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Onion crisis is not new

In perspective
Last Updated 04 November 2020, 02:14 IST

As onion prices have sky-rocketed to an all-time high, the Minister for Consumer Affairs Piyush Goyal announced that the country will import 25,000 tonnes of onions from Turkey, Bhutan and Afghanistan. He issued an assurance that the imported onions would arrive before Deepavali, would help curb the prices and provide succour to consumers as the ubiquitous, political vegetable continues to make daily headlines.

India is the second-largest producer of onion followed by China. We produce 230 lakh tonnes annually and the demand is 200 lakh tonnes. Economically speaking, with the fair play of market forces, the problem of such extreme price volatility should not arise.

Nevertheless, the country is witnessing the onion crisis from almost four decades. In 1979, it was Indira Gandhi who used the crisis as a political weapon to ride back to popularity and power! The NDA government has witnessed this crisis several times in the past six years.

However, political parties that used this vegetable have not bothered to address the root cause to overcome the crisis. Over the years, their knee jerk policy interventions have complicated the matter, jettisoning the interest of consumers and farmers.

This is indicative of long term failure of agricultural policy. The policy paralysis runs deep with regard to most agricultural commodities in the country, and the government enters the scene at the last minute to rein in rising prices by importing produce without any success, or at times even harms the interests of both consumers and growers.

Basic factors

Fortunately, it is the Rabi crop that meets 70% of demand in the country, whereas the Kharif crop meets 20% of demand. Seven states-- Maharashtra, Karnataka, Madhya Pradesh, Gujarat, Bihar, Telangana and Andhra Pradesh-- produce close to 80% of India’s onions.

Over the years from 2012-13 to 2018-19, there has been a 40% increase in production, from 17 million tonnes to 24 million tonnes, overall. The per capita consumption of onion has also seen an uptick over the years with a 40% increase in demand in rural areas and a 20% increase in urban areas.

The crop grown during Kharif, in hot and wet conditions, is of poorer quality and prone to fungal and bacterial disease. Bulbs are infected before storage, making it difficult to store. This year the crop was destroyed as the heavy rains and flooding broke the supply chain.

This leaves us with the Rabi crop that is of better quality and more amenable to store to meet the country-wide demand. Unfortunately, the storage capacity can handle only 20% of the produce, 30% to 40% of the produce is lost because of bad storage. We need to massively increase storage capacity to be able to handle 20 lakh tonnes of product and be able to moderate temperature and humidity in storage. Incentives of input subsidies to increase storage capacity have not yielded results. We have also failed to develop an appropriate low-cost, post-harvest and decentralised storage technology that can resolve the problem.

Rohit Patel from Dedla village, Jhabua district in Madhya Pradesh has developed a new kind of low-cost onion storage facility. The facility has the capacity to store five tonnes of onion in a 600 sqft structure using local technology of exhaust fans to maintain the required humidity and temperature. In the Sandur region, in Karnataka, farmers store the Rabi crop in low cost ‘onion houses’ for several months to reap the benefits when market prices fluctuate.

Devinder Sharma, a Food Analyst says, “at times, onion farmers receive as low a price as 30 paise per kilo and cannot recover the cost, they allow it to rot or dump it on the road. Strangely enough, there is no hysteria in the media drawing the nation’s attention to the plight of the terrible economic hardship of the farmer; it is only when the prices begin to firm up in the cities when the media begins to howl.”

Ad hoc and knee jerk measures like importing produce, imposing export bans and limiting stocks have failed to curb prices. In fact, this has led to a glut in the market, making it difficult for farmers to get better prices for their produce.

For politicians and the government, resolving the onion crisis has one objective--to provide ample supply of the produce to consumers at a reasonable price. They fail to address farmers’ distress. The average cost of production of the vegetable is Rs 8 to 10 per kg. A farmer should, at least, be able to get a decent return for his investment and labour.

Changing climate and rainfall patterns are bound to have a drastic impact on the production and supply of onions in the coming years.

It is high time that policymakers learn from the decades-long mismanagement that has resulted in a recurring crisis, move towards a workable model to avert the problem and safeguard the interests of both consumers and growers.

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(Published 03 November 2020, 19:22 IST)

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