The political price of onions

The spectre of rising onion prices is haunting Indian politics again. As prices trebled over a period of three weeks, touching Rs.90 a kg in some parts of the country, the liliaceous plant, whose bulb is the mainstay of many Indian staple recipes, became a topic of debate and discussion not only for ordinary consumers, but for economists and policymakers as well. India is the world's second largest producer of onions after China. But in the face of galloping prices, the central government enforced a ban on exports and allowed imports from Pakistan. Onions have enriched traders, brought incensed women and men on to the streets, and brought down governments. People of all classes consume the vegetable in considerable quantity, and any rise in price tends to be politically sensitive. In north India especially, curries and dishes are incomplete without it. The defeat of the Bharatiya Janata Party in the 1998 Delhi Assembly election was attributed, to a large extent, to its government's failure to curb the rise in the price of onion. Already tagged as pro-trade, it was slow to react at that time. Twelve years later, the Congress-led United Progressive Alliance seems more aware of the political risks in letting the situation spin out of control. The Centre, through State governments, supported the supply and sale of onions via cooperatives at controlled rates, and the situation appears to have eased a little.

While the short-term measures have brought some relief, the real challenge for the central government is to tackle long-term food inflation. Prices of essential commodities have generally been on the rise, thanks to a combination of factors, including repeated hikes in fuel prices and flood damage to crops. In the week ended December 11, the Wholesale Price Index-based food inflation went up to 12.13 per cent, an increase of 2.67 percentage points over the previous week. The full impact of the high onion prices is likely to show only in the figures for the week ended December 25. Onions have hogged the headlines as a vegetable without substitute in Indian cuisines but consumers have been hit just as hard by the steady rise in the prices of all food items. In this scenario, the government needs to come up with something more than quick-fix solutions. Instead of letting foodgrains rot in godowns, it must expand and strengthen the public distribution system as a way of providing food security for the poorer sections. Otherwise, there will be a political price to pay — sooner than later.