Government is paranoid about onions - especially during election seasons. Between 2014 and 2019, the government changed the rules on onion export 17 times, more than three times a year on average. It’s true that governments have fallen due to steep rises in onion price. But it is also true that this was not the only reason for the electoral debacles of the past. This reason was one among many - though most pronounced to the naked eye. There was high inflation. Prices of most of the eatables were soaring. Coupled with general inflation, there were other issues of dissatisfaction by the general voters. Had it been only onion, the presumption could have been closer to reality. Paranoia of voters' wrath sees no reasons. 

 

And we had another ban with Bihar elections round the corner.

 

Such bans have never helped in the past. And they wont help this time either. We have had heavy rains in August. Onion harvest is affected. This ban would arrest the price rise. However, no super-computer could exactly predict the exact quantum of price control or duration of this control by this ban - leave alone our desi mandarins. Miscalculations are common. No matter how the pendulum swings, nobody will be happy. Farmers will hate this. Their chance of making up the losses of the oversupply time is denied to them. Consumers will still be angry if the prices soar despite this ban. This is very likely when there is excessive crop damage that can not be made up by the ban alone. It's a complete lose-lose situation for all. The answer lies in completely opening up imports, while not disturbing your exports. Prices would equalise automatically by the market forces. Farmers will be happy. Consumers will be happy. Traders will be happy. And so will be the government.  But paranoia harbours no reason. So we would have to face the trauma of this onion ban. And this will not be the last. The government of the day ignores very important factors. Exporting is not easy. The buyers have choices. Price is not the only factor. Stability, reliability and quality count. Such bans kill our export markets. Export bans also cripple trading, shipping, logistics, transports, and related industries with a chain of job losses and loss of wages. Let’s hope that in the future good economics shows the ways to good politics and our government gets over this paranoia.