Competition Commission of India
Suo-Moto Case No. 01/2011 (In Re: Rise In ... vs Unknown on 10 April, 2012
g'A}'\3J_\'dvu\\n?A.'\\3|'.'. 3 BEFGRE THE C€3MPE'§§T€I)N €€}MMiSS¥C3N CF ENQEA Sumnmcstu Case ?*éMs3.£€}i!2A{T311 ' 'K5,! 9. r, " I Dat.ed:-- {<3 #3/£.f'""*'*i '€*""J2""' in Re: Risa in Cmicsn Prices Qrder under secticm 25%} 91° the Ccsmzsetitkm Act, 2332 The present matter refates ta unusua¥ rise in price 0%' onions in December 2818 ~ January 2011, sua--mr;«tu cognizance of which was taken by the C<:>mmiss§<:»n.
2. The facts of the case, in t:n'§e'E, are as under:--
2.1 The Commisséicm tmisk mate csf repcsrts gmbiished in various newspapers indicating unusua! rise in prim'-3' Q? anions during the month of D5:::ember 203.0, As per an artide pubiishrad in the 'Times of mam' dated 20.12.2010, anion: price had soared to abmst Rs. 6C1--?Cl per kg in. retaii market in Deihi and Rs. 35410 in many anther important cities <32' the country in December 2010 as. comgnared in the previous few weeks. it had aisa been reported therein that these sky m::ke:ting prices were due to heardirsg and apecuiatitm by the traders. in another articie dated 23.12.2010 pubiishefed in Wafl Street Joumat under the heading ' Endia Food mfiaéticm Rises', quoting the statement af Shri N. R. Bhanumurty, an economist at National instiégute tn" Fuhrer; Finance and Poéicy, it yaéf fi3..'\ '\\ 5»?
2.2 Further, as per the statement appearing in 'Ecomsmics Times' dated 86.01.2031 tn" Mr. Kaushik Besu, Chée'? Econernit: Adviser in the Ministry of Finance, it was stated by him that "there are forms of impiicit matte! working atnwong traders that biecit the movement of new entrwg, the appearance of new gc:§a\,fers".
2.3 Beta as regards prevaiiing prices and suppties of the cmicms in Azadpur §VEa..ndi, Delhi were aneéysteti. Data was also ebtained fmm E:gmez'knet.nEc.in, whictiw reveaied unusuai, sudden and abrupt rise of amine prices "m the me.ri~;et which were met found tcs be prime-'facie expiainabiet by the nermai effecting demand and suppiy. it was suspected baeecfi on the news paper reports that there were forties and factors other than demand and suppty Eike earteis operating in the market, which were behind the riee in omen prices.
3. The Commission stcmsidered various media reports and data as atmve in its meeting heid on 06.81.2011 and having; come to the mnciusicm that there exists a ,win'm-fecie case, referred the matter to the Dhectcsr Genera? {DE} under section 2641} of the Competititm Act, 2302 {'the Act') fer investigaticm.
5:. After' receiving the directicms dated Q5.C¥1.2U1.1 oflihe Cantmissiers amder :;ec.'ticm 2&1}, D6 investigated the matter and submitted his énuestigation repczrt dated Q5.Q4,2{33_1 to the Cornrnission.
§. Eawestigatécm and Fimfiinegs by 38 5.1 On receipt at directiena tram the Commission, DG ttonstittited a team of prefessioneis for ctstndtzcting investtgation of various iesues invcslved in the matter. Fieiti visits were undertaken by the team in erder to ascertain the mudus operand} of oniotn trading in ti§r'fe:'t=:nt markets in incfis. The team visited the the «:wmrnis;5icm agents to the whoiesaie trefers for fleet sate its the consumers threugh retaii traders. Primary as weii as s<=:t;eradars,»' data pertaining ta prices, production and arrivai figures: at omen were caiiected by the team from the ziesignated agencies; such as Agricutture [P-rotiuce and Mar£<e'ting Cemzrxittees {APMCE3} tn' Leaaigatm, Pimpaigatm and Azattpur. Sesidesj detafiis in respect of prices and arriivais of onions were ceiiettted from different government agencies, viz; Natienai Hmtieuiture Research Devetepment Feumiaticzn (NHR{JF}, Nationai Horticulture Esoard {NHB}, Department at Consumer A'ff'airs, Govt. ef indie, Nationai Agricuiture Ceepetrative Eviarketing Federation of indie {NAFED}, Beth':
State Aegricuiture Marketing Bezsard, agrimar§zet.nic.irs either thmugh their websit.es or by writing to them. Questionnaire survey was aiso ccsnducteei among same retaiiers to knew their response on the issue.
