Retail cartels are rigging onion prices: Radhakrishna Patil | business | Hindustan Times
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Retail cartels are rigging onion prices: Radhakrishna Patil

business Updated: Sep 23, 2013 12:33 IST
Sayli Udas Mankikar

At a time when the price of onions - a staple ingredient in Indian kitchens - is skyrocketing, the man in the hot seat, Maharashtra's agricultural minister Radhakrishna Vikhe-Patil, whose department controls the continent's largest onion market in Lasalgaon, Nashik, answers some tough questions.

He explains the reason why onion prices have risen and permanent solutions to tackle this annual phenomenon.

Why have onion price fluctuations been taken so lightly?
The current shortage is a temporary one. The onions situation that has emerged is owing to the persistent drought in the state since the onion crop depends on rainfall.

We had about 67,000 hectares of plantation last year in Nashik alone, which was for late rabbi and summer onions. This year the area has gone down to 35,000 hectares.

Additionally, the stock that is procured in mid-September from southern states like Andhra Pradesh and Tamil Nadu has failed. In the Karnataka market alone, 3,80,000 quintals of onion came into the market on September 12, 2012, an at average price of Rs 725 to 780.

This year, it is 6 lakh quintals and average price is Rs 3,700.

Maharashtra is going to be sending onions to Delhi considering it is most affected? Or it is out of political reasons?
We met Union food minister KV Thomas on Friday and have extended help to deal with the crisis in Delhi where onion prices are touching Rs 90 a kilogram.

We have offered to send 300 quintals of onions on a daily basis, for which we have put forth three options.

The first is where onions will be directly supplied from Pakistan or China which is the cheapest option with a landing price of Rs 35 to Rs 45 per kilogram.

We have also offered to send onion from Nashik by cutting into our stock. The Union government will be telling us which way they want to go in a day or so. Prices of onions will come down considerably once this is initiated.

Why does the government wait for such a crisis situation to arise and not crackdown on traders who resort to hoarding for profit?
I am confident that there is no hoarding of stock by traders anywhere in Maharashtra. Several checks are conducted by flying squads and officials, who have verified that there is no hoarding.

Farmers now have better storage facilities due to certain central government schemes and are getting a better price and holding on to stock.

So you agree with Union agriculture minister Sharad Pawar's statement on how we should not complain on rising onion prices as farmers are happy getting their due share?
Why should there be a furore only when the farmer is benefitting from getting better price for his produce? I agree with minister Sharad Pawar on that count.

When farmers were getting 50 paise for a kg on onion no one makes a hue and cry. Now that there are getting a better price, people are cribbing.

Like Delhi, in Mumbai too onion prices have touched Rs 70 per kg while at the government shops you are selling it at Rs 54 per kg. If traders are not hoarding then why is there a price difference in retail? Who is to be blamed?
We have taken several initiatives to keep tabs on market price of onion. The skyrocketing prices in the city are due to the 8,000 strong retail cartel, which is rigging the price.

To further bring down the price we are bringing in two types of onion - the old at Rs 40 a kilogram and the new at the current price that will further regulate the cost.

If retailers don't mend their ways, we will be taking action against them and even invoke Mesma for artificial price inflation of onions.

When should we expect this situation to turn and onion prices becomes affordable?
Last year we had a late rabbi crop growing over 65,000 hectares this year it is only 15,000 hectares, which will yield about 17 lakh quintals of onion that will hit the market by second week of October. This is when the prices will stablise.

Isn't there any permanent solution to this problem that will ensure that both the farmers and consumers are happy?
The only solution to this is to initiate protective irrigation where we address the issue through dry land farming which we have started in Maharashtra.

We have to work out techniques which will give enough water that will make sure that the three onion crops cycle is successful even in drought situations. This will not happen through legislations but training and convincing farmers about it.