The spectre of onion prices appear stabilised at Rs.35/- a kg, while the retail outlets are non-committal about the consistency, the pungency might be showing yet again. A raging debate not only for consumers, but economists and policy makers as well, the vegetable is routinely consumed and any spike tends to be politically sensitive. Last year, a truck was hijacked on the Delhi-Jaipur highway. The precious cargo was 40 tonnes of onions. A few eat-outs, last year, suspended serving “onion dosas”. The North Indian kebabs without the raw onion will lose its pride. In rural India, a bowl of rice and onion is used as an indicator of poverty. The public anger over food inflation, if not controlled, can spoil the honeymoon period of the new government, which is empowered and has secured mandate.
With a bumper crop 19 m tonnes , a 14 per cent increase over
the previous year, already reported, it defies logic for the price to rise,
whereas the consumption is about 15 m
tonnes. The toils of the farmers are gone astray
while the ultimate consumers are bearing high costs, distinctly depicting the
lack of magnitude afforded to agriculture in recent times. Indications are that
onion price will surge by September as the stocks are expected to be exhausted
by then, the delay in SW monsoon notwithstanding. The consumers’ owes soar with the dawn of
the rainy season and the intermediaries and hoarders silently encash the
opportunities. Short-term solutions like
importing the vegetable and curbing the exports only does more long-term
damages.
Onion growers have also claimed that they are pained by the
non-availability of quality seeds.
According to National Co-operative Agricultural Marketing Federation
(NAFED), “onion seeds are currently costing Rs.3,000/- a kg. as against
Rs.400/- during normal times”. India
is one of the largest onion producers along with US and China.
Last year, the erstwhile Agriculture Minister Sharad Pawar asked the Chief Ministers to invoke the Essential Commodities Act against onion hoarders. Finance Minister Arun Jaitley has recently blamed the hoarders and asked the state governments to act, while Modi asked the people to “be ready to swallow bitter pills”. Read in tangency, not only likely it is to see the hoarders’ role in the price crisis of the edible bulb, but asking the common man to be prepared for a spurt. The price has been rising across the country, especially in Modi’s town Ahmedabad, where it recently touched Rs.56/- a kg.
The high price of the vegetable has given the opposition parties an agenda. Isn’t it minimal that controlling the middle-men can improve the supply chain considerably? According to National Horticulture and Research Foundation, the “price has gone up and it may increase further”.The government must procure directly from the farmer at a fair price, enable modern storage facilities to regulate flow into the market and make it unremunerative for the middlemen.
Traders operating in the local market committees stock the onions, which they procured from the farmer for a paltry price less than Rs.10/- a kg. and stored it, which has a shelf life of upto six months. The hoarders and big traders have got the taste of blood last year which forced onion prices to dictate Rs.100/- and above. It is hoped the big daddies are not resorting to American policy of dumping the produce into the sea and jack up the prices.
Need for more than quick-fix solutions
Reform of procurement practices and agricultural marketing is overdue. Being a State subject, the Centre even a decade ago circulated amendments to Agricultural Produce Marketing Committee Act. The main amendment targeted at minimising the wholesale dominance in the marketing chain. High onion price has been a key factor for the ugly food inflation. Retail inflation quickened to 8.59 per cent in April from 8.31 per cent in March, primarily driven by food prices. At the moment, RBI is more worried about tackling inflation, which is necessary for sustaining economic growth in the long-term, while the central bank at the same time would need some clarity on how the monsoon will pan out and the impending union budget. Lower rainfall may pinch farm output and spur inflation. Modi, who steered the BJP to a thumping victory in the last three decades, has induced the optimism that he will take measures to boost economic growth.
The returns of the farmer and cost to the end-user shows a yawning-gap and thus the enormous returns in the supply chain of agri-produce are usurped by the intermediary forces. Probably the sapping phenomenon is also a reason for the youth being averse to pursue farming. Among the host of interventions required to induce vibrancy in the sector, reforms in the APMC are paramount that will ensure remunerative price to the primary producer and eliminate the other villainous forces, which can be in any form – bad crops, market forces, over-export or hoarders. At times, it takes the form of nationwide transport when essential goods are not available and price rise. That the economy’s health is at stake, will Modi be able to crack the whip? The speculation that onion hitting the three-digit mark by September might lead to further hoarding. And it sounds vulgar. The government should thoughtfully consider take-over of all onion warehouses and start selling through Public Distribution System.
Onion is said to be good for heart, but the unfriendly price movement is not conducive to the organ that pumps blood and continue its business as usual. The existing monopolistic control of APMC must be dismantled. Is it a rocketry for farmers to build storage sheds?
The Centre should come up with more than quick-fix solutions,
else the parties may have to pay a political price. The 1998-Delhi Assembly election debacle for
BJP is attributed to the rising price of “onion” factor. Maharashtra, the main hub for growing onions,
must pro-actively show urgency in tackling the hoarders and where the stocks
are piled up. There is no gainsaying the
fact that most of the 300-odd local market committees that control the price of
onions in Nasik district of Maharashtra are henpecked by politicians. Also, this could be a harbinger of the
Congress fall, if the Centre exhibits the political will to control the surge
in onion price.Export curbs on onions would have little impact on the prices of
the commodity, as the price of Indian onion is more than local price abroad. Onion can be a game-changer.
for its default …like 1998 falter…!!! First and foremost the government should remove the bare essential commodities like the onions, aalu and other essential, daily staple food of the ‘Aam Aadmi” from the Export List. The onions were the least kind of luxurious vegetable available aplenty to the common man till the advent of middle-men, a kind of authorized loan sharks, hunting for the ever needy farmer. The poor and hunger struck farmer had no other go but to accept the paltry amount to sustain his family and to get a yield in his field which yield in total was ‘gifted’ to the middle men “Shylocks” who lent the amount . A pittance of an amount was doled out by these middle men as “cooly” to the already “half naked fakir” of a farmer. Once again the farmer is back to square one and his trudge to the field starts with a tear in his eyes, while the middle-men who fleeced him goes laughing all the way to the bank…his ears filled with the tearful music of the farmer!!
ReplyDeleteBumper crops of onions are always there because onions are a kind of vegetation like the cactus which can survive in any kind of, for or against weather/ climactic conditions whereas its price stability cannot survive the onslaught of the middle-men’s temperament.
Cutting across party lines no law maker worth his salt is fit enough to raise this ‘tearful’ issue in the Parliament nor in the Legislative Assembly as he/she will or shall be torn apart by the interested few who were the sponsors for their entrance into the precincts.
The only recourse available to the government at the moment is:
1. The government first and foremost should erect modern and latest storage go downs in each and every district of a state.
2. The government must procure directly from the farmer through its directly appointed authorities.
3. Authorized Middlemen/agencies to be discontinued.
4. Hoarders to be sought by the Law enforcing authorities and brought to book.
5. The government and its machinery should directly procure the vegetables from the farmer and store it , distribute it through its own machinery, instead of sub letting it to the inter-me diaries
6. Or as the author of the above article suggests, “The government should thoughtfully consider take-over of all onion warehouses and start selling through Public Distribution System.
‘’Onions’’, as the author has proclaimed is supposedly good for heart…but then the word ‘onion’ gives a raise in B.P. to the ordinary householder as it is too high for the ordinary Tom, Dick and Harry.
CONGRESS Fell because of its arrogant attitude…the present government which has been elevated to the position of “Rulers”.. is yet to cater to the common man…”Aam Aadmi”!
The ‘’Onion” and its rising prices unworthy and unbecoming may lead to an unsavory situation to the government…pay the ‘’price’’for its default …like 1998 falter.