5.2 it was gathereci by {)6 that verieus fieid units of Enceme Tax {Department had Conducted income tax surveys under the reiexrzmt provéséens of the inceme Tax Act, 33361 in erder to esmttein whether in ceurse at theér preceedings the Department had unearttaed evidence of any agreement among the traders, cemmisséen agents te raise the prices and afise whether the Department ceuiti firzci (mt énstances of hoarding 0'? onions by the traders. The mtceme Tax Department was aiso requested to respend to the pessibie teastms fer unusu-at rise in prices of omen during the period based upcsn their findirtggs and euttteme of the SU'i-'VEYS contiucted by them' 5.3 Whfie conducting investigation, DE examined the charatzteristics Bf enien crap produced in different parts cf tin-die. It has been m'ytet.§ by {)6 that onien i5 mainly grown during Rabi season which is generefly stored for tconsumptéon up to the month of Gszteber--November. Howtexrer, in some parts of the eotmtry, it is aise gmwn during Kharif and Late Kharif seeaen, White Rabi trap is harvested in Aprtiivlune, txiharif crop and Late Kharif @;;e_g5s are harvested in the months of 42» 5.4 US has stated that mien is harvested in Maharashtra and some parts cu' Gujarat during the mcmiths Qf September--De<:ernher {Kharif seasorzb, Ja'nuary~ March {early Rabi season or Late Khaflf season} and during A;:r§i--§'v'2axg {Rabi .'~:.easm}. in Tamii N€:'.C§L!, Karnataéia and Andhra Pradesh rxnim: £5 harv'e;:teci dmirwg iuiyu August {eariy Kharif}, Dcmberwmiember (Kharif season} and March-Ap:'iE_h (Rabi season}. in the states :3? Rajazsthan, Haryana, Pamgab, UP and Bihar, it is harvested ctiuring N~r.3vember~fiecernber {Kharif semen) and fV§.'ax_.i~3Lm<=.~ (Rabi season). In \»'»:'e=:si' Bengai and Ckrissa, onion is harvesied during, November-
Decemher iiiharh' seaénn) and Februarywiarch {Late Kharif SEBSGU}. in the hiiiy areas, onion is harvested z:iuring Juneéuiy (Rabi seascm} and during August» October. It has alga been ascertained that cmions gmwn durmg Kharif season have a reiatively shorter sheif We as compareszl to 'Rébi crap and are perishabie.
Further, anion aiscs gets destmyed by water and high moisture content.
5.5 Acczarding to D6, the market of onion czmsists dfiferent péayers in the supipéy vaiue chain. Farmers bring their produce in the mandis where it is smici through the commissian agents to the whc:_iesaiers who seifi it to the retaihers , efcsre it is finaiiy said to the mmsumers. D6 E3225 aim observed that there is aiways 3 c§§f'ferem:e in mandi raie and retail rate sf onécms in the shame: which "say vary according to the iocasiifties 3!"!-.'Z§ aisc: a«:::m'ding tin the type/piece Qf shops where the pmdute is finaiiv amid. For e}<amp¥=:--:, in maiis and Lspmaahirt areas, the price wouid be higher as mmpared to the suburbs and iocai er uveeizlyfmonthiy mandis.
5.6 D23 has mp-3r§;ed that with a viexxv to achieving an efficiem. system of buyirzg and seiiirzg of agricuiturai com»modities, most of the State Governments and (Regu§ati«:_m} Act {APMC Argixfi.
markets.
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'SI? STLL!£3V\.' L2"? fibres: mandis at Lasaigacm, Pimpafgacxn and Azadpus' was cem'ied cut by D6 to ascertain the market stmcmre and market uperations far 32212:: and purc:h:~;se Qf ranimnsé. it was gathered that the 35:59 of onion at Lasaigacm and Pimpalgaon mandis in Maharashtra {twa main marzdis sf union in india} is transacted 'ihrough the cemmisszion agents who get §i::en«:e=: fmm the APMEE' At these two p§aC€~3S, Qniens are brought to the market piace which is reguiated by APMCS. The efficiais of APMCS conduct the auctirm operations. At the entranrge of the mandis, staff of A95/1C3 issue entry gate passes is the farmers. Cm the basis of image gate passes, 'the vehicles make z=:n"try into the market pkace. Only these piayers can 'tran.=.aact business at these tam': mandis who have got a iicemte from the a'es;:r~':--:s:tive APMCS.
