"International markets too are short of onions"

It is not true that prices of all essential commodities have risen all over the country. The prices of rice, wheat and sugar, which are disbursed through the public distribution system (PDS), have remained stable. Only the prices of perishable commodities like vegetables have risen, mostly due to bad weather conditions. The onion crop was badly damaged due to rain just before the harvest. Similarly, thedamage done to tomatoes and potatoes has resulted in a downfall in their production and, therefore, a rise in their prices.

Is only bad weather responsible for the price rise and not hoarding and middlemen?

Of course, hoarders and middlemen too contribute to inflation, especially when a particular commodity becomes scarce, but their role in raising the prices of vegetables like tomatoes and onions, which do not have a long shelf life, is limited. We have not received any specific report of hoarding of vegetables. Necessary action has been taken against hoarders wherever detected.

But why does a rise in the price of vegetables have a cascading effect on prices of pulses, salt and other edibles?

Only a farmer understands the real cause of the rise in prices. City people cannot understand the agony of a farmer whose crop has been damaged. Just imagine the plight of farmers in Punjab whose entire onion crop has been damaged. The degree of damage to onion crop is different in different areasin the country depending on the extent of rainfall there. Similarly, the pulse crop too has suffered due to inclement weather. Urban people can only crib about high prices without giving a thought to problems of the farmers.

When do you think vegetable prices will stabilise?

It’s just a case of demand and supply. Rates will come down as supply improves. And supply has already started improving in Delhi. Onion rates in Delhi’s Azadpur Mandi have come down from Rs 35-40 a kilo to Rs 25-28. The late kharif crop of onion has started arriving from Maharashtra and Gujarat. Besides imported onion too is improving the supply.

There were allegations that onion could not be imported by NAFED for about three weeks (till October 8) even after specific orders had been issued by the Prime Minister’s Office (PMO) on September 19, because the Ministry of Consumer Affairs headed by you held back clearance.

I do not remember the dates but I can assure you that the delay was not due to us. The file musthave been cleared the same day it reached my office. The rumour-mongering is being done by NAFED Chairman Ajit Kumar Singh, who is a Congress leader. The Congress wants to take advantage of such rumours in the forthcoming elections. Just see how Congress-fed rumours on salt resulted in panic buying in some parts of the country. But do you know why nobody is importing onions even when they have been kept in the Open General Licence (OGL) for imports? Only because there are not enough onions available even in international markets!

What is the Government doing to stem the current price rise? What was the outcome of the ministers’ meeting the Prime Minister recently convened?

The Government can only ensure a better supply of essential commodities. And that we are doing by ensuring the tax-free import of pulses, onions and edible oil. The meeting chaired by the Prime Minister was meant to ease the process of imports.

Can’t the Government let the law of supply and demand prevail in thissector?

We can’t do that because we have to protect farmers’ interests as well. Last year there was such a glut of potatoes due to over-production that farmers had to dump the vegetable which could not be kept in cold storage. This made them cut down on the potato crop this time, which resulted in the scarcity of the vegetable this year. But if we allow free imports, rich countries would dump their produce in India at such low prices that there will be a glut and farmers won’t get a good price for their produce. Similarly, free export too can result in artificial scarcity of essential commodities in the country.

After vegetables and pulses, there are reports we may face a similar rise in sugar and rice prices…

Let me assure you that there is no shortage of either rice or sugar in the country and there is no impending crisis. This despite the fact that lot of the paddy crop has been damaged due to recent rains during the harvest season. Only three days’ rain damaged some 20 lakh tonnes ofpaddy in Punjab alone. Moisture content has increased in the paddy, the colour of the rice grain has changed to pale yellow, the grain has shrunk in size and such rice gets broken easily during processing in rice mills.

What have you done to ensure that farmers do not suffer losses due to the poor quality of rice produced this year?

The Food Corporation of India (FCI) has relaxed its rice procurement specifications from usual 3 per cent damage to 8 per cent this year to ensure that farmers do not suffer a loss especially since only a few will be able to export their produce.

How do you think the FCI handled the paddy crisis, specially since it does not have enough storage capacity?

After the relaxation of procurement specifications, the FCI will be able to fulfil its requirement while at the same time providing for weather-hit paddy farmers. Of course there is not enough covered storage area for the FCI to keep its stocks, which is why it uses tarpaulin to cover its procured stocks. Thenthe FCI also keeps disbursing its stock through the PDS. But there is certainly need to enhance its storage capacity from the present level of 57 lakh tonnes.

What about sugar? Sugar mills haven’t started rolling yet because they say the recent rains have diluted the sugar content in the cane and crushing was not economical at this juncture. Won’t one month’s delay hit production?

No. I am sure the sugar mills will crush the quota of sugarcane contracted by them. In any case, only 40 per cent of the total cane produced in the country goes to mills, with the remaining being despatched to the khandsari (cottage industry producing low-quality sugar and jaggery). Sometimes khandsari owners pay a better price to farmers than even mill owners. We have buffer stocks of sugar to tide over the crisis if there is one.