Coal reform to check onion prices

Imports of onions could offer temporary respite, but we need durable ways to curb price swings in onions and other perishable kitchen staples. Today, farmers who cultivate vegetables see over 40% of their produce perish before it reaches consumers. Wastage will come down when cold chains and the transport network to move perishables to markets get built.

Uninterrupted power supply is the key to running cold chains efficiently. But the country is power-starved, thanks essentially to huge shortage of coal, in spite of having some of the world’s largest reserves of coal. So, the government must fix policy in coal. It should denationalise coal and scrap Coal India’s monopoly over mining it.

Opening up coal mining and trading to the private sector will boost supplies, and let power plants supply cold chains. However, pending legislative action, Coal India’s subsidiaries must be freed to compete amongst themselves.

The politics of free power and failure of regulatory authorities to stamp out power theft and allow the needed hikes in tariffs have eroded the power sector. So, reform to make the power sector viable brooks no delay.

States should also take strong measures to curb volatility in food prices. They must amend the Agricultural Produce Market Committee Act to exempt perishable commodities and also encourage efficient value chains that connect farmers directly with retailers, cutting out the middlemen. Promoting the use of, say, dehydrated onions that can be stored in large quantities for a longer time can help stabilise prices.

Investment must be stepped up in processing technologies for other vegetables, fruit and eggs, given the surge in consumption of superior foods by the poor. But agro-processing industry also depends on availability of power.