Onion prices spike for three reasons: the crop fails, the supply pipeline is clogged, or profiteering. In every case, the Indian citizen holds the government responsible, as it should. Spectacular electoral debacles over the price of this vegetable are evidence of the common man's sensitivity to issues that show up when onion prices hit the roof. Foremost is farm productivity, which has languished for a quarter of a century. India has been unable to build on the gains of the Green Revolution, its food security is under threat. Second, India's farm supply chain remains antiquated and a quarter of its vegetables rot before reaching the market. Finally, the trade in India's agricultural output is loosely policed, with prices tripling between the farm and the kitchen.
Since onion does not travel well, deep agricultural reforms are the only safeguard against recurrent price surges. The political cost of ignoring the signal from the humble bulb is high enough to merit this attention. The irony is the government of the day respects the onion, but little else. Food price inflation has averaged 14% between April and September with a business as usual approach in the ministries concerned.
The Congress has admitted that inflation is the Achilles' heel of UPA 2 and that the government needs to raise farm productivity and improve the food supply chain. With onion prices at R80 a kilo, it now realises that hoarders are at work. Why can't we shake off the feeling we've heard it all before?