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When Onion Price Hits the Roof Next Time, You Should Know Where the Problem Lies

onion price rise

The record about Onion price rise has been set straight now in the Parliament. The Centre did whatever was possible at its end; however, many state governments have not cooperated in dealing with the situation that resulted in Centre experiencing a double burn.

When the onion prices rose sharply in December, the common man mostly questioned the government at the Centre as to why his pocket was  being pinched. The Centre quickly made arrangements for importing onions to address the demand issue, but ended up burdening itself since the states showed no interest to distribute them at their end.

Ministry of Consumer Affairs, Food & Public Distribution in a Lok Sabha reply on February 11, 2020 set the record straight on onions. The reply said, “MMTC contracted import of 41,950 metric tonnes (MT) of onions against which 36,124 MT of import materialized. States/UTs were offered imported onions. However, as on 03.02.2020, only about 2,501 MT imported onion, in total, were taken by States/ UTs that include Andhra Pradesh, Kerala, Telengana, Uttar Pradesh, Uttarakhand, West Bengal, Himachal Pradesh, Goa, Haryana, Meghalaya and Jammu & Kashmir.”

In fact, Consumer Affairs Minister Ram Vilas Paswan had brought out this fact before media back in January. At a time when retail price of onions had touched ₹170/kg, the Centre imported onions from Egypt and Turkey so that it can provide them at ₹55/kg to public. Even as the Union government offered to bear the transport cost, the states evidently chose to wait for domestic crops to hit the market instead availing Centre’s offer. Minister Paswan at that time also explained the predicament saying that “someone should not go court tomorrow saying that imported onions are rotting.”

In this background, people should be aware that the next time they face price rise in products like onions, they should be perhaps questioning their respective state governments first about how exactly they want to address the issue.

Secondly, there is always this dilemma of balancing that stresses any government. If the prices of daily staple like onion goes high, naturally the consumers complain. If the prices plummeted, it is the turn of farmers to be affected. Back in November 2019, FM Nirmala Sitharaman had said that states have been requested to reject the Agricultural Produce Market Committee (APMC) and adopt electronic National Agriculture Market (eNAM) so that farmers get better price for their produce.

If anyone wants the Centre to be hundred percent responsible for price rise in produces like onion, it is only logical to expect that marketing and distribution systems need to be modernized  towards a new uniform model, as demonstrated by the saga of the recent onion price rise and the predicament of Centre in dealing with it is explaining the problem.

You may also like to read our earlier article Are We Reading Too Much Into The Latest Inflation Data?