5.8 D6 has aim reported that a iicensee has to pay a certain amauni; fee ta get iicence from APMC and 3350 has to give some guarantee as security. There are two kinds of carmniasirm agenté. One set of commission agents are caiie-zi Biaccha Arahtivas, wha faciiitate fa2'n1eMrs in saie 0f onions at mandis thrczuégh auctiom and charge atszmmission of 4 "/6 fram the farmers on the saie price. Thus, if sa§e of say ataauét Rs. 1,0{1,0DQ is made , the farmer wiii be paid R:'.S3&3,{}GC} and rest of the amcunt gases 'to fiacchéa Arahtiyas. Thzzn, "there are Pucca Arahtiy:-:5 who can pu§'cha$e onietms from the farmers through the Kaccha Arahityas an behaif Ln' otheré traders, who dc: not have iicence. These persrms recewe certain income {mm the traders far faciiitatéing sakes to traders and aiso pay CE'i"£.aii':
amount {'0 Kaccha Arahtiyas. As per statement of traders/cmnmission agems, Pucca Arahityas rmrmaliy charge commission at the rate of 1% ~ 2% on saie _va§ue fmrn traacisrs. Sameitimsa-3, ccgmmission by Pucca £\rahti\;as is aéscz charged an per cguirficai basis. Puma Arahtiyas book their' transactions at the same vaiue at whécrh iéfaccha Arahityas record their tramzactions in their backs and in books of imth S tine eratitiea, commissicm is reczardggi.-s2T§;~'¥'§é3"3@u{::€: 0? income.
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53.? ,£\cr;ording to £38, bath ééactcha Arahtiyas and ¥'uC<:a Arahtéyas need separate iicence as per APMC mies. A tracker who does mat have iircence wiii have ':0 ;3ro<:ure onions tmough Puma r<\r'ahrtiyas to sefii in the D3383"! market ta retaiiers er to Qiher traders since without iicence, nc» trader or commission agent can operate in"mandis. From the traders, market at a: rate cf about 1.05% is charged by Pucca Arahtiyas, which is gaayable 'tea ;3s£>MCs..
5.10 {)6 has also repc3ri:ed that immediateiy after a paricicuiar aL:cti»:m, a Sauria Patti is issued by the APf\f!C officiais mentioning the names 0*? cemrrzissien agent, purchaser, farmer and the rate at which deai is mzusie. After this, the weighmr:-ant of \2'i:":hiC§€.' is done in presence of the !3sP¥\!§C Qfficiai, who issues a Kata Patti, indicating the weight of the prr3duce.1APMC r.)fficia§s record the deteiis of each transactéen in a register on the spot at the time of auction. Qn I.'.0m§33E3t§{)Y"l U?
. awsrion precess, summary 0:' all the 'transactions in the formef arrived quantity, maxirnurr; price, mimrrmsm price and morfiai prices isuploanied an the website of A§3"MC. Hewever, rd-etaiis of each trans::ct§s3«n, name sf tr;-sders, cemmission agents and farmers, weight and price vaiue are entered iater cm in the ceamputers on the baasis cf preliminary recr.2ro5s;
5.11 At Azadgnur, iiéce in case :3'? rather mendis, APEVEC wcwks as fa::ii§tator its the farmers and anion braught by farrners are auctioned' At Azardpur, 'ewe types 0'? licences are prevaéent, name§y,'A'and'B" Buyers;"!ocai traders are 'A' rtategcrry Eicensees who rrurrzhase gaods. from the commissirm agents 'B' Eicence heiders. Cmiy 'B' Eicence hoiders {Le comrmissicm agents} can get entry into market yard for trarxsacrtion of goods. Seiiers xwho are either farmers or traders from ether states have ta seifi geeds necesszariixg thrcrugh commission agemgs. Farmers as seiiers can seii their gonads independent of cemmissicm agents aisc: to the buyers. They have been given specie} place for deéng 'these 'transactions by KI { APMCA. }=%owever, this happterrirrg.-ifi iicensee can get 'A' Viicencze 31:30; Howevs-r, 'A' iicensee wiii have to have some space at mancii ':0 get '8' Eicencaav We farmer brim the pro-:iu~:e to the Mamji at Azadgmr and the iicenaees in the Mandi faciiitate the saie 9% the gmacium between the faz'm:=:r and the buyer. The iicensee charges 6% (ma:-timum} 0'? the sale vaiue as ttcxmmissmn from the fam"aers,"'tra<:¥~3r5 wh§-::h is his inc«::eme. He a-'rise charges 1% from buyer (traders) market fees whim are remitted ta the APMC. At Azadpuz', uniike Lasaigaon and Pirnpaigaon, anybody can purchase cmicms at the mandi piace without having any iicence.
