and tomato cannot be stored under the FCI-style foodgrain model, so India relies on a distinct architecture built around the Price Stabilisation Fund (PSF), introduced in 2014-15 to shield consumers from volatility while assuring farmers a remunerative price [1].

Institutional architecture

• Nodal body: the Department of Consumer Affairs operates the PSF corpus, deciding the size, timing and destination of intervention on the basis of daily retail and wholesale price monitoring [1].
• Implementing arms: NAFED and NCCF procure directly from farmers; Kendriya Bhandar and State cooperatives handle retail disposal [2].
• Trade-policy wing: the DGFT/Ministry of Commerce calibrates export duty and Minimum Export Price (MEP), converting trade policy into a domestic price instrument [3].

Instrument 1 — Buffer stocking and calibrated release

• Against 3 lakh tonnes procured in 2022-23, 4.7 lakh tonnes of onion were built up from the Rabi crop, against a directive to NAFED and NCCF to procure 5 lakh tonnes directly from farmers [4].
• Release is targeted, not blanket: mobile vans sold subsidised onion at Rs 35/kg in deficit urban markets during the 2024 price spike [5].

Instrument 2 — Trade calibration

• A 40% export duty (August 2023) was escalated to an MEP of USD 800/MT [3], and then to outright prohibition from 8 December 2023 to 31 March 2024 [6].
• As supply recovered, the ban was lifted with a reduced MEP of USD 550/MT, and 2.60 lakh tonnes were exported in 2024-25 up to July 2024 [7]; the residual duty was withdrawn from 1 April 2025 to restore farmer realisation [8].

Limitations

• Frequent policy reversals reduce predictability for farmers and exporters, and high perishability caps how long buffers can be held.

The mechanism has matured from ad hoc procurement into a two-lever, cooperative-driven system balancing both stakeholders. Predictable, rule-based triggers, wider use of Operation Greens value-addition and cold-chain infrastructure would make intervention structural rather than reactive — advancing the constitutional promise of farmer welfare and SDG-2.