Onion prices bad news for consumers

Rising food and vegetable prices have remained the bug bear of the UPA-II government ever since it took office in the summer of 2009.

First, it was food inflation that was bad news for the ‘aam aadmi’, the ostensible object of concern of the ruling coalition, especially the Congress.

Then it was sugar prices that hurt the people before it could be brought under control. Right now, it the high prices of onion that are bringing tears to the eyes of the consumers more than the onion itself.

Onion prices have touched Rs70/kg, sending family budgets haywire and forcing restaurants to stop offering onions as a free side dish.

Vendors have warned that onion prices might well touch Rs100 in the coming days. A panicky government has banned onion exports in a desperate attempt to bring prices down and is also pinning its hope on the January harvest to ease the present shortage.

Pundits know that rising prices have massive political consequences. Many still remember the Congress victory over the BJP in Rajasthan, Madhya Pradesh, and Delhi in late 1998 after onion prices soared and the then BJP-led government at the Centre was held responsible for it.

While inflation remains untamed, government decisions have only worsened the situation. For instance, did it have to wait till onions touched the present high to announce temporary curbs on exports? The announcement could have been made days, if not weeks, ago, and would have had an inhibitory effect on hoarders, who’d have been forced to release their stocks in the markets.

Moreover, government could have considered importing onions to beef up the supply. If the aim is to protect farmers on the verge of harvest, it certainly is laudable, but it looks more like a policy to help traders and hoarders profit from the high prices.

This had happened in the case of sugar before Diwali, when prices only dropped after government warned that imports would be allowed. We need a clearer policy on import and export of food items to ensure stable prices.