Onions: Retail chains can do what the govt can't

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New Delhi, Aug 21: The onion story in India perhaps leaves an important lesson for the government to learn from the big retails and for politicians in general who oppose things like foreign direct investment.

Outlets like Mother Dairy, Easy Day, Spencers, Big Bazaar and others have been buying the vegetable directly from the farmers, hence eliminating the middlemen's profit margins. Can the government learn a trick or two from the organised retail sectors?


Organised retails have succeeded in holding onion prices at Rs 50-55 per kilo in recent days while the same is being sold at Rs 80 a kg at local shops. Retail authorities in cities like New Delhi and Bangalore said that they have succeeded in keeping the prices under check because they buy the produce directly from the farmers and hence minimise the scope for the middlemen who hoard onions for better profits and create an artificial scarcity. Even in times of poor yields, the direct procurement helps the prices to be kept under check unlike in the open market.

The modern retailers are attracting more footfalls by selling cheaper onions and other vegetables while the government is facing serious flak on the streets. Is there a huge scope to improve the management capacity of the government?

Instead of debating whether the entry of MNCs will harm or help the domestic producers in the economy, why don't the political leaders put into a place a smooth demand-supply mechanism by means of eliminating the obstacles? Or if they can't, can they leave it for the retail chains to take over completely?

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