It is only rational to expect the trade to resort to stocking in times of shortage. But the panicky consumer too has exacerbated the situation by hoarding onion and potato, that is, buying these in excess of normal requirement. The shortfall in supplies in the market has, therefore, got exaggerated. This, in turn, has given an extra fillip to prices. Thus, there are three facts: supply shortfall (unestimated), trade manipulation and consumer overbuying. The government can hardly be blamed for the supply shortfall, but it has contributed to the scarcity psychology by talking aloud about steps to mitigate the unquantified shortfall, resorting to subsidised sale of onion, and announcing import programmes and export bans. The government has, in effect, signalled a crisis. The high-profile electronic media could not ignore the long queues for subsidised onion in Delhi. This only lengthened the queues, with the urban underclass buying subsidised onion as agents of the petty retail trade. Other vegetableprices have risen in tandem.

It may be that the government lost its cool because of the elections due in late November. Perhaps, the BJP and its allies, lacking experience in administration, thought it enough to proclaim that they would protect the consumer. By early September, it was known that vegetable supplies were not what they should be. That was when export bans and import arrangements should have been firmed up without fanfare -- by getting Nafed quietly into the act. The strategy should have been to take domestic trade by surprise. Instead, the government has talked itself into a crisis.