Why onion gets expensive in India again and again
908 out of 1,000 people in India uses onion. In such a situation, whenever onion is expensive, it comes into the headlines. What are the reasons behind onion becoming expensive?
Potatoes, Onions and Tomatoes. These three things are very important for Indian vegetables. One of these things is present in almost every Indian food.
And every year, the price of any one of these three things in the Indian market increases a lot. Onion prices are increasing this year. In some states, onion prices have gone up to Rs 80 to 90 per kg. In view of this, the central government has banned the export of onions till further orders. To control prices, the government is also importing onions from Afghanistan and Egypt.
The first consignment of onions coming from Afghanistan will reach India around 15 October. When onion prices rise, it also has a political impact. The price of onion was the biggest issue in 1998 Delhi Assembly elections, which led to the defeat of Sushma Swaraj’s government. After all, what is the reason that onion prices keep increasing every one or two years?
1.Too much consumption
In India, whether you see vegetarian food or non-vegetarian, onion is used a lot in both. According to the data of the Government of India, 908 people eat onions per thousand people in India. This means that the number of onion consumers in India is more than 100 crores. But in India, onion is not produced in all the states. According to the Agriculture Ministry, India produces around 23 million tonnes of onions. It’s 36 percent production is in Maharashtra, 16 per cent in Madhya Pradesh, 13 per cent in Karnataka, six per cent in Bihar and five per cent in Rajasthan. Onion production in other states is very less.
2. Production and storage not properly
Onions are cultivated throughout the year in different states in India. Between April and August, there is a Rabi crop in which about 60 per cent of onion is produced. Between October to December and January to March, 20–20 per cent onion is produced. The period of rain in India is from June to October. The crop gets spoiled due to excessive rainfall. The problem does not end even when onion reaches the stores. If there is too much rain after reaching the storehouse and if moisture or water comes in the store then onions rot. This happens often. The floods in Madhya Pradesh and Maharashtra this year have had a major impact on onion production.
3. Market failure
Onion is mainly produced in six states. 50 per cent of onion comes from 10 wholesale markets of India. Six of these are in Maharashtra and Karnataka. This means that 50 per cent of onion prices are in the hands of a few hundred traders. These traders can influence onion prices in their own ways. Also, there is no fixed minimum support price of onion. In such a situation, a large number of onions reach the market at the time of harvesting. In this case, its price falls to 1 rupee a kg. In such a situation, farmers throw onions on the streets and go away. Also, black marketing starts by getting cheap. Therefore, when there is no time for harvesting, prices rise.
4. Deterioration of buffer stock
The government also keeps a part of everything safe so that it can be used in any emergency. This is called a buffer stocker. The central government also maintains a buffer stock of about 13,000 tonnes of onions. But it gets worse every year. According to 2018 report of the Times of India, out of this buffer stock, 6,500 tonnes of onions were destroyed. Presently, the cheap onion being distributed by the Delhi government has been taken from this buffer stock.
5. Politics included
It is a common trend that onions become expensive during Maharashtra assembly elections. Experts say that big businessman who trades unions have relationships with politicians and political parties. At the time of elections, they give money to leaders and parties to contest elections. In order to earn money given for elections, traders increase the price of onions. Also, some part of this also reaches the farmers, whose immediate benefit is also in the vote.
Originally published at https://www.mubahisa.in.