Onion prices could have been controlled

Onions continue to bring tears to people’s eyes. The staple in most kitchens across India is currently being sold at Rs 100–262 per kilo in different states. There may be no respite from high onion prices till the new crop arrives two months hence. Maharashtra, home to the main onion markets, maybe the only state that cushioned itself partly from the price rise. This surge can be attributed to rampant hoarding, black marketing and intermediaries making easy money taking advantage of local shortages due to untimely rains and freaky weather. Out of the 23 million tonnes of onions produced in a year, three million tonnes are exported. After discarding wastage, 18 million tonnes are normally available for consumption. The Opposition parties justifiably converged to campaign against the government’s inability and delayed response on the issue, but the campaign petered out early as the government managed to shift attention to the Citizenship (Amendment) Bill.

Compulsive onion-eaters have not joined clever campaigns like ‘no onion month’, and most consumers do not belong to conservative, onion-shunning Brahmin families like Finance Minister Nirmala Sitharaman does. Hence, onion price is always a big issue for people, and it has political implications. In 1998, onion prices brought tears to the BJP’s eyes when the party was voted out of power in both Delhi and Rajasthan; one big factor in Indira Gandhi’s return to power in 1980 was the humble onion, as the Janata Party government failed to stem its price. In 2010 and 2013, the Manmohan Singh government faced crises of sorts due to onion shortages and price rise.

What’s baffling, therefore, is the Centre’s failure to manage onion prices, well knowing the sensitivities and political undercurrents. By leveraging technology, the Centre could have easily forecast weather conditions, concomitant shortages and possible price rise. These would not only have ensured that the government imposed the ban on exports in good time, but also ensured early imports of the bulb. The mismanagement over the onion issue has actually shown up larger issues of governance at the Centre and the lack of coordination with states. Economists aver that onions were a factor in the RBI pausing its interest rate cut spree as commodities inflation crossed 4%. The price stabilization committee of the Centre and the political leadership will have to take the blame for this mismanagement. Most frustrating is that the onion farmers are not benefitting from the price rise while the consumers are paying through the nose.

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