Govt sets 72% cost recovery rate for onion procurement

The government has fixed a 72% 'cost recovery rate' for onion procurement this year, said two people directly involved in the process, as the Centre moves to sign up private firms for the procurement, storage and transportation of the kitchen staple.

- Dhirendra Kumar

This recovery rate is 7 percentage points higher than last year's 65% for rabi onion.

Cost recovery is the quantity of good-quality onions that remains fit for sale after storage and handling. A 72% rate means that out of every 100 kg of onions procured, 72 kg must remain marketable after accounting for losses due to rotting, sprouting, or shrinkage during storage.

Traders often cite allegedly poor quality of onions, which is a highly perishable vegetable, in order to try and hike prices. The new cost recovery rate addresses that issue.