/Why do onions make us cry every year?
onions-make-us-cry

Why do onions make us cry every year?

It is the time of the year when onions bring tears in our eyes, but not when we cut them in our kitchen but when we go to buy them in the market. The phenomenon has become almost an annual affair. Though a slight hike in veggie prices usually happens during monsoons, every few years the effect is seen more pronounced on the onions.

Why does it happen? Why doesn’t the Govt do something about it? Is it due to middlemen who hoard onion stock to create an artificial shortage in the market? These are some of the questions that pop up into our minds. People are seen cursing the Govt for not doing enough. The problem of onion price hike has many layers just like onions themselves. So let’s, try to understand it layer by layer.

Onion is grown in most states of the country. But Maharashtra & Gujarat are the largest producers of onions, and the country’s demand is largely fulfilled by the crop in these two states. Hence the price of onions is also largely determined by the crop from these two states. This year, the monsoons have been quite harsh on both Maharashtra & Gujarat. It was the longest monsoon season experienced since 2007. The extended monsoon run damaged the crop which was to be harvested post monsoon. It is to be noted that Onion crop is highly sensitive to humidity both during its development and storage period. The damage of the current crop is partly the reason for the shortage in supply which triggered a price hike.

In anticipation of a supply crunch and considering the fact that assembly elections would be round the corner the central Govt created an onion buffer stock from the Rabi crop which was harvested in Apr- May this year. The estimated buffer quantity was about 50,000 tonnes. Many states including the nation’s capital Delhi are currently being fed from this buffer stock. Onions are usually stored in bamboo based storage structures because it needs constant aeration to remain in good condition. These storages are exposed to external weather and it seems the rains have negatively affected the quality of buffer stock stored there. We can ask why, didn’t the Govt use cold storages for storing the onion buffer. For one, cold storages of such capacity aren’t available, are too costly to be taken if at all and since it is a common practice to use aerated structures for storing onion, the Govt also went with it. Another interesting take-away from this buffer exercise is that the onion purchase by Govt was done on prevailing market prices, since the prices were already above the mandated MSP (Minimum Support Price) level.  So there is no question of farmer’s distress occurring during the Rabi harvest.

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Some people think it’s the traders or middlemen behind the price hike. Sadly it’s not true. The private middlemen also store their stock for 3-6 months to be sold off during peak season, so as to earn profit then. But they also have to bear the cost of storage, and the risk of holding the commodity for such a long time under uncertain market conditions. So they too expect fair margin in return and are not wrong in their approach. Unless they indulge in illegal activities like hoarding or black marketing which are punishable, the middleman cannot be totally blamed for price hike.

 We have analyzed all three factors in the supply chain, viz : Farmers, Govt & Traders. Surprisingly, none of the three usual suspects seem to be at fault. All of them have tried their best to give us the best of onions. Then who is to be blamed? Do we consumers also somehow share the burden?? We would if we introspect as to whether onion really is such an essential food ingredient. Can’t we do away with it for sometime or reduce/ration our consumption pattern during peak season. Is it not better to reduce our consumption than to force Govt to provide us subsidized onion, whose cost is ultimately borne by us only in the form of higher taxes. Remember, there is no free lunch. All subsidies are ultimately borne by the taxpayer. So let us not burden the Govt with more subsidies. Govt’s job should be limited to regulation of exports, so that exports do not create scarcity in our own country. Other than that the market should be able to manage the demand supply equation by itself.

Onion is not an essential food item. Or it would also be distributed by the state Govts through ration shops the way pulses, rice and wheat are. Onion is also not a great source of proteins/energy or its use would be mandated in the Mid Day Meal scheme implemented in lakhs of schools across the country. Onion is 90 percent water. But it is psychologically connected to the minds of middle class which always wants things dirt cheap. And middle class is a big factor influencing the outcome of elections. Hence cannot be angered for obvious reasons. Remember, when an over production happens and farmers are forced to sell their onion crop at throwaway prices, we, the middle class, average taxpayer, housewife, doesn’t come out to buy more onions to save the farmers. Some of whom may end their lives after the distress sale. Nor we expect the Govt or traders to buy out the extra stock and save the poor farmers from suicide. So we don’t have any moral right to demand low priced onions all the time. Dear middle class. If you want Onion, buy it at market rates.

I am a marketing professional with corporate experience in cement, b2b project sectors. Passionate to write about geopolitics, defense, economic and political affairs of the country.