Onions retailing at an all-India average of Rs 70 per kg — they ruled at Rs 50 levels last year too around this time and had crossed Rs 100 by mid-December — has one key takeaway for policymakers. That has to do with the unreliability of kharif crop production even in supposedly normal monsoon years. The southwest monsoon season (June-September) recorded significant surplus rainfall both in 2020 and 2019. Yet, they didn’t yield the desired harvests. Last year, the rains weren’t good till the last week of July, but it poured thereafter and right through October. It led to the standing crop — including onions, pulses and soyabean — suffering heavy damage. Something similar has happened this time. Excess August rains took a toll of soyabean and urad (black gram) in Madhya Pradesh. In September, it was arhar (pigeon pea) and onion in Karnataka. The current month has been a washout for Maharashtra’s harvest-ready kharif onions and even the late-kharif bulbs that couldn’t be transplanted due to the nurseries getting flooded.
The extended monsoon rains, although not beneficial for kharif, should nevertheless help recharge groundwater aquifers and thereby, deliver a bounty during the rabi season. Farmers did harvest bumper winter-spring crops of wheat, chana (chickpea), mustard and even onion, tomato, gourds, beans and melons this April-June; one can hope for a repeat in the upcoming season as well. Rabi production is largely dependent on access to irrigation, which has improved over the years through provision of tubewell connections, building of farm ponds/water harvesting structures and adoption of drip/sprinkler technology. Absence of flooding, mild temperatures with clear skies, and low pest and disease incidence during this period allows farmers to obtain yields higher than from the regular post-monsoon kharif season — maize in Bihar is a clear example. It is rabi, not kharif, that’s going to increasingly impart stability to India’s agricultural output.
Linked to all this is also an effective price stabilisation strategy. The lack of it is apparent from the same onions, which were retailing at Rs 100/kg in December, being dumped barely four months later by Maharashtra farmers at Rs 7/kg. The Narendra Modi government learnt the right lessons from the 2015 Bihar Assembly elections debacle by focusing on procurement of pulses and building a buffer stock. Today, it isn’t arhar, but POT (potato, onion, tomato) that is giving the ruling alliance the jitters. Production fluctuations are inevitable with climate change and irregular rainfall patterns. The way to manage them is not by banning exports and imposing stock holding limits in onions or forcing cold store owners to release potatoes deposited with them. The government should create a buffer stock of not just foodgrains, but even onion, potato, sugar, edible oil, milk powder and white butter, to enable non-distortive marketing intervention.
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