Be it a shortage or a bumper yield, the Govt ought to work on price stabilisation rather than resort to knee-jerk reactions
Onions have always had huge political implications. During the 1980 elections, their sky-high prices helped former Prime Minister Indira Gandhi dislodge a coalition Government as her slogan, “a Government that cannot control prices has no business to rule,” became a part of electoral rhetoric ever since. In 1998, a sharp spiral led to the fall of the BJP Government in New Delhi as it became a measure of economic well-being and symptomatic of a bigger food inflation. And now with a spike in prices of the bulb, caused by low output as yields were washed out during the recent floods, the BJP certainly doesn’t want to anger people in a pandemic-hit country in general and poll-bound Bihar in particular. That, too, when it is under fire because of the farm Acts and had to go back on the newly-amended Essential Commodities Act, 1955 — which freed onion from stock limits — compelling it to invoke special provisions to ration it once again. Now, as per the Central Government’s order, retailers won’t be allowed to hold more than two tonnes of onions, while for wholesalers this will be 25 tonnes till December. Onion prices in Chennai have jumped by over 107 per cent this month while Mumbai and Kolkata have seen a spike of over 40 per cent. And in Delhi-NCR, they have shot up to Rs 70 plus per kg despite the lean demand in the Navratra week. The reason for this sharp escalation was the unseasonal rain in Maharashtra and Karnataka, which damaged the onion crops and affected supply to mandis across the country. Although the rabi crop is drier, the kharif one is more prone to retaining moisture, resulting in poor yields. To add to the Government’s woes, the heavy rain in September not only destroyed the new crop in Karnataka but also took a toll on stored onions in Madhya Pradesh and Gujarat. Even Maharashtra farmers suffered more than their usual share of storage losses, by 60 per cent compared to the normal 30-40 per cent. Stopping exports has not helped and though the Government is importing varieties from Iran and Turkey, price stabilisation won’t be possible without a new crop from Alwar and Palwal. On a yearly basis, India consumes around 160 lakh tonnes of the kitchen staple with Maharashtra, itself a major onion producer, using up around 4,000-6,000 tonnes per day. Worse, farmers have barely been able to spare enough bulbs for flowering and are, therefore, running low on onion seeds for the next sowing season.
We are the second-largest producer of onions after China, yet a rained out or a crisis year means that we are forced to import the bulb from the very nations we export it to and at prices higher than what we sell to them. Clearly, we need a policy fix for this instead of debating alternatives like the virtues of an onion-less diet or varied food cultures. The pungency of the bulb has hit home many times in the past. Last year, prices in December had shot up to Rs 165 a kg in some parts of the country, the highest in recent years. Export cuts then had affected our foreign relations with friendly neighbours like Bangladesh. While the amended Essential Commodities Act takes care of a bumper yield by freeing up pick-up limits, there is still no solution to the problem of shortages and distributors making money by hoarding. Why can’t India increase the acreage under onion cultivation? Experts have suggested promoting onion cultivation in states like Uttar Pradesh and popularising onion production in the kharif season as well. We need to find out why despite technology-aided solutions, our onion has the lowest yield in the world, lesser than that of the US, which does not even fall under the top 10 onion-producing nations. China cultivates onion in land that’s half of ours but is the largest producer because its yield is double. Of course, we need better irrigation facilities but fighting seasonal extremes of weather means we have to work on the onion’s shelf life as well. We need to minimise post-harvest loss of a highly perishable crop with improved preservation facilities. Why can’t we, for example, promote modern cold storage facilities in newer onion-producing States like Madhya Pradesh? Around 30-40 per cent of the crop is lost due to lack of storage facilities. If there are onion dehydrating and processing units across the country, then the supply-demand mismatch can at least be corrected. The Government can break the handful of trading cartels that pocket a major share of business in big markets like Maharashtra and Karnataka. The new Acts may not change that in favour of farmers greatly as their land holdings are too small to afford them the cushion to take a price risk. When it comes to onions, the Government is not short of well-intended suggestions and advice. But now it is time for it to work out a robust policy that holds throughout the year instead of resorting to last moment fire-fighting. Now the Opposition has found another reason to target the Government in a throwback to the comment made by Union Finance Minister Nirmala Sitharaman last winter session that she didn’t have onions. That time the Congress had wondered if she had avocados instead. Let not the onion become such a costly proposition. Reports say that Mexico’s criminal gangs are now heavily into avocado production and sales, with cartels demanding protection payments for farms. Rival gangs are reported to have targetted each other in deadly shootouts like any other case of drug violence. We don’t want our appetite for onions to become so consuming that the crop generates an extortion economy too.
Monday, 26 October 2020 | Pioneer