[36 has aksa brought 01:': that at Lasaigaon and Pimpa§gar.m while amnion is faciéitated by APMC mfficéiais, at Azadpur, auction is done in cnpeén every day by cmnmissicsn agents themseives and Dfficéais of .f-XPMC monitor and chauzk ail 'transactionsé.
5.13 According to D6, Deih': an its own dcaes net pmduce 'Fruits and vagetabies. A very negfigibie quantity of green uegetabie Le. cautivfiowesi, spinach, ratéish etc. arrives. from same Surrounding vifiages sf Deihi in Azadpur Margdi. The suppiy of fruits and xsegetabies. in Azacipur Mandi is tcftalély dependent on the weatherfctimatic conditimas of pmducing area in Luther states. Therefore', the price of any commodity in Azadpur ;I\/iamfii bands to depend upsn 'Che sugzsgoiy of fruit and vegetabies and fits -Liemand in Dem': as wefl as in ether States. The main sources of :s.a,:pui§1 of anions in Azadpur Mandi are the tr'a::§e:rs,/farnwers of Rajasthan, Gujarat and Ewaharasz tra. This mzmdi caters mainiy to the needs of Sfiiationaé £a,*:.%ta§ TEr:'§to:'*§ sf Beihi but some quark 'ta; er.' ssnmns is afiaa "r '7 d b\_rt§1etrac§er5 of surmundmg states Le. J&E< and Punjab, [38 has brought out that a visit to mandi wit! reveai that a iarge number of farmersa, commission agents and traders area assemébfied to conduct their business'.
every day'.
5.15 A::»::os"dAing to D6, every day 34%-'$5; i§?§\\g;§';e:1 au{:t.%mn5 ta!-rze mace, ~*.'g,r;:=':<:~a§%\_,r 1 ,. _ <3- m-:~;-z+3 are 'three types of? trargaggggfiakv *5' A. _3{ 3&3 rec.orc£ed~ rnaximuzn price at . ,',__' u which feiattixveiv better quaiity anions at-3 502:3, modai price at whim minimum transactitms take place in a day and minimum price at which the iow or avezeget quaiity onions are sold. The website of .%HMCs aiso remrds aii these three: types of transactiorws. The price 0'? onions in retaié market. is c§eg3endes':t Lgpun the prexiaiiing am:ttiL3n';::'ices in mandis. if the auctitm price at mandm is higher', the retaifis prices in market mates: are bczund '(U be higher.
5.16 Reis,/mg upon the data avaifiabie on the website- of Nationai Horticulture Research 8: Deveiapmetnt Fotundation {NHRDF} for the years 2098,2009 and 2010 and also on the basis cf data obtained from APMC of Lasaigaan, the biggest mandi of onions, DG has, reported that the quantéw at armrai cf onions in that mantii in 2010 was far was as cenmared to 2808 and 20%. {)6 has found that the arrévai in the mandi of Lasaigasn had reduced by 29.50% in the year 2619 as.
mmparetfi to 2809.
5.117 'nag aiso observed from the data that oiuring the mcmths ca'? Septt-m'zber~ December 2010, in which the préce of onions had seen an upward trend, total arrsvaisz in Lasaigaon mandi had reduteté ::otnside:*ai:>i\r as campared to 2008 and EGG?-3. As compared tcx September'-Decembszt 3089, the arrivai sf tmians during September'--DecembE:' 2010 had gone down by 2?.6€5%. Further', during Dtecenwber 2010, when the price of Lmions had imzreaaed sharpiy, suppiy was reoéuceti by 2.33% as wmssared to the mrresponding month in' 2039 and reduced even more in percentage terms as aonwpared tn the arrivatis in 2308. Arrivafis during Aprihiiiecerrzher as wnwpared to the previous year had aéscr gone dcznwrz by 29.58%.
