Blockbuster bulb: Why the onion crisis hits India year after year

Given their skyrocketing prices, if vegetables could be compared with precious metals, then the onion belongs to the gold category. The blockbuster of a bulb that has consistently fetched high returns for hoarders and traders, while emptying the pockets of consumers. With the wholesale prices in the nation’s biggest onion market at Lasalgaon in Maharashtra’s Nashik district, pitched at Rs57 a kg recently, the vegetable has broken the previous record of Rs55 per kg in September 2013. The buyer in Mumbai’s local market has to now shell out Rs70, and brace himself for a steeper price, while his counterpart in Delhi is paying Rs65 — in spite of the AAP government selling onions at a highly subsidised rate of Rs30 per kg in 280 locations. The way the current situation is unfolding, retail prices could  breach the Rs100-mark before September-end, when the kharif crop enters the market.

It’s a nationwide crisis that could have been averted with foresight and planning, especially since the BJP is in power at the state and at the Centre. The party still doesn’t know its onions, even after being brought down on its knees in 1998 at the Delhi assembly elections over the vegetable’s steep price hike. 

Maharashtra, the biggest onion-producing state in the country, has been in the throes of drought and unseasonal rains for a while now. The impact on agricultural produce has been severe — a fact the incumbent state government is well aware of. Instead of waiting till the last moment — when apparently mere 50 per cent (16-18 lakh tonnes) of the stock remains in the cold storage, it could have urged the Centre to hasten the process of imports. The central government’s desperate measure to import onions from Egypt and Afghanistan — that have just entered the market — will take time to force a climb-down of prices. This is the time when hoarders go for a kill — a practice so well-entrenched that government measures to curb hoarding have seldom amounted to much. 

What is it about onions — a staple for households — and the regular bouts of scarcity? Why, in spite of production increasing exponentially, almost doubling, over the past few years, does the nation experience shortages?

And, why does the government of the day — be it the former UPA or the incumbent NDA — show chronic ineptitude in controlling the runaway price rise of such an essential commodity? Though onion exports are considerable, the seven states in India — Maharashtra, Karnataka, Madhya Pradesh, Gujarat, Bihar, Andhra Pradesh, Rajasthan, Haryana and Tamil Nadu — produce enough to cater to domestic demands. The needle of suspicion then points to the traders who control the flow of onions into the market. In early 2011, when Pranab Mukherjee, then Union finance minister, ordered an income tax raid on traders suspected to have hoarded onions, the drastic fall in prices virtually overnight was an eye-opener. Even a study conducted by the Bengaluru-based Institute for Social and Economic Change for the Commission of India and published in 2012 revealed the same picture of cartelisation and a virtual monopoly in onion trading in the mandis of Maharashtra and Karnataka. 

Unfortunately, the small and marginal farmers engaged in onion production do not reap the windfall of the price surge. They are too powerless to stand up to the syndicate of hoarders.

The onion has become a bogeyman for state and central governments, and a blessing for opposition parties. But, the tears it brings to the humble consumer is the most heart-wrenching aspect of it all.