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India’s Pathetic Food Supply Chain leads to 30% Wastage and Soaring Onion Prices which now equal Average Wages

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India’s Agriculture Sector account for only a minuscule percentage of GDP and growth,however most of India’s population continues to depend on it.Despite rapid growth of the services and industries sector as globalization leads to assimilation of foreign technology and practises,agriculture continues to live in medieval times. India’s Food Supply Chain leads to massive waster and inefficiency with 30% of India’s vegetable and fruit produce being wasted.This is criminal in a country where most of the children go hungry.However corporatization has been repelled by vested interests leading to a the sorry situation.Food inflation has seen double digits since last year and despite a better harvest year,some food prices are touching the stratosphere.The inadequate supply chain leads to periodic shortages of key food items used by Indian as part of the daily diet.

Onion prices have hit around Rs 70-80/kg which is is  equal to the average wage of $2 for 80% of the Indians.This has surprisingly caused consternation amongst the political classes who have clamped down on exports.Around 10% of India’s 12 million ton onion production is exported and has seen exports growing to around $500 million in 2010 up by almost 5x in the last 5 years.Can’t understand why a nation which sees so much hunger and starvation needs to export so much.The Indian government food policy is mostly adhoc and driven more by vested interests rather than any strategic long term policy.Out of the 5400 cold storages in the country almost 90% are owned by private investors which indicates the government’s lack of investment.India’s nodal agency for distribution of agriculture FCI is known for its endemic corruption and massive ongoing scams (which as usual leads to no prosecution).The Indian growth story keeps being celebrated in popular media even as crushing income disparity becomes wider and wider.

Onion prices to come down only in 2-3 weeks

Even as it faces the heat of skyrocketing prices of onion which is ruling between Rs 70-80 a kg, the government on Tuesday said any respite to the commoner from the high rates may take 2-3 weeks.The prices of onions have soared to Rs 60-70 per kg in retail markets in Delhi and many other important cities of the country from Rs 35-40 just a few days ago.

We hope the voluntary suspension of exports, raising of minimum export price and retail sales by Nafed and NCCF will definitely have a correction on prices,” Mr. Chopra said.Onion production stood at around 12 million tonnes in 2009-10 fiscal, out of which 1.9 million tonnes were exported.In 2010-11, production in Kharif season is estimated at five million tonnes.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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