5.18 Simifiartyj, in Pimpaigamn mandi, as per the avaimble data from NHRDF and rQ\.F'§\4'rK:, B6 has observed that the quantity :3?' Cmicms arrived in mamiti in 2610 was .7' , 9 . \ » \ .
far iesa as campared to 2388 and 20€¥§_1Q' gqtivais had gurse down by 2'7.139/6 in 2010 mmpanizd t<:> 2809. FL; had 3150 got recitucezti dmmg
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Eiega-tember--E3ecember 2010 as tempered ta) Septes*nher--Deces"nt:er 2069 and during Decern%;e.r' 2018,. when the price cu' a:m§cm:s had increased shar;:«i\g. in the mcmth cu' Cxecember 20153, suppw 01° enicsns was retiucetfi by 409% as cempareci ta-
Decemiaer 2039.
5.19 As regards arrivaés in Azadpur Mandi, Deihi, D6 has 'band 'that since Beihi is not an cmicm pmdmting state, the mamdi -is depefzdent upoz': arrivais frem other statesiike Rajasthanje Maharashtra anti Gujarat it was gathered that zwrivais 0?"
Onions in Azacipur Mandi, Deihi had am) reduced cQa':5§derabiy mmpared is the previous years. The arrivals had reduced by 11?-1.41% in the year 2010 as cempared to 2089 and arrivais during September-~D:§ceember 2913 were aiso reduced by 20.88% as conwpared ':0 the previcus year. Further, in the month of December 2510, thearrivai had gene down by aimest 23%.
5.23 {.36 has submitted mat reasans 'Fm reduced arrivaisfsuppties in J-Xzacipur Mandi of Deihi couid be seen in the everaii reciuced supgfiies of csnicens in various mandis of Rajasman, Gujarat: and Maharashtra, wherein as c:ompar'ed 3:0 Septemberfieceniéaer 2939, there was a sharp deciine in arm/3&5 during S-epiternber ---December 20116.
5.21 D13 has reported that there was a decfine in suppiies in enfion net nniy in Deihi but ass: in the states of Rajasthan, (3u*jara1: and Maharashtra fmm which aniarz is sourced by Azadpur Mandi cf Dethi, during 2316 as against 1'-3.€}{J9 es;:»e<:§aEi\; during Sep"tember«De«:en'2i3er 23333 in cmngzerisen in Sep'§e.mbe2'» December 2309.
5.212 in adciitimn to date of arrivals in the mend}: of flveihi, Mahatshtra, Rajaethan and Gujarat, {)6 has aigo gathered detefor Aii indie aerrivais of onions in \.«'ar'aous mandis and founti that there was a ties' grfivais in aifi mandis in the morfihs "_F,.»* A .
«F K \ . \\" ' of September~De<:embe:' 20113 a§,.»§§ /,,,,.m....,,,'% . 7 data from NHRDF, US has smted that arrivais an' onion had gems Tdaxavrz 'Imrn 6I34{Z¥lZ€*4E= quintais in P.C1s:'.=9 to q=.2§nt'ai3 in 2810. The A3: mdia arrévais; figures for {Jecernber 200% EL 2910 were EHJSSOAS and «:°.:249?82 c;u§n'r.a§s re5pe:.t'w:~32y, showing a sharp deciine in arrivais in Decembesr 2010.
5.23 As regards reasons far shortfait in suppiies En various mandis, :38 has ccmctiuuderi ma: reciucaad arrivals cf onions in various Mélfidifi during {3<:tob{-gr» Decenwiuer was on acccmnt of unseasonai, erratic and heavy rainfaii because cf which the Kharif anion crop was destroyed in aémcrst aii Kharéf onion producing St-':':TE£-"a.
5.24 According to D6, whi!e.su;:p§ies of -anions had reduced in mahdis, there was no dedine in demand during the perieci. Therefore, there was a :mismatch between supgiy and demand of onions which contributed ta increase in prim-:5. {:6 has aisc» conctmded 'ihaft the rise in prices was mare in the movth ed' December, 2010 sirice '(hare was sharp decline in a:'r':vais in that mszmth in various mamjis. in partir:u¥ar,. the price started peaking up after 15" Dexsember and maximum increase was \:v§i':'1essed cm 20"' {December ZEJZLG. The pritze 0f ('mans started faifmg oniy after 24"' .}anuary 2011 wh:=.=n 'fresh Late Kharif Cmion crop start:-5d. arriving in the mandis and tcstai suppiiea of onions impmved br'idgg,ir:g the gap between demand and stzpgaiy.
