The journey of an Indian onion

That was the subtitle of a recent article in The Economist.  The article tracks the path of an Indian onion from farm to consumer, and in the process reveals a badly antiquated food system in that country.  It also shows how much we consumers in the developing world take for granted.  

There are huge opportunities for efficiency gains associated with storage, transportation, and economies of scale but, as the article reveals, various Indian policies have, to the detriment of Indian consumers, kept out firms like Walmart, Carrefour, and Tesco who have the capacity and know-how.  

According to the article:

wholesale onion prices soared by 278% in the year to October and the retail price of all vegetables shot up by 46%. The food supply chain is decades out of date and cannot keep up with booming demand. India’s rulers are watching the cost of food closely, too, ahead of an election due by May. Electoral folklore says that pricey onions are deadly for incumbent governments.

A year ago it seemed that India had bitten the bullet by permitting foreign firms to own majority stakes in domestic supermarkets. The decision came after a fierce political battle. Walmart, Carrefour and Tesco have been waiting for years to invest in India. 


On the ground little has happened. Foreign firms complain of hellish fine print, including a stipulation to buy from tiny suppliers. Individual Indian states can opt out of the policy—which is unhelpful if you want to build a national supermarket chain. In October Walmart terminated its joint venture with Bharti, an Indian group. India has reduced the beast of Bentonville to a state of bewilderment. Tesco has cut expatriate staff

People in the developed world like to complain about Walmart, but I think it says something that any of us would be stunned if we walked into one of their stores and were asked to pay more than a buck or so for an onion.  And, we'd be completely perturbed if there were no onions for sale.  Rarely do we stop and think about the process (and the companies) that have led to such "unnaturally" high expectations.