Onions again

Onion prices have gone through the roof again. This keeps happening periodically despite the fact that high onion prices have in the past had serious political fallout.

Things don't permanently change for the better simply because the memory of policy makers is short and once a crisis is over, things go back to where they were before the latest crisis, thus laying the foundations of another crisis in the future.

Right now, it is quite unbelievable but true that even as most of the country is reeling under the impact of very high onion prices, farmers in Dharwad district of Karnataka are furious over the crash in onion prices at their local agricultural marketing yard.

This is indeed an isolated incident but it highlights what is wrong with the entire onion economy, how feasible it is to set it right and the fact that at the end of the day it is the farmer who suffers the most.

The current spurt in onion prices is being blamed on crop damage due to heavy rains in Maharashtra's onion bowl around Nasik. And, as could be expected, onion imports have been ordered. But this solution is likely to create more problems than it will solve.

For, barring some consignments which had already been contracted by private traders for imports from Pakistan and have, in fact, started arriving, the rest will hit the Indian markets when the domestic crop will have started arriving.

These imports will thus depress prices beyond what they do when crops arrive, hurting farmers no end and acting as a disincentive for raising output in the future, thus perpetuating the problem. The reason being cited by the agitated farmers of Dharwad are telling. They are alleging that manipulation by traders and the news of onion imports are behind the local crash in prices!

The periodic onion problem is rooted in both season and geography. While demand is spread out almost evenly over the entire country and all the seasons, about 60 per cent of production comes from the rabi crop. The cultivation of kharif and late kharif onion crops that cater for the demand during this time of the year is confined to a few states, notably Maharashtra.

This means having to store the produce for long and also transport it over long distances. Onion bulbs have necessarily to be stored in the open in ventilated structures as they tend to spoil in cold storages. This makes the stored stocks vulnerable to weather-related damage.

Plus, onion productivity has been stagnating at around 10 tonnes a hectare since the early 1980s while demand has been steadily rising. Higher production has come largely from more acreage. The scope for this is limited. Productivity has not risen as several improved varieties have not been widely adopted. Furthermore, much of the new onion production technology has not reached onion growers.

To permanently lick the problem, it is necessary to encourage cultivation of kharif and late kharif onion crops in more areas and facilitate induction of improved cultivation technology. The production and distribution of high-yielding seeds need to be stepped up.

Storage capacity based on improved structural design has to be expanded. The processing of onions to prolong their shelf life, and hence availability, as also greater value addition to ensure remunerative prices to growers, have to be taken forward.

Better facilities are needed for collecting and disseminating market intelligence, including the projection of likely crop size, to enable the trade to take timely decisions on imports and exports.

Finally, the move to amend the law which currently forces farmers to bring their produce to the designated agricultural marketing yards, which has been hanging fire in states like Karnataka, has to be brought to fruition. None of this is beyond the pale, but what mostly comes through are knee-jerk reactions.