With the farmers’ movement still in the backdrop, inflation in the price of vegetables is brewing trouble for the Narendra Modi government. A kilo of tomatoes has been worth more than two litres of petrol, and now, onion prices have reportedly doubled. Food inflation is hitting the pockets of the working classes hard.
Other vegetables have been riding the tomato wave, and the spurt in onion prices is propelling an inflation tsunami. The onion is a highly political vegetable, capable of making and breaking governments. The tomato is almost as potent.
The Pimpalgaon Agricultural Produce Market Committee in Maharashtra reported that onion prices jumped from Rs 1,200 per quintal on August 5 to Rs 2,500 on August 8. Prices have been sharply rising in other mandis across the country. Bhojpur district’s Arrah market reported Rs 2,600 per quintal and even in Gujarat’s Vadodara Padra market, prices touched Rs 2,500.
To understand this surge, we spoke with Shankar Darekar, a farmer from Lasalgaon Mandi, Maharashtra, a region that is a major producer of onions. “Climate change affected the onion quality,” he said. “Erratic rainfall has also affected other states and is responsible for late crops.”
What about market supply? “This year, our crop is short, while red onion is still a month away. The Bangalore crop is 15 days late. April and March rains affected the crop in the field and in storage. There was excessive humidity and the shelf life of onions in godowns went down. Much of the crop was lost to fungal disease, which flourished due to the humidity,” said Darekar.
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His narrative brings us back to the failure of TOP, the tomato, onion and potato programme. This is the second time that State mechanisms have failed to control prices. NAFED and other agencies need to be alert to the imminent crisis and release buffer stocks if necessary, before onions reduce consumers to tears.
Vijay Jawandhia, Maharashtra farmer and organiser, offered an alternative view: “Prices are rising due to exports, which are fetching $300-350 dollars per tonne. Rs 24-25 per kg are the export prices. Malaysia, Bangladesh and some Middle Eastern countries are the major destinations. Besides, some areas which had sowed onions suffered losses due to untimely rains, reducing the supply further. Farmers were forced to re-sow the onion crop, resulting in late harvests. Also, most of these prices are based on projections.”
“When the farmer gets Rs 2-3, no one complains, but when farmers start getting more, the government initiates measures to cut prices. Why can’t the government buy the harvest when the prices were at Rs 13-15 per kg and use it as buffer stock? That way, the farmers, the government and consumers would all be protected,” he added.
Food economy in trouble?
The wheat export ban, spiralling prices of tomatoes, vegetables and now onions ― India is displaying a series of symptoms of a chaotic food economy. Erratic weather has provided artillery support, pushing up prices of fresh produce, and State policy and price stabilisation measures have completely failed yet again.
India is headed for the moon but fails to address basic issues in the food economy, which can be easily removed by efficient political decision-making, starting with planning. Individual farmers can’t be expected to track the weather and plan, but the government spends millions on space technology for weather prediction. They have a fair idea of what is to come, but there were no policy decisions for public procurement or weather alerts and storage advisories. Even if advisories were put out, they weren’t effective. Much of the onion crop was diseased, or was wasted due to low prices at the time of harvests.
Policy planning on exports is also missing. Knee-jerk banning and unbanning of exports hurts both small and big traders, and eventually farmers and the larger food economy. India needs to have a formula to gauge crops and the export limits for them.
As in the case of wheat and other agri commodities over the last couple of years, prices have been volatile due to excessive exports, especially in times of scarcity. The government needs to wake up to the fragility of the food economy, because many see the current onion price inflation as strike three against its food policies.
Indra Shekhar Singh tweets at @Indrassingh.