The Onion Republic

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Onion prices have just breached the century mark! And doing rounds around INR 100/Kg. It is more than surprise that prices of onion, mostly widely consumed vegetable, has increased four times over the last one year! And this has happened in a country which is the largest producer of onion in the world.

With the govt. showing little concern over the issue and with opposition busy in doing rallies across the country ahead of poll season, common man is left to suffer. The festive celebrations in India largely depend on sharing home-made dishes with family members and neighbors. This Durga Puja get detested by soaring onion prices made buyers to cut short their onion requirements, lead to vanish taste from the menu. Now, on the eve of Diwali celebration this seems to repeat with rather more vehemence.

At present state of affair, while every citizen of the country understands that the price inflation is due to a few powerful people controlling the stock of onions and manipulating prices, the scenario seems to be becoming from bad to worse. This is what we call holding and cartelization. If the markets experts are to be believed, up to 80 percent of onion was under the clutches of big hoarders across the country by the end of September.

According to them the storage during 2013 has reduced marginally from 29.50 lakh tones in 2012 to 27.50 lakh tonnes this year, but the market says a different version of this severe scarcity. Illegal hoarders of Madhya Pradesh alone contribute the biggest chunk of stocks, followed by Delhi, UP and Bihar. Usually by September-end, the old stocks start drying up every year. Now it is the new harvest which may help reduce the prices.

One thing that is quite for sure, the price inflation is entirely due to holding and cartelization. There is surplus production of onions in the country - 43 lakh quintals is more than what we require. Yet the prices have gone up. Stupid policies of stopping exports yielded no results and Govt. has no control over hoarding. In 2012, there was a 4% shortfall in production, yet the prices never shot up so much.

There are a number of laws that say you can crackdown on hoarding, speculation or monopolization of the trade but the government doesn't want to do it. But with more than a week since the tag of around 100/kg, neither a single state government nor any central agency has taken the pain to conduct raids at the premises of hoarder as yet.

Poor stock facilities with the government too contribute to the encouragement of black-marketing. Last June, the National Agricultural Cooperative Marketing Federation of India (NAFED) wrote a letter to most states offering to store onions. It said it would act as a reserve and would dissuade black-marketing. The response, however, was lukewarm. Now the government has resorted to import onion from Afghanistan, Iran and other neighboring countries. Contrary to taking initiatives against hoarding and cartelization, the government seems to have surrendered before the black-marketeers.

Market experts believe that beyond a certain limit, finding stocks of onion or any other product must be seized and punitive actions must be taken. We have laws but due to the lack of political and administrative will, the implementation seems absent. The pandemonium to control prices by the government is just eyewash.


amit sinhaAmit K. Sinha is a bilingual investigative journalist who works independently. For the last couple of years he is in Patna writing for many prints and portals.

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