It is better that farmers hoard and profit than die a pathetic debt ridden death devoid of dignity!
Having said that the shockingly short memory span and absolute lack of common sense in reportage continues to appall me. It was hardly a couple of months ago that newspapers and news TV were competing with each other to break stories of farmer distress. Suddenly all the lessons learned from that reportage seems to be garbaged as archives as prices of onions become dearer.
Claiming to reveal the reasons for the surge in onion prices - media alleges that farmers are hoarding onions so as to profit from it later. In the same breath, it is alleged that this is the month of Shravan when the consumption of onion is the lowest and farmers are creating a false scarcity so that prices go up and when the month ends and consumption of onions increase, farmers can profiteer from it. By no stretch of imagination imagine how artificial scarcity can be created when the demand is low in preparation for an increase in demand – particularly by farmers whose very existence is at the brink. The argument is that along with the earlier rise in tomato prices, onions are contributing in turning the tide of what is being termed “negative food inflation”. There is almost a conspiratorial edge to this assertion – as if implicating farmer’s role in deliberately playing with the market.
Ironically the stage where the price action is taking place is between Maharashtra and Madhya Pradesh.
The truth of the matter lies elsewhere. But before we look into it – I must say that the wholesale price index for food needs to be seen with a lot of suspicion – because for the period that the state agencies claim there was negative food inflation – in the market – food prices were steadily going up. Some products like fresh vegetables and fruits saw considerable price increase in the retail market.
First of all the acreage in which onion has planted has come down by almost 50% - while it can be safely assumed that consumption has only increased. Second there has been a crop failure in Karnataka due to the drought. Third the above two factors have caused a real scarcity in the market. Fourth the onion prices were really low throughout the year and the Madhya Pradesh state government was forced to buy onions at a Minimum Support Price. Fifth, it is usually a practice by farmers to stock onions to be sold during the lean months – however this year the scarcity in the lean months actually proved to be a bonanza for at least the farmers who had not sold their stocks yet.
So, now the traders want to import onions to undercut the existing prices and everybody is happy. The government is happy because its artificial numbers showing that inflation is on the decline can be sold, the consumer gets precious onions at what is deemed an affordable price and the trader makes a killing. But the few farmers who thought that they would get a temporary lifeline with the hike in onion prices are bound to be in for a disappointment as the imported onions will tamper with the illusion of free market.
The discourse on food price and calculation of inflation based on that dehumanizes the farmer. While there is overall concern to keep food prices low to cater to an increasingly consumptionist economy - the (marginal) farmers are not included within the concern. Compared to leaping costs of other necessities like education, health care etc. (not to mention other modern amenities like communication) food prices have remained more or less stable - excluding the farmer from the larger canvas of development that is being sold.
The farmer will never get his fair price and is doomed to die without dignity – for he is no Ambani that he will be excused for hoarding and profiteering for livelihood. But the takeaway lesson is that onions bring tears to not only those who peel it, but also to those who grow it!
P.S - Every year farmers do store their onion crop in specially made structures that will not allow moisture causing the bulbs to sprout or rot to feed the market in lean months.