Peeling Capital’s onion quagmire
25 Oct 2013 10:11 PM GMT
Once again the Capital is being held ransom to unjustifiably high spikes in prices of the kitchen staple. Denizens of Delhi have been shedding onion tears for months now, with unseasonal and prolonged rains in the northern parts of India affecting the supplies of kharif crop because of delayed harvesting. However, despite the unfavourable harvesting conditions, the hike in the prices of the vegetable (that is a crucial ingredient in almost every Indian recipe across the regional divides) is so disproportionate to the constraints in supplies that it merits a full-scale investigation into the matter. Already the agriculture ministry has claimed, and rightly so, that the Rs 90 per kilo retail price of onions, an unprecedented development, is because of ‘monopoly’ of wholesale traders and resultant large-scale hoarding of the vegetable, thereby pushing up the rate artificially.
Indeed the ministry is right to point out that the massive cartelisation of onion supplies is because of the non-amendment of the Agriculture Produce Marketing Committee (APMC) Act, which could have prevented the prices from being blown out of proportion. Naturally, the wholesale traders, in absence of proper regulation, have colluded to bring about the excessive shooting-up of the onion prices, citing corresponding hikes in fuel prices and freight charges. The tendency to monopolise and cartelise, although a pervasive problem seen amongst traders from both public and private sectors, is, however, the root cause of the current onion conundrum, which must be dealt with adequately.
Evidently, the Sheila Dikshit government has failed miserably in bringing the onion prices under control and issuing measures to regularise the supply of the kitchen staple. The Delhi administration, moreover, is in deep sea as far as curtailing the malpractices of wholesale and other traders is concerned, who, more often than not, resort to illegal raising of wholesale prices, which consequently pushes up the retail rate, bringing enormous woes to the consumers, particularly the middle and poorer classes. Indeed, the prices of onion and hiked power tariff are the cruxes on which the Delhi assembly election would be fought. Hence, the Dikshit government must act on curbing the gross violations by the traders, if only to shore up its own chances of coming back to power. Although onion exports have been cut down to cater for the unmet domestic demand, what the state government must ensure immediately is that the proclivity towards cartelisation is nipped in the bud. This can be done if an amendment to APMC is brought about, which would encourage more players in the limited wholesale traders’ clique, thereby developing a mechanism to regularise uninterrupted supply. Moreover, the government must also look into the fact that the gap between wholesale and retail prices of agro-commodities, including onion of course, does not breach a limit, which is the case in the current onion trouble. Unless the APMC bill is brought into the fray, it will be the government that will be reduced to shedding tears come December.
Indeed the ministry is right to point out that the massive cartelisation of onion supplies is because of the non-amendment of the Agriculture Produce Marketing Committee (APMC) Act, which could have prevented the prices from being blown out of proportion. Naturally, the wholesale traders, in absence of proper regulation, have colluded to bring about the excessive shooting-up of the onion prices, citing corresponding hikes in fuel prices and freight charges. The tendency to monopolise and cartelise, although a pervasive problem seen amongst traders from both public and private sectors, is, however, the root cause of the current onion conundrum, which must be dealt with adequately.
Evidently, the Sheila Dikshit government has failed miserably in bringing the onion prices under control and issuing measures to regularise the supply of the kitchen staple. The Delhi administration, moreover, is in deep sea as far as curtailing the malpractices of wholesale and other traders is concerned, who, more often than not, resort to illegal raising of wholesale prices, which consequently pushes up the retail rate, bringing enormous woes to the consumers, particularly the middle and poorer classes. Indeed, the prices of onion and hiked power tariff are the cruxes on which the Delhi assembly election would be fought. Hence, the Dikshit government must act on curbing the gross violations by the traders, if only to shore up its own chances of coming back to power. Although onion exports have been cut down to cater for the unmet domestic demand, what the state government must ensure immediately is that the proclivity towards cartelisation is nipped in the bud. This can be done if an amendment to APMC is brought about, which would encourage more players in the limited wholesale traders’ clique, thereby developing a mechanism to regularise uninterrupted supply. Moreover, the government must also look into the fact that the gap between wholesale and retail prices of agro-commodities, including onion of course, does not breach a limit, which is the case in the current onion trouble. Unless the APMC bill is brought into the fray, it will be the government that will be reduced to shedding tears come December.
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