245 per cent rise!

Onion prices have hovered in the range of Rs 50-60 in the country and in some places touched Rs 80 in the last few weeks. All food and vegetable prices have increased taking food inflation to higher and higher levels but the onion prices have run ahead of all others.

They have risen 245 per cent in one year and the recent spurt has especially hurt consumers as onions are a kitchen staple for both the rich and the poor, vegetarians and non-vegetarians. After signs of softening about two weeks ago they have again hardened and may go still higher. The government has been claiming that the prices would be brought down but none of the measures it announced has had much impact on the persistent rise in prices.

Crop losses due to excessive rains in main onion-producing states like Maharashtra was the ostensible reason but it was the lack of anticipation and poor management of the situation by the government that has led to the present crisis. It imposed some restrictions on export  and imported some quantities of onions last month but these should have been done much earlier. No major effort was made by even Nafed  to import enough quantities of onions. The real problem was and continues to be the hoarding of onions by middlemen and traders. This is clear from the fact that onions were bought from the farmers  immediately when the crop came to the market at the normal price of Rs 8 a kg and are now being sold at the current exorbitantly high prices.

The Central government has now told the states to take severe action against hoarders and blackmarketeers. The food minister has  repeated his claim that the prices will come down in the next two weeks when fresh supplies arrive in the market. Sharad Pawar has washed his hands off saying that he is a Union minister and not onion minister, though his closeness to powerful onion trade lobby is no secret. Kapil Sibal says the government doesn’t sell onions. Such crass statements show how disconnected the government is from the people’s woes. Both farmers and consumers are the sufferers, while the hoarders are making a killing. The government will have to pay a heavy price if it is unable to bring the prices down and make them affordable for the common people. Onions have proved their political power in the past and can do so again.