Statistics have never been so stark. In November 1997, onions could be had for Rs 10 per kg.In November 1998, prices are expected to reach Rs 70 per kg. Explanations have kept pace with inflation. Unseasonal rains in winter ruined the crop. A heat wave in summer ruined the crop. Farmers reduced onion acreage, causing lower yields and higher prices. Profiteering traders contrived the scarcity. The Government's buffer stock was inadequate. In actuality, the truth is about all these factors - and about none of them. What India is guilty of is a complete failure to anticipate the demand-supply equation.As early as December 1997, when onion prices had touched Rs 20 per kg, it was clear a crisis was brewing. Yet, the Ministry of Agriculture remained smug, confident that if the problem were ignored long enough it would disappear.It was then that the decision to import onions should have been taken. Instead, the Government continued to sanction the export of onions till well into this year.When the import order was finally placed a couple of weeks ago, it was a case of too little too late. At 15,000 tonnes, the onions coming in from Dubai and Iran will barely meet the needs of the four metros for a month. .preferred-source-banner{ margin-top: 10px; margin-bottom:10px;}In sum, India is paying for institutionalising a system which is so distrustful of the market that it completely ignores even elementary economic laws. For a start, the Government presumes it has a monopoly on commercial wisdom.Plans to import are delayed to a point where they become virtually useless and where the international commodity trade knows India is desperate. The result is India buys at high prices and bureaucrats and ministers face bribery charges. This has been the precise recipe for repeated sugar scandals. The politically influential farm lobby too is happy as it has been allowed to make a killing. As for the hapless consumer, she is left in tears even if there are no onions to chop.Published By: AtMigration Published On: Oct 19, 1999--- ENDS ---
