Onion Prices in India
Autor: nocandonoob • September 8, 2016 • Case Study • 258 Words (2 Pages) • 705 Views
1.
• Decrease in supply
o Fundal diseases purple anthracnose and purple blotch.
o Severe weather, extended monsoon season
Increased spread of fungal diseases
40% damaged yield
o Poor reserves due to lack of storage facilities
• Increase in seasonal demand
o Dec. Jan Wedding season.
o Holiday Season; Christmas, nye, maka sankrati
• Effect of speculation
o Hoarding by intermediaries
o Increased purchasing by consumers as concerns of supply became evident
• Government Policy
o Minimum export prices significantly higher than domestic market prices, therefore less incentive to sell locally
o Slow response to increasing min. export prices after recognizing effects of decrease supply due to crop diseases.
2.
• Problem for Indian citizens of all social strata. Onions are a staple of Indian diet and increases in commodity prices effect all.
o Political sensitivity to increase in onion prices as demonstrated in elections during the 80s, so politicians are affected.
o Onion subsidies increased government spending and was onerous for taxpayers.
3.
• Government ensures base level compensation to farmers so that supply remains stable.
o Government
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