As Onion Prices Continue to Skyrocket, Govt Tries Damage Control

The Centre has dispatched a team to Maharashtra, the epicenter of the onion crisis, to take stock of the crisis.

A labourer rests on sacks of onions at a wholesale market in Prayagraj.

(Photo: PTI)

Onion prices on Monday, 23 September, rose to Rs 60 per kilogram in Delhi and Mumbai, according to the Price Monitoring Cell of the Department of Consumer Affairs.

According to media reports, onions were being sold at retail prices in the bracket of Rs 60-80 per kilogram. This spike comes amidst a general rise in onion prices throughout India.

The crisis is so bad it prompted “unidentified persons” to steal a farmer’s onion stock, worth rupees 1 lakh, in Maharashtra's Nashik district on Tuesday, according to a PTI report.

WHY ARE THE PRICES RISING?

Tumultuous weather since the last year in key onion growing states such as Maharashtra, Karnataka, Gujarat, Madhya Pradesh, Rajasthan and Bihar is the major driving force behind rising onion prices.

Maharashtra and Karnataka, in particular – together responsible for nearly half of India’s total onion production – have been severely affected by a delayed monsoon, followed by excessive rainfall and flooding this year.

Bihar, too, saw pervasive flooding this monsoon.

This, coupled with last year’s drought in areas of Karnataka, Maharashtra and Rajasthan during planting season, has caused crop delay and failure in key areas.

WHAT IS THE GOVERNMENT DOING?

The Centre has dispatched a team on a three-day visit to Maharashtra, the epicentre of the onion crisis, to take stock of the current onion supply and future prospects, Financial Express reported.

Their findings suggest that India won’t run out of onions till the delayed Kharif crops (planted in May- July) are harvested and hit the market, as farmers in the state still have around 20-25 percent stocks tucked away in chawls.

Union Minister of Food and Public Distribution, Ram Vilas Paswan, while speaking to ANI, said, “You have seen the situation due to floods in several parts of country like in Maharashtra, Madhya Pradesh and others. The transportation is disturbed and that is also one of the reasons. We have kept 50,000 ton onion in buffer stock.”

He also said that the Centre will consider imposing the stock limit on onion traders if retail prices continue to remain high even after exhausting the buffer stock.

While Agriculture Minister Narendra Singh Tomar told reporters, “Onion situation will improve in the next few days. Cooperative Nafed is releasing stock from the central buffer at a lower price. We have enough stock of onions.”

Since the bulb is a staple in most Indian households, the high prices are still a concern for the government, especially as the Maharashtra and Haryana elections are right around the corner.

The state owned trading body, Metals and Minerals Trading Corporation of India (MMTC), on 6 September, floated a tender for the import of 2,000 tonnes (a few days’ worth) of onions from Pakistan, Egypt, China, Afghanistan and other countries of origin. This was later amended to exclude Pakistan.

In Delhi, which has seen some of the highest spikes in prices, Chief Minister Arvind Kejriwal has said that his government will sell onions at cheaper prices in fair price shops and mobile vans, reported PTI.

“The government is buying onions and the sale is expected to begin in 10 days. The price of this onion will be Rs 24 per kg. The government will sell onions through all fair price shops and mobile vans.”

Arvind Kejriwal, CM of Delhi

(With inputs from PTI, ANI and Financial Express)