Wiping away onion tears

Spiralling prices of onions have brought tears to the consumers in Assam. With the state continuing to be heavily dependent on onion supplies from other states, consumers are always at the mercy of traders. The price hike is often attributed to a rise in onion prices at sources, but ground realities tell a different story. There is a complete lack of transparency on the part of traders regarding procurement costs as well as transportation and storage costs. Assam denotified fruits and vegetables from the relevant provisions of the Agricultural Produce Market Committee Act, 2003, due to which the state government cannot make any direct intervention against price hikes in fruits and vegetables except in cases of hoarding. The alternative way for the government to moderate onion prices is to release buffer stock of the commodity procured by it under the Price Stabilisation Fund (PSF) scheme. Union Minister of Consumer Affairs, Food and Public Distribution Prahlad Venkatesh Joshi flagged off mobile vans in the national capital on Thursday for retail sale of onion at Rs. 35 per kg. Onion released from government buffer to the price volatility is procured under PSF. Onion buffer stock currently available with the Central Government increased to 4.7 lakh tonnes compared to last year’s procurement of 3 lakh tonnes. The government claims in an official release issued by the Press Information Bureau that the outlook for onion availability and prices in the coming months is positive, as the Kharif sowing area has seen an increase of 102% till August 26, over last year. Besides, about 38 lakh tonnes of onion are reported to be still in storage with farmers and traders. The figures sound reassuring, but the sad reality is that the distribution of onions is skewed when it comes to Assam and other states in the Northeast, which are dependent on supplies from onion-growing states. Onion grown in the country has two main harvesting seasons: November to January and January to May. Price realisation data shows that farmers got in the range of Rs 12-13 to Rs 25-26 per kg. Clearly, the retail price in Assam, which is in the range of Rs 45 to Rs 60, is more than double the price at the source, and the argument that the price rise is due to a rise in prices at procurement centres is not convincing. Nevertheless, the PSF can provide a cushion for the consumers from the exorbitant hike in prices of onion if the available fund is promptly utilised to release onion from the buffer stock at a reduced price. Increasing the availability of PSF funds and putting in place a robust mechanism of release of onions from buffers to markets across the state through judicious utilisation of available funds can provide much-needed relief to consumers. Why this has not happened is baffling and calls for a thorough review of the PSF working in the state. Instead of waiting for people to voice resentment against, the intervention under the PSF mechanism needs to be prompt and release of buffer stock at reasonable prices, commencing as soon as prices of onions start rising in the market. If the fund falls short to meet the requirement, the state government can always move the central government to increase fund allocation. Mr. Joshi said that the government plans to release onions from buffer stock in several other cities, including Guwahati. The immediate challenge before the government is to reduce the wait time for rollout of onion release in different cities and create the necessary infrastructure support system to ensure that it happens simultaneously across the country. Again, within Assam, the retail sale of onion procured under PSF only in Guwahati will not wipe away the tears brought to consumers by skyrocketing prices of onion in other parts of the state. While PSF provides a temporary measure of market intervention, increasing the state’s own onion production is equally important to keep the prices under check. This can be possible only when the Agriculture Department takes concrete measures to translate its vision to boost onion production in the state. The state has the potential to increase the area currently under onion cultivation in the state from less than 9,000 hectares, which are primarily spread in the three districts of Barpeta, Dhubri, and Nagaon. This can happen only when farmers are convinced to undertake commercial cultivation from the current practice of backyard cultivation. Increasing productivity, improving post-harvest management to reduce crop loss, and providing an and providing an affordable storage facility are some of the interventions that will be required to make onion farming on a commercial scale successful and sustainable. The majority of retail consumers are clueless about the food distribution process, but what they want is stability in market prices so that their monthly budget is not upset by skyrocketing prices of daily essentials. The Food, Public Distribution, and Consumer Affairs department prioritising PSF utilisation can provide some succour to people grappling with price hikes.