Lok Sabha Question No. 3660 (UNSTARRED), answered on 2019-12-10
Subject: Hike in Onion Prices due to Cartelisation
Ministry: CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION
Asked by: Gangasandra Siddappa Basavaraj

## Government of India

## Ministry of Consumer Affairs, Food and Public Distribution Department of Consumer Affairs

## LOK SABHA UNSTARRED QUESTION NO. 3660

TO BE ANSWERED ON 10.12.2019

## HIKE IN ONION PRICES DUE TO CARTELISATION

3660.  SHRI G.S. BASAVARAJ:

## Will the Minister of CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION miHkksDrk ekeys] [kk| vkSj lkoZtfud forj.k ea=h be pleased to state:

- (a) whether the Government has examined the reasons for the sudden and steep hike in onion prices, dampening the festive spirits in times of Diwali festival;
- (b) whether it is a fact that the Consortium of Indian Farmers Associations (CIFA) and a study by the Competition Commission of India-the consumer welfare watchdog-have found that cartelisation and the traders are jacking up the prices; and
- (c) whether  the  Government  has  considered  disciplining  the  trade  by  cracking  down  on  the vicious network of middlemen, whole sellers and pseudo-farmers who see windfall profits in the hoarding game and if so, the details thereof?

## ANSWER

## miHkksDrk ekeys] [kk| vkSj lkoZtfud forj.k jkT; ea=h ¼Jh nkuos jkolkgsc nknkjko½

## THE MINISTER OF STATE CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION (SHRI DANVE RAOSAHEB DADARAO)

- (a)  :    During 2019-20, there was a 3-4 weeks delay in sowing as well as decline in sown area of the  Kharif  onion  because  of  late  arrival  of  monsoon.  Further,  untimely  prolonged  rains  in  the major  growing  States  of  Karnataka,  Maharashtra  and  Madhya  Pradesh  during  the  harvesting period,  i.e.,  September/October,  caused  damage  to  the  standing  crops  in  these  regions.  All  this adversely impacted production and quality of the Kharif crop. The rains during September/October also affected transportation of the crop from these regions to consuming areas. This led to limited availability of Kharif onion in the market and put pressure on its prices.
- (b)  : A study in the competitiveness in the major onion markets - Maharashtra and Karnataka titled  'Competitve  Assessment  of  Onion  Markets  in  India'  was  conducted  by  the  Agricultural Development  and  Rural  Transformation  Centre,  Institute  for  Social  and  Economic  Change, Bengaluru,  for  the  Competition  Commission  of  India.  The  report  inter-alia  observed  that  onion price  increase  in  December,  2010  was  not  simply  a  demand  and  supply  problem.  The  report  is available in public domain at https://www.cci.gov.in/sites/default/files/AO.pdf.  However, CCI had conducted an inquiry relating to unusual rise in price of onions in December 2010 - January 2011. Accordingly, the Commission has passed final order u/s 26(6) vide order dated 10.04.2012 in a Suo-Moto  Case  No.  01/2011.  The  case  was  closed  by  the  Commission  due  to  absence  of  any evidence of collusion or cartelization among the traders/Commission agents or any other players in the supply chain.
- (c)  : Government, on 3 December 2019, reduced stock limits on traders across the country to 50 quintals on retail traders and 250 quintals on wholesale traders under the Essential Commodities Act,  1955.  Further,  Government  of  India  has  urged  State  Governments  to  hold  regular  meetings with the traders of Onions at State and District level to prevent hoarding, speculative trading and profiteering, unfair and illegal trade practices like cartelling, etc.

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