Recent News

Onion Prices Play Key Role in India Vote

NEW DELHI—India is struggling with a plunging currency, decrepit infrastructure and government corruption. But at the top of the pre-election agenda now: the price of onions and wheat.

On Tuesday, a day after India's lower house of Parliament passed a sweeping food-aid bill that would guarantee subsidized grain for nearly 70% of the country's citizens, the upper house was busy debating the cost of onions.

The Politics of Onions

Junho Kim/The Wall Street Journal

Onions for sale at the Bharatiya Janata Party office in Delhi's Shahdara neighborhood

The Food Security Act and its provision of cheap rice, wheat and millet is at the heart of the ruling Congress party's policy agenda. Onions, on the other hand, have become a rallying point for the opposition Bharatiya Janata Party or BJP.

Prices for onions, ubiquitous in Indian cooking, have jumped this month, jumping 90% to about 55 rupees (85 U.S. cents) a kilogram (25 rupees a pound) from 29 rupees a kilogram in a matter of weeks.

Every day now, Bharatiya Janata campaigners sell thousands of kilograms of deeply discounted onions at sites across New Delhi to locals grumbling about the government's inability to keep prices in check.

"Food affects every election, sometimes less, sometimes more," said B.G. Verghese, a visiting professor at the Centre for Policy Research in New Delhi. "Millions of Indians go to bed hungry every day."

India, with its 1.2 billion people, is home to 25% of the world's hungry, according to the United Nations, and a third of its poor, according to the World Bank.

On a recent afternoon, BJP activists were doing a brisk trade in onions outside a party office in Shalimar Bagh, a residential neighborhood in the northwest of the city.

The men, all dressed in the starched white clothes that are the uniform of India's political class, stood behind a table equipped with scales and laden with gunny sacks full of onions. "Thirty-five rupees! Thirty-five-rupees!" they called.

The price, more than 33% off the market price, drew quite a crowd. They gathered in front of party placards that decried the rising cost of foodstuffs and said: "If you want to change Delhi, change the government."

Asha Rani, a 57-year-old house maid, feeds an extended family of 16 by cleaning up to 10 houses a day. She bought 2 kilograms (4 pounds) of onions.

"My grandchildren immediately spot if they are served food without onions. They find it tasteless. They won't eat food without onions," she said. "What does the government want the poor to do? Should we stop eating?"

Mukhtar Abbas Naqvi, a BJP spokesman, said the onion sales aren't meant to win votes. But he did acknowledge onion prices are a convenient weapon to use against the government. Besides, he said, Congress's push for the food-security bill ahead of regional elections at the end of the year and national polls due before May "is only to benefit them in elections."

The food-security bill is a historic opportunity to eradicate hunger and malnourishment in India, said Congress Party President Sonia Gandhi during Monday's debate on the bill. "The question is not if we can do this; we have to do this," she said.

The BJP knows firsthand how important the price of onions is to the Indian voter. The party lost power in several state elections in 1998, in part due to skyrocketing onion prices. That year, onion prices jumped in Delhi a month before the vote. Then, as now, the BJP sold cheap onions. But the rival Congress party won a landslide victory and the BJP went from 67 seats in the state legislature to 15.

Promises of cheap food long have played a pivotal role in winning Indian elections. In the early 1980s, the actor-turned-politician N.T. Rama Rao won re-election promising to provide poor people rice for two rupees a kilogram.

In 2006, in the southern state of Tamil Nadu, local party Dravida Munnetra Kazhagam won an election after promising every family a color television set and rice for one rupee a kilogram.

Its rival, the All India Anna Dravida Munnetra Kazhagam, went further in the 2011, offering 20 kilograms of free rice a month to families with a ration card. Around 85% of households in Tamil Nadu have a ration card.

The state's subsidy bill for rice alone is 45 billion rupees ($701 million) in this year's budget.

For onions, prices fluctuate based on supplies from the summer and winter onion-growing seasons. Winter yields longer-lasting onions. If the winter harvest is poor, the onion supply goes down and prices spike.

To soften the blow—on households and politicians—India's central government is looking for ways to prevent hoarding. It is even looking to archrival Pakistan for extra supplies.

"This cycle happens every three or four years," said N.K. Krishna Kumar of the Indian Council of Agricultural Research.

Original Link...