Prices could have been controlled had the Delhi government amended the Agricultural Produce Market Committee (APMC) Act and encouraged more players, Bahuguna said.
Onion prices had touched Rs 100 per kg last month and are still ruling at uncomfortable levels of Rs 60-75 per kg, while tomato rates have risen to Rs 80/kg adding to consumer woes.
"Unlike other places, prices in Delhi behave in a peculiar way. I do not understand the logic behind perpetual increase in prices. Price rise in Delhi is more of self-created," he said.
In case of tomato, there is no logic behind retail prices going up to Rs 80 per kg when production is good in growing states, he said.
Closure of wholesale markets in producing centres in the wake of Diwali should not have led to a "sharp increase in retail prices" of tomato in Delhi, he added.
"Had APMC Act been amended, a Meerut farmer -- who is currently selling tomato at Rs 20 per kg at his place would have come to Delhi and sold at Rs 40 per kg. If more players are allowed in mandis, there will be more competition and prices will automatically come down," Bahuguna explained.
Agri-marketing is a state subject. The amendment to the APMC Act would provide competitive environment in wholesale market by allowing farmers and private players to enter the agri-business, he said.
Bahuguna said onion prices are likely to come down significantly in the next 10 days with bumper late kharif (summer) crop expected to be harvested next month in producing states like Maharashtra.
Prices of onion are softening in other parts of the country, he added.