5.25 {:18 has a§so dame a {:c2:'reia.tion anahrsis between madal prices and totai quanitiw of onions arrixsed in the mandis of lfieiéwi, Lasaigaon and Pimpzsigacsn £0 find em': whethesr price behaved §n ac=.:0rcianr;e Mvith the normai ecmntsmic zarmcipies of demand and suppiieg during the period.
33 has <:z:f«m§udez:§ théii the .: I», Q; ' - ' m.»..\\\~...
b=::hav%:3ur of gzxrices was not atmsrmafi in camparison ta sugméies. and imhaved nC.»rma§E'~,x shmwirsg upward movements with C§¢3C§§i"£F3 in sx.spp'3'ie5 and clasuvnwaré 'tferid vmh augmentation in sugapfies in mamrjis .
5.2'? flxccording ta D213, there was a 'strong neegative cimrreiaticm between arrivaks and prices during the menth of December' 2010 in all the major mamjis induding Dethi, E__a5a§g:wn and i?'§mg:>a¥gacm. According, to D6, the correiaticm resubts are not unusual and Shaw that pr'aces vaflééd in acmrdance with the qu:-.mti'r;y Q3"
suppiy of onions in the market am there was no sigriificasn'. abrzmmaiity betwem the twcz variabies.
5.28 {JG has aiso repcrted that the price ef onions had éncreaaed during the mmith cf Deceamber 2010 in ah the major mandis of Gujarat, Maharashtra 8:
Rajasthan. in these areas; during the same periad, ciecfiine in suppliesqarrivais. 'm anions was afiso aiaserveci. As per the NHRDF data, the c;cr'reta>tian coefficient 01"
arrivai with medal price was aiso "band in bé negative fur the year 3316- in respect of aii the manciis in' india. Accmding ta Q6, this snxggegts that prices rncwed inverseiy xlvith suppisg everywhere cmring RG10. During the period 15"' E'.~e<:embar~ 2"" Qeceinher, 2010, when 'there was sham imzreasa in price; 'at was noted that the arrivals had aiso gone down by abceut 40% in major mandis of Deihi, Lasaégaon and fimpaigaon. Thse impact on prfices {Sue to shmt suppfies was felt mare during this period, mare s;:eci:°'Er;at1y on 20.12.2010 when prices had rzgen semis!-a:'ab¥\,!.
529 As regards reascms far shortage of Dnierzs in mandis, I'e§'g'mg Uiifm the reports 'Imm A?fv'iCs, staterrzents'. of traders and commission agents and reperts of inmme Ta): Department, 236 found that it was due to Lmseasonai and erratic rairrfait which had affected the « -<.&'«'~ ' §v'::a§"saras%':tr~a, (Sujami: and Ra§a,»sf ,,,,,..,.,~ ./ /1 '42-;
7.! ,r (_/fr _. M-4..
cmicm crop in the state cu' K."-n'nat.a.i<a aiso timing December' :».'.{31.{3. in Déihi, which i:s..depe.nde.n*: upon itiie cram iar..osi>.ec'is in. .M.a%iar.asi'i.tr'a. Raiasthan 8: £3ui_ar.a*t, since arrivais were legs in rim mesndia is'; those states, SLE§3§)§§€?:5_.I"8!E'!'i\f.?.iE.S of cmicms in mandis in Beihi had aiso dedined.
5.30 E36 has aim reported that whiie there was a misiraatcii in suppiy and demand, experts Sf fmicms ccwntimaed ever: in the nioraths mi' November Eii"':£'§ Decemi3er' 12.010. The expons 0'? Cmicxns were banned onfy on 22.12.2019. This further compcmnciiaid the pr<:i::iem of shortage of onions in \.4'8ai'i.C¥'LsS mandis.
5.31 Acccmtiing to [38, due to the suppiy constraints Quiz of the reasons stated abave and stabie demand during the period, there was a gap in demand and suppiy which contributed to the increase in price of omens in Beihi and ether sriarts of the country.
5.32 D6 has. aiso iiiiiiid tiiat "there was neat much variation in minimum auction price at mandis cornpared ta 335': year during September « December 2018 and aiso on 20.12.2010. Hcewevez", there was an increase in modai and maxiiiniism prices and this increase was much more in the mcswth of Bergember 3:310. in fact, the minimum price of czriimis has registered a cierziine during Nmvember 2010 as cominared ts fxlmvember 2639 in Lasaigaon.
