Onion — The multi utility commodity which acts as a base for best known delicacies across the world. In simpler words, it acts as a support system for majority of dishes worldwide. In India, just like every other product, there is a twist to the tale. Onion has seen the rise and decline of state and union governments — The world’s largest democracy got driven by ONION. In 2010, the sides have reversed. UPA now faces the heat of this Onion FRY !!
The best part has been the indifferent Agriculture minister. Absolutely firm on his previous statements, “THE PRICES ARE GOING TO BE UP FOR THE NEXT **** DAYS” The only change he does is in the number of days. Everything else is STATUS QUO for the NCP veteran.And it isn’t just the Onions — All commodities related to the Common Man have been drifting away from their reach at a pace faster than development of our country. It is not just the Agriculture Minister who can be held for the mess (though he is majorly accountable), as there are a lot of subsets in the Inflation of Agricultural commodities across the world. The Finance Minister blames it on the shortage of essential items and the disparity in the Supply and Demand as well. Enjoy, the WORSE is yet to come.
The demand situation is not expected to reverse in the near future as more developing countries attain higher growth. If this rapid growth continues, it will continue to put upward pressure on food commodity prices. Secondly, if petroleum prices continue to rise, costs of agricultural production will rise as well the cost of processing and the cost of transporting products to the markets both within the country and to foreign markets. Thirdly, continued high petroleum prices will also sustain the global incentives to produce more bio fuels. Fourthly, as economies move up the development curve and progress on urbanisation there will be a continuing compulsion of converting agricultural land to non agricultural use, even if small.
While measures such as export restrictions, price controls, price supports, optional food grain reserves etc may yield some results only in the short term, a much more integrated and holistic approach is required for addressing the long-term demand supply balance in food commodities. Despite the availability of the second largest arable land in the world and ample sunshine, India’s food grain production is facing a stagnation in all aspects, that is area under cultivation, production and productivity.
The acute and continuing fragmentation of Agricultural land leading to marginal farming which poses severe challenges to the last mile delivery of inputs such as seeds, fertilisers and deployment or productivity enhancement interventions and; sustained erosion of the natural resource base including problems like soil acidity, soil erosion and micro-nutrient deficiency and declining water tables across regions. More importantly, there are major questions surfacing about the economic viability of farming per se leading to pressures for conversion of agricultural land to non-agricultural usage.
The government should come out with a legislation allowing agricultural land to be leased on long tenure basis say ten years and the agri land to be leased by the farmers without alienating their ownership rights in order to protect ownership of their farm lands. The availability of water for agricultural usages will become gradually even more difficult as water tables decline. Emphasis should be on development of irrigation infrastructure and bringing more land under irrigation on one hand and on other hand developing better water management with emphasis on watersheds, rainwater harvesting and ground water recharge.
Most importantly and on an overall analysis, agriculture needs to become a more remunerative economic activity that in turn will automatically induce productivity enhancement measures. This requires interventions in a whole range of areas including reforms and infrastructure enabling connectivity to markets, establishment of a wide range of “agri focused” infrastructure, appropriate financing and risk cover mechanisms. As an Indian, I strongly believe that the government should act RIGHT NOW. We are already running late in the recovery and prevention mode. The Damage has already been done but is still under control but soon it shall be too late.
JAI HIND !!