The market is still getting what is being supplied from presumably hoarded stocks of onions by wholesalers and the middlemen

It is almost three months now. Onions, one of the most commonly used ingredient in the Indian cuisine, has remained out of reach for the aam aadmi.  Only the rich can really afford to pay Rs70-85 for a kilo!

In order to overcome the public outcry, the Indian government decided to import onions from China and Pakistan to ensure supplies by the middle of September, when the crop from Karnataka would come into the market.

When this idea was floated, it was realised that the actual process of ordering and  shipping would really serve no purpose at all, because by the time the foreign onions hit the market, native onions would have come in to meet the demand, and perhaps, help reduce the price.

Alas, the truth is, none of these have happened so far, as the market is still getting what is being supplied from presumably hoarded stocks of onions by wholesalers and the middlemen!

Except for assurances, the government has not been able to meet the domestic requirements by employing stricter controls. Nor have they been able to reduce the prices and make them affordable for the common man or even keep up the export commitments made earlier.

Telecom Minister, Kapil Sibal stated, rather grandiosely, that, “The Government is not the one selling onions”. Yes, that is true Minister, but what they can do is to reduce the control that the middlemen have on agricultural produce, although the middlemen cannot be eliminated altogether. Milton Friedman said, “Governments never learn; only people learn.” They are the ones who are unable to get the poor man's luxury of onions!

A day after landing in Dubai, the largest importer of Indian produce, this writer made visits to the retail shops (convenience stores) and the Karamah vegetable market to see what the fate of consumers of onions in this premier gulf city, which is also the centre of entrepot trade for the gulf countries.

According to the media, T Arun, CEO of Al Madina Hypermarket in Al Quoz has stated: “It seems the prices have reached the peak and we expect fresh shipments in October, when prices might stabilise. That's why we did not order bulk quantities.”

UAE imports onions from India and Pakistan. The price of onions has shot up from Dh2 to Dh4 per Kg (Dh1 = Rs17.80) though, in some shops price quoted varied from Dh3.75 to Dh5 (from small grocery stores to shops in large apartment houses).

Chinese onions are also not cheap, according to many Indian housewives. Many Indian women in Dubai go to work, and they prefer the quality of Indian onions, which they are accustomed to use in their cuisine.

What should the government really do?  It must encourage farmers to increase the acreage for such produce as onions, and ear mark definite quantities for export. More importantly, they must consider if they can bring about MSP (minimum support price) for onions. As otherwise, Mr Sibal must realise that while the government may not be in the business of selling onions, they may not be in the business of governance for long!

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)