5.33 in <:<:2urse of iiwezstigaticsn proceedinga, based upon inquiries i'na::§::= imm traders and itsmmission eigents, US has gathered that the im::'eas.i=_>. in maximum anti made! price of cmicms was due tca the fact that sispgziy oi" innians. had reduced and traders were wing ta purchase the high quaiity onions goods fcir qizaiity sernsitive ccmsumers and aim for seed purposes. Further, according to Q6, reasmi for deitiine in the iTti§1i?T1LEmr§3Fj??§: :€»~ri.i<>ris on mania daites in No\ri=.~mber« _.a°'..
._,-~ ,
-.,.w~z/»/ December 2009, in some Mamdis was because the quaiity of cmi-ens had gene ..................... ..€3..<?'WP .:r3m3...i'.Ei%.e.. f:ree..was...a.ff.e§ied__i3_aii.¥~,«f.._ev_eraE_!1._due..te...wi:seas.:::2ai .€.3.r.¥i&it":_C......_ raim'a§E. 5.31% On the iseue 2:2?" carteiizatian and ceeéiuséon, it has been coencéuded by D63 that since the wansaetéons at Mandis take place thmugh a process of amtion, rraar:ipu!a'ti0n of the prices at the time 0*? auction in an erganized manner i5 not pessibie. DEE has :'epm"ted that the entities who come have possibw coifiuded wculd have been farmers as pmducers, commissicm agents or traxriers. Farmers couid have pcssibfiy cazsliuded to demand higher priceg for their produce. Hawever, because 9*? the geegrephécal spread of the cmsswtry and the number of ihe farmers imrotved at} aii ieveis inciuding smafii and marginai farmers, it was net feasibie far farmers of the entire csauntry or even three or four major xzmizrm pmducing states ta ceilucée.
5.35 Furizher, cefiusicm by the cemmissien agents was 315.9 not feasibfie since the agerrts are oniy facilitators of transacztions between buyers and aeiiers at mandis and they ccxuid not have on their own raised the auction prices.
5,36 DE: has aise submitted that aytifk-:33! shortage of onions ccsufid have been created by the whoiesaiers / retaiiers ta raise prices. Hewever, ereat'mg artificial shortage wczuid have meant storage in huge quantities in gwdcxwns with a purpose to raise prices at a ieter date ta earn Esbnormai pa'of'its. However', it was met possibie to: stare Kharif anion crop in large quantity in the merzth of December due in the fact that onians of that time are generaiiy perishable and have Ecsw sheif fife. Further, the 5ur\«'eys by mcame Tax Department a!50 did not Lmearth significantiy huge stock c_>j;'rI:'$7{2i'r' 'C%:§E§¢?i'S indicating hoarding xrxrhich g' R - ' J. COL£§d have influenced the ma.s'%-' 1:}.
5.3? it has aim i}*3~C-.'i'i gatimred by DC: tiiat since there is no forward mar'i<eting in ................................. .EmEON3,.Eh@i'E..a;Z5§Ii!3.E:i7S..i.Q.i3E..!'?Q..ii.f3kage..b€EWQeE]..fDiTWE3.i'.£i..E'rT1.Ei.€i<€§I.L-3iTid..33§.'iCE3 r.i.se..in.....__.__._...........
onian per se as has been aiieged in some sections of meciia.
5.38 Cm the basis «of anaiysis 01" auctions at mamiis, DG haé siiixmitted that it is, howavew, pfissibie that the traders may together trigger price spikes by buying Si'i'1F3iiEi'q'LiafiiLi'Zy' at. a iiigizer i'ai'e'~: as it happened at Laisaigasan and Pim;3aig.a0n on Decemiacer 20,. 201.9. This cczuid aim potiantiaiiy act as signai for both the consumers and prcsciurzers, that in the market, prices have reacheci a certain ievei and saies may now oniy be aiientted at a higher price. However, acéariding to 98, this canncst be said ta be evidence of any agreement among the traL'ers cf the nzatiure mentioned in section 33) mi the Act.
E-.39 Taking into acccmnt aii the facts gathered in course of iiwestigatiori, it has been »::»:m::.iu.ded by the DG that the main reaszcm behind urmsuai increase in price 9%' ariicns was the mismatch between demand and s.u;::piy during Camber- Januan; 2811 tiii the £35': week of Janusry 2811 caused hecaizse of unseasonai and erratic rainfaii which impacted the kharif onicm crop ativerseiy. D6 has aiso s.:cinciu.<:ied that aithough implicit understanding among the traders to raise prices in the wake ax' scarcity' ta make profits for themseives rsannoi be ruied out, evidence of carteiizatian and crrganised CDiiusicm among the traders 0r among any mixes" piayer in the xwiiaie suppiy chain muid not be found.
