Onion crisis needs a structured solution

Every other year, India is subjected to a situation where the price of onions, an essential component of the average Indian’s cuisine, either falls so low that farmers dump their produce in desperation, or rises so high that it brings tears to the eyes of consumers. This cycle has been a bane for a long time. Yet, governments have tended to react in a knee-jerk fashion to resolve the crisis at hand rather than evolve a consistent policy that could promote long-term stable supplies and prices. 

This year too, heavy rains in onion-growing areas have reduced supplies and profiteering middlemen in most metros have more than doubled retail prices, which have touched Rs 100 a kg in some places. In response, the government quickly banned exports, hurting relations with Bangladesh and several other South Asian neighbours having a similar affinity for onions in their daily cooking.

Ambassadors and high commissioners were also tasked with scouring global markets for imports without taking into consideration the fact that onions booked now would be shipped at least a month later. India produces about 22 million tonnes (mt) of onion in a normal year and consumes about 15.5 mt of it. Hence, exports are a must to keep prices steady and give farmers a remunerative price. Bans on export not only embitter relations with neighbours who depend on India’s farm trade, but also force them to look at other, more dependable suppliers. 

India has in recent years built up a buffer stock of onions, but it doesn’t seem large enough to tide over such temporary crises. A larger buffer and permission for Indian traders to import when needed is required. India’s storage losses are up to 30% of onions stockpiled. Better storage with humidity and temperature controls are similarly a must.

At the same time, despite being the second largest producer of onions, India has an abysmally low yield rate of between 6-19 tonnes per hectare, compared to 24 for China and 30 for Turkey. The country’s agriculture department needs to work to improve yields. Planning for the future is a tough call for any government busy firefighting, but it is a must if it wishes to avoid knee-jerk firefighting drills forever.