Onions are a key ingredient in the kitchens of a majority of Indians, and it is also known to be one in the political mix of India. For years onion has been known to make ruling governments cry and the opposition smirking sheepishly behind their outspoken criticism and “concern for the common man”.
The price of this commodity, which can give sleepless nights to rulers apart from fuel rates, is again facing instability. Onions are all set to leave customers teary-eyed once again as prices of the kitchen staple have skyrocketed with some states witnessing a retail price of Rs 99 per kilogram.
A video of Maharashtra farmer crying over the ridiculously low price he received for his onion crop has taken the social media by storm. The farmer who is from Ahmednagar, 120 km northeast of Pune had to sell his crop at only Rs 8 per kg.
In the video, he can be seen crying helplessly. Sharing his ordeal, he asks what will he pay to the labourers who picked the onion from the field and how will he meet his own family’s need.
“I had to employ labourers to pick onions from the field in rain. How do I pay them? What should I take home to feed my family?”, the farmer asks. He also complains that the government does not care about the farmers.
But, he is not the only one. Thousands of farmers have been a neglected lot since decades but the unsparing inequality between the price that they are paid for the crop and the retail price of the same item has seen an unprecedented rise over the past couple of years.
Every time onion price hikes revisit the country, economists and policymakers debate as to what triggers the periodic upswing. While some others invariably hold the supply constraint as the causal factor for the price hike.
Some have emphatically pointed out that the price spikes can be attributed to a large extent to fragmented supply chain.
It’s not supply constraints but hoarding by middlemen that’s to blame. They need to be reined in.
In India, the onion trade is dictated by middlemen. A study by the National Council of Applied Economic Research (NCAER) reveals that farmers make a profit of just ₹5-8 per kg, with the wholesalers adding 10-15 per cent and retailers gaining the most with a mark-up of 20-25 per cent.
This being the ground reality, the price rise will neither get translated to more earnings to farmer, nor will it benefit the consumers.
The need of the hour is to discipline the trade by cracking down on the chain of middlemen, wholesalers, and pseudo farmers who eye windfall profits in the hoarding game, and enforcing stringent measures towards banning secret bidding of produce.