Where there are winners, there must be losers.

"For the first time, union government has imposed stock limits on traders across the country. To control rising onion prices, central government has banned export of onions with immediate effect." This is done to lower prices and keep consumers happy, but it is also a severe assault on farmers because they do not get a legitimate price for their crops. Onions and tomatoes are not insured against low prices through the Minimum Support Price (MSP), which is a government guarantee to buy 22 crops at a minimum price, including raw cotton, raw jute, copra and tobacco. Last year, MSP was extended to a group called minor forest produce (MFP). Artificially reducing prices of vegetables is so wrong because when there is a bumper crop prices crash below the total cost of seeds, fertilisers and pesticides, forcing farmers to dump their produce because they cannot recover the cost of transporting them to wholesale markets. This happens almost every year at different parts of the country. An analysis showed, "When wholesale prices are down, mark-ups are higher, and when wholesale prices are higher, mark-ups go down. This means that when farmers are getting lower prices, the benefits are not passed on to the consumers, whereas when prices go up, farmers are seen as the culprits, and attempts are made to bring down wholesale prices," wrote R Kishore. Not only does the government ban export when prices are high but it also "imports onions and 'dumps' at below import parity prices to 'tame' domestic inflation," wrote Prof Ashok Gulati. On visits to wholesale markets, Gulati found that "onion farmers get a mere 29 percent share of the consumer's rupee. The rest constitutes costs and margins of middlemen, with retailers apportioning the highest share". Farmers are forced to sell their produce to wholesale merchants at 585 government controlled Agricultural Produce Marketing Committees (APMCs), which are known as 'mandis'. "The APMC system was introduced to prevent distress sale by farmers to their creditors, to protect farmers from the exploitation of intermediaries and traders and to ensure better prices and timely payments of their produce through the auctions in the APMC area." But the effect has been the opposite. Mandis are controlled by several large traders and there is a complete mismatch in economic power between traders and farmers. Why not get rid of mandis and allow farmers to transport crops to parts of the country where prices are high? That will level prices and farmers will get what they deserve. Because state governments collect taxes on mandis and on the movement of farm produce across states. What is the point in taxing farmers to death and then handing out Rs 6,000 per year as dole? Because food and beverage prices constitute more than 50% of the consumer price index and the system gives politicians the power to suppress prices. Doling out taxpayer money earns the gratitude of poor farmers and buys their votes. Naked farmers are great for elections. Farmers and taxpayers lose, politicians win.