2010 Indian onion crisis
Encyclopedia
The Indian onion crisis describes the dramatic rise in the cost of onion
s across markets in India
. The crisis was caused by errant rainfall in the onion producing regions which led to a shortage of onion production. The crisis caused political tension in the country and was described as "a grave concern" by Prime Minister
Manmohan Singh
.
and Rajasthan
, and were responsible for bringing down the central government in 1980. India is the second largest onion producer in the world, after China
.
Forty-five percent of the onion produce in India comes from the states of Maharashtra
and Karnataka
. In November 2010, unseasonal rainfall in onion-producing regions such as Nashik in Maharashtra
delayed the arrival of onions in markets. In December, when fresh crop usually begins to arrive, onion shipments were reduced to 700 to 800 tons a day from 2000 to 3000 tons a day in New Delhi markets, raising the price of onion rose from to per kg in the period of one week.
. In late December, following government restrictions on exports, wholesale onion prices went down to per kg in metropolitan markets.
Along with errant rainfall, hoarding, official incompetence and price-ramping by traders have also been blamed for the crisis. The Times of India, in a back-of-the-envelope calculation
alleged that wholesale retailers and speculative traders in New Delhi
charged a markup of over 135%, taking in profits of over a day. The opposition Bharatiya Janata Party
blamed the crisis on policy decision on exports and imports. Responding to a call from the opposition, 20,000 people demonstrated on the streets of New Delhi to protest the price rise and corruption in the government. The protesters included women and children wearing garlands of onions to symbolize inflation in the prices of basic commodities.
Onion
The onion , also known as the bulb onion, common onion and garden onion, is the most widely cultivated species of the genus Allium. The genus Allium also contains a number of other species variously referred to as onions and cultivated for food, such as the Japanese bunching onion The onion...
s across markets in India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
. The crisis was caused by errant rainfall in the onion producing regions which led to a shortage of onion production. The crisis caused political tension in the country and was described as "a grave concern" by Prime Minister
Prime Minister of India
The Prime Minister of India , as addressed to in the Constitution of India — Prime Minister for the Union, is the chief of government, head of the Council of Ministers and the leader of the majority party in parliament...
Manmohan Singh
Manmohan Singh
Manmohan Singh is the 13th and current Prime Minister of India. He is the only Prime Minister since Jawaharlal Nehru to return to power after completing a full five-year term. A Sikh, he is the first non-Hindu to occupy the office. Singh is also the 7th Prime Minister belonging to the Indian...
.
Background
Onions are considered an indispensable ingredient of most Indian cooking, providing the pungent foundation for a thousand different curries and other dishes. Onion prices have been an important political issue: they were regarded as the decisive factor in the 1998 state elections in DelhiDelhi
Delhi , officially National Capital Territory of Delhi , is the largest metropolis by area and the second-largest by population in India, next to Mumbai. It is the eighth largest metropolis in the world by population with 16,753,265 inhabitants in the Territory at the 2011 Census...
and Rajasthan
Rajasthan
Rājasthān the land of Rajasthanis, , is the largest state of the Republic of India by area. It is located in the northwest of India. It encompasses most of the area of the large, inhospitable Great Indian Desert , which has an edge paralleling the Sutlej-Indus river valley along its border with...
, and were responsible for bringing down the central government in 1980. India is the second largest onion producer in the world, after China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
.
Forty-five percent of the onion produce in India comes from the states of Maharashtra
Maharashtra
Maharashtra is a state located in India. It is the second most populous after Uttar Pradesh and third largest state by area in India...
and Karnataka
Karnataka
Karnataka , the land of the Kannadigas, is a state in South West India. It was created on 1 November 1956, with the passing of the States Reorganisation Act and this day is annually celebrated as Karnataka Rajyotsava...
. In November 2010, unseasonal rainfall in onion-producing regions such as Nashik in Maharashtra
Maharashtra
Maharashtra is a state located in India. It is the second most populous after Uttar Pradesh and third largest state by area in India...
delayed the arrival of onions in markets. In December, when fresh crop usually begins to arrive, onion shipments were reduced to 700 to 800 tons a day from 2000 to 3000 tons a day in New Delhi markets, raising the price of onion rose from to per kg in the period of one week.
Aftermath
Wary of historical precedent, Prime Minister Manmohan Singh and his government responded forcefully by banning onion exports, lowering import taxes and by getting in shipments of onions from neighbouring PakistanPakistan
Pakistan , officially the Islamic Republic of Pakistan is a sovereign state in South Asia. It has a coastline along the Arabian Sea and the Gulf of Oman in the south and is bordered by Afghanistan and Iran in the west, India in the east and China in the far northeast. In the north, Tajikistan...
. In late December, following government restrictions on exports, wholesale onion prices went down to per kg in metropolitan markets.
Along with errant rainfall, hoarding, official incompetence and price-ramping by traders have also been blamed for the crisis. The Times of India, in a back-of-the-envelope calculation
Back-of-the-envelope calculation
A back-of-the-envelope calculation is a rough calculation, typically jotted down on any available scrap of paper such as the actual back of an envelope...
alleged that wholesale retailers and speculative traders in New Delhi
New Delhi
New Delhi is the capital city of India. It serves as the centre of the Government of India and the Government of the National Capital Territory of Delhi. New Delhi is situated within the metropolis of Delhi. It is one of the nine districts of Delhi Union Territory. The total area of the city is...
charged a markup of over 135%, taking in profits of over a day. The opposition Bharatiya Janata Party
Bharatiya Janata Party
The Bharatiya Janata Party ,; translation: Indian People's Party) is one of the two major political parties in India, the other being the Indian National Congress. Established in 1980, it is India's second largest political party in terms of representation in the parliament...
blamed the crisis on policy decision on exports and imports. Responding to a call from the opposition, 20,000 people demonstrated on the streets of New Delhi to protest the price rise and corruption in the government. The protesters included women and children wearing garlands of onions to symbolize inflation in the prices of basic commodities.