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Onions Bring Tears To India's Congress Party

India's Congress Party that has frequently capitalized on food prices may be beaten at its own game.
By Amiel Ungar
First Publish: 1/20/2011, 6:11 PM / Last Update: 1/20/2011, 6:05 PM

In recent elections the Indian Congress party has battled its main opposition, the Bharatiya Janata Party (BJP) over the issues of Pakistan and the Hindu-Muslim rift. As India faces two major state elections, Indian politics has come down to the more pedestrian issues of  food prices and corruption.

Indian Prime Minister Dr. Manmohan Singh performed a minor facelift on his cabinet, slightly demoting ministers who were under fire, but not ejecting them completely. Thus Sharad Pawar, who is taking heat for failing to bring down food prices (that the Prime Minister now predicts will fall in March), lost the Ministry of Consumer Affairs, Food and Public Distribution but remains ensconced in Agriculture. Kapil Sibal will remain as Telecommunications Minister, which is only fair since he has only been on the job since November when his predecessor, A. Raja, was forced to resign after it was discovered that cell phone frequencies had been sold at markdown prices costing the state treasury up to $31 billion.

Congress, although traditionally led by elites, has prided itself in looking after the common good. It now must cope with a spike in food prices and other goods with annual inflation running between 17% for food and 23% for nonfood articles. Inflation overall exceeded 8%. The government has attempted to show its determination to fight inflation by regulating exports and imports, urging states to abolish taxes on food stuffs and taking action to combat hoarding.

The symbol of the inflation has been the price of onions and the opposition has turned this into its signature issue in rallies across the country. Onions, a staple in the Indian diet, are currently on sale in the capital Delhi and other northern cities at 70 rupees ($2) a kg, up from 30 rupees a few weeks ago. Enterprising merchants are using onions to lure customers into buying television sets, automobile tires etc.

If the opposition will be able to use onion prices against the Congress party, it will consider it poetic justice because Congress  used onion prices when it was in opposition to defeat the BJP in national and state elections. Public opinion polls show that if national elections were held today, Congress would lose its majority in the Indian Parliament.

While the government would like to blame the onion shortage on bad weather, it is acknowledged that the agricultural sector has been neglected in terms of investment and technology. This may change as a result of a new Indo-Israeli project called the Center of Excellence for Vegetables that Agriculture Minister Pawar inaugurated today. The Agriculture Minister said it was necessary to replace India's "low productive style of vegetable production, by introducing modern agricultural techniques such as those adopted by Israel". 

By adopting Israeli methods, Indian agriculture would be able to use less water, less pesticides and less arable land. Restoring the balance between supply and demand could provide an answer to the recent shortages.