Onion's teary tales
Price of onions rise to Rs.70 per kg…
The ever rising price of onions and other vegetables since the last few weeks
is adversely affecting our economy and is also a matter of grave concern for the ruling government at the central level!A figure released by Ministry of Commerce and Industry reveals that wholesale price index for food climbed 2.3 per cent in the first week of December, and inflation ascended y-o-y from 9.46 per cent last December to 12.43 per cent this year. Interestingly, a decent monsoon this year could not provide the silver lining, as untimely rainfall in Maharashtra and Gujarat (major producers of onions) destroyed the crops to a large extent. Hoarding of crops by the big traders also contributed to
this trouble.
Onions and a few other vegetables make up the staple diet for India’s poor and just above poverty line citizens (a massive 700 million plus segment that survives on less than $2 a day) – they exercise huge political clout, being the biggest demographic segment. The staple food prices are more important to them than economic growth! To influence this segment, political parties are always on the lookout and forever ready to hold demonstrations across the country. The Left has been particularly vocal against the UPA (more so because of impending state assembly election in West Bengal) and has frequently protested against the rising prices. BJP too is not leaving any quarters untouched in its vicious attack against the UPA regime.
To neutralise this onslaught, the UPA government is resorting to desperate measures. The exports of onion has been banned, and for those who have already been issued ‘no objection certificates’, the National Agricultural Cooperative Marketing Federation (NAFED) has been instructed to augment the minimum price of export from $525 per ton to $1,200 per ton. In Delhi, NAFED and National Consumer Cooperative Federation (NCCF) has regulated the price of onions between Rs.35 to Rs.40 per kg, hitherto hovering at Rs.70 to Rs.80 per kg.
The minimum wage for unskilled workers is Rs 100 a day – the same goes for their rural counterparts under NREGA – and these are the people who are struggling to make both ends meet. A radical and structural solution is the order of the day… and not a quick fix one… The incumbent government might otherwise have to pay a heavy political price. If the government is imagining that consumers will simply choose other cheaper vegetables and forget onion consumption, they have two issues. One, other vegetable prices are also rising. Two, onions are election critical.
India, with 40 lakh tonnes of onion consumption, is the second largest producer after China. And this costly vegetable is the hotbed for political battles, which is almost a decadal phenomenon. Janata Party in the early eighties lost the Lok Sabha election to Indira Gandhi’s Congress (I) because of expensive onions in northern India. Sushma Swaraj in 1998 lost the Chief Minister’s chair of Delhi because of spiralling prices of onions that rose by 600 per cent! For the current government, the suggestion is simple – forget corruption, get the onion first.
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