While we have learnt many lessons from waves of crisis, the Govt has hardly implemented them on the ground
It is ironical that India experiences spikes in onion prices nearly every third year despite impressive growth in the production of the bulb, which has gone up from below 5.5 million tonnes in 2003 to above 19 million tonnes in recent years. This time around, the spike is being attributed to uneven distribution and supply in wholesale markets and floods in major supplier States of Maharashtra, Karnataka and Madhya Pradesh. Of course, storage and maintenance of buffer stocks have improved and there is enough supply of stored onions of the previous year’s crop. However, in the absence of an evenly distributed and uniform warehousing network, transportation has been affected like no other. Rising onion prices are, therefore, politically explosive for the ruling BJP, which is eyeing a return in State elections.
A worried Centre has responded with copybook measures. It has a buffer stock of 56,000 tonnes of which 16,000 tonnes have been offloaded through agencies like NAFED and NCCF. Imports are arriving from Afghanistan and Egypt. It has discouraged exports and is cracking down on black marketeers. But is this desperate fire-fighting enough? Why can’t India increase the acreage under onion cultivation? NITI Aayog member and eminent economist Ramesh Chand had suggested promoting onion cultivation in States like Uttar Pradesh and popularising it in the kharif season as well. Why can’t we promote modern cold storage facilities in States like Madhya Pradesh, which has emerged as a big onion-producer after Maharashtra and Karnataka? To keep stocks healthy, we need dehydrating units across the country, set up processing plants so that the crop has a longer shelf life and, therefore, correct the demand-supply mismatch. A whole host of allied products can keep the demand sustainable among large consumers like restaurants, hotels, fast food chains, the Army, hospitals and so on. Besides, we should look at a trade policy for price stabilisation. The Government must immediately break the handful of cartels that pocket a major share of trade in big markets like Maharashtra and Karnataka and set up Agriculture Produce Market Committees (APMCs), just as was suggested by the Bengaluru-based Institute for Social and Economic Change (ISEC). When it comes to onions, the Government is not short of well-intended suggestions, advice and reason. Isn’t it time it started acting on some of them?