New Delhi: With onion prices skyrocketing, Centre Monday wrote to chief ministers of all states including poll-bound Bihar to take stringent action against hoarders and black marketeers to control rates of the kitchen staple.
Stating that the situation has "worsened" due to hoarding of onion by both retail and wholesale traders, Union Food and Consumer Affairs Minister Ram Vilas Paswan said the states should take action under the Essential Commodities Act and impose stock holding limits.
Wholesale onion prices at Lasalgaon in Maharasthra, Asia's biggest onion market, have almost touched Rs 60/kg, while retail prices across the country have risen up to Rs 80 per kg, adding to consumer woes.
As prices are ruling at higher level despite imports and restriction on exports, the Centre has asked the Maharasthra government to crack down on hoarders and black marketeers in various parts of the state to boost supply at Lasalgaon, which sets price trend across the country.
Concerned over the sharp increase in onion prices in the national capital, Paswan blamed the Aam Aadmi Party-ruled Delhi government for inadequate action against hoarders.
In the letter to Bihar Chief Minister Nitish Kumar, Paswan emphasised the need for strict implementation of the provisions of the Essential Commodities Act (ECA) and taking stringent steps against hoarding and blackmarketing.
The state governments have all powers to ensure smooth supply of the commodity, he added.
Paswan also urged the Bihar Chief Minister to use the powers entrusted under ECA to control rising onion prices and also impose stock holding limits to check hoarding.
The communique sent to the states today by the ministry came amid the issue of rising onion prices inviting trenchant criticism from opposition parties.
Briefing media after reviewing the onion price situation here today, Paswan said state governments should take action against hoarders to rein in prices and assured that steps taken to import and curb exports will help control the rates.
"There is a production shortfall of only five lakh tonnes in the country. Hoarders get active when there is production fall. The state governments should take action against hoarders to control prices," Paswan said.
Terming price rise in onion as a temporary phenomena, the Minister said there is no shortage as such in the country but hoarders are trying to take advantage of the situation.
To check rising prices, the Centre has asked MMTC to import 10,000 tonnes of onions, which is expected to arrive by September 10. It has also raised export price sharply.
That apart, central agency SFAC and Nafed are supplying onions at subsidised rate in Delhi markets below Rs 40/kg.
Onion imports by private trade from Afghanistan via Attari-Wagah land route in Punjab have picked up.
The country's total onion output is estimated to be at 189 lakh tonnes in 2014-15 crop year (July-June), slightly lower than 194 lakh tonnes in the previous year.
On sharp rise in onion prices in Delhi, Paswan said, "Last year, adequate measures were taken against hoarders but this time the state government has not taken enough steps."
During 2014 monsoon when onion prices had risen, Delhi was under the President's rule and was governed by Lieutenant Governor Najeeb Jung.
He also said the passage of Goods and Services (GST) bill could have helped in controlling onion prices.
To rein in prices, Consumer Affairs Secretary C Vishwanath said, "We have written a letter to the Maharasthra Chief Secretary expressing concern over rising prices. We have asked to send officials to Lasalgaon to check onion availability and take adequate measures against hoarders."
At Lasalgaon mandi in Maharashtra as well as Azadpur mandi in Delhi, onion prices are ruling at around Rs 60/kg.
"Onion prices are continuously rising and today touched Rs 60 per kg in the wholesale market despite increase in supplies as onions from Afghanistan and Pakistan are also entering the market," Azadpur Mandi Onion Traders Association President Surender Budhiraja said.
Onion prices could have been brought under control had state governments taken advantage of the Centre's price stablisation fund (PSF), sources said.
Under the PSF, states are required to procure onion for release in the retail market at subsidised rates to check prices. The difference in price is compensated by the Centre.
"We have told them that instead of the subsidy route, they should opt for way out available through PSF. Unlike the subsidy route, the PSF will ensure that there is no leakage and scam," a source in the Food Ministry said.
The PSF, which functions under the Agriculture Ministry, was taken last year under which a sum of Rs 500 crore was allocated. The guidelines of the PSF were finalised in March- April and circulated to states a few months back.
