Once again, India is hyperventilating over onions.
In Delhi, say press reports, prices of the bulb have spiked by 25% between July and August. Similar spikes are being reported from elsewhere in the country.
In response, blame games are underway. NAFED, a central government agency that procures agricultural produce, has accused the Delhi government of ignoring its missives in April, June and July about an imminent rise in onion prices.
Also underway are counter-measures to cool down onion prices. The Delhi government has decided to sell onions at subsidised rates. The central government has decided to import 10,000 tons of onions from Afghanistan, Pakistan and Egypt.
These responses are resulting in bemusement amongst food policy experts.
This January, the competition regulator sent an independent report to the ministry of agriculture on why onion prices spiked abruptly in 2010, a pattern that is playing out again today, with prices ruling at Rs 60-80 a kg for the last two months.
This 86-page report, one of the clearest descriptions of how India’s agricultural markets function, made some stinging observations: traders colluding and acting like a cartel, the unequal relationship between traders and farmers and exports not being calibrated to domestic demand, all being perpetuated by loopholes in the rules.
While this report, titled ‘Competitive Assessment of Onion Markets in India’, studies a crisis that happeend three years ago, it warns of why, unless systemic change is not effected, the spike in onion prices will keep happening in the years to come, especially at this time of the year.
This report—commissioned by Geeta Gouri, member, Competition Commission of India, and prepared by researchers at Bangalore’s Institute for Social and Economic Change (ISEC)—has remained in the ministry’s cold storage. “There has been no response from the ministry at all,” rues Gouri.
a quick and dirty story on why, every so often, onion prices spike so abruptly. i need to get into more detail on all this.