5.51-£3 While csrmciutiing that he evidence 0%' contravention of any of the pmvisiorzs mi section 38) of the Act maid be found in the case, DE: has: aiso Observed in his report that pceiicy measures are required ta increase rm.» iarrn -T productivity, 'smpmve suppiy bottlenecks and augment the storage iaciiitiea. it has also been bmugiit that tiwere CGL!~i:Ci be possibility of marzipuiation mi prices ihrmugh acts iike mixing pom' quaiiw anions with higher quaiity onions and 'Lima:
3 wstE:m of grading may be introdggagxr' 'mi-Qga. 36 has t-3i.°.G suggested refcsrms in tile' eixistiing structure of Agkii» I present witimui: a iicence 4»/' /J'/,,_.,.'.....,...,,,' /' ''-~-»"».-w ""
..:» 'J1 bumness cf tnadirzg Gr ccsrnmission in mandis is not possibie, which in a way .................................................. ..9f§ti7?.i?i*;§.:3.e.w..r:§.aye.r.$.f:r_Qm.£3m%rg.ima.at.:?3.e..a:1a:f§:e:..m.aa:e..___.........
6. The Commissien c~:m::¥derer;£ the repcart er" D6 in its va:'§r_.~L:s meetmgs and examined ail me reéevant aapeécts imtoived in this case.
6.3. The Commission rmies that in his repent of inVves'tEgati<3n, DC} has reparited a significant gap betwawn 'thssz demand ahd stsppiy of onions. which acwrdéng to him was the main t'BaS~f3fi behind spurt in {mien prices in Beihi and other parts of the ccvuntry during Decernber 5:013 and 3:-muary 283.1. It has alga been bmught cm': in the report cu' $236 that the arrived of the onions in the mandis of major onion producing states during Orgtcabef 2Gl{3--J2muary 2011 ;2art3ct,§iat'iy during, December 2015 was crms.idera%:x¥y Eower than the previous year.
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6... "%"he Cammissian afiso notes from the findings af D6 that {leihi main} ' gets Supplies cf csnicms from Maharashtra, Rajasthan and Gujarat Surfing the periuri of €}<:ta:sber»December 2010, erratic, heavy' and Lmseasonai rainfaii had destrayed the Kharif onicm crop in those states. badly. This affected the arrivaia and suppéées «sf onions in the mandis of these states inciuding the majm mandis iike Aiwar, Lasaigacm and Pimpéaigaan. The deciine in arrivais in those mandis impacted the Varrivafis of the Union crop in Deihi aisc: since Defihi being a .non--c»nécm producing state is depenrient upon those states for the mnicm crap.
6.3 :36 has aiso hzported based upon data xzaiiected by him in ::csursE Q3'- investigation that the shortage in suppliea was feit mcsre in December 2010 in the mandis in P»/iaharashtra, Rajasthan, ifiarnataka am Dssihi which triggered rise _ in onion prir:.e5 in that month. The findings sf D6 or; ;:.uppEies of onicms are based uphon the data abtained from A§'E\/N35, NHRDF, MHB, data sgoliectzad by income Tax
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i;radersf<:os'nmissi0n agents. Since the data ceikecteci by '':--h{-: D6 is 'fmm a wide array of smsrces, the CemmissigsfgV_f§§;s;i§V§}q§eVe§e;fg§;;_Vgiégéggieeetijeeegame, .............................................. ..
6.4 The Cemmissic-n «observes that since atxgiiczn price tn' omens at various mamjis from which omicsns were/are scaurczed by De-{hi was very high in December 2013, price in the mandi and retaiE.'mas*kets in Deihi aise had risen conaequenitiy. The impact in retaii emarket of Deihi was much more since the pmduce brought:
in Delhfi from other pieces had to be auctioned again in the mamzfi of Deihi fa-ctcsring various zthargess on account of transgaortatirm, cammissicm, iabeur fer imaciing and unioading and mandi tax and thereafter soide in the whoiesale and retaii markets.
65 The Cammission further csbserves theatADG sup;:>::3rted his findings and ccmciusions regarding the miamatch in suppky and demand with anaiysés Cr' correlation coefficients 02" figures reiating to suppiy' of Onions and §ts modei price 'an the 'three meager mantiés ~ Laaaigacm, Pimpafigaan and Qeihi and aiss-:3 in mamiés;
aii over indie. i-as.aiga:3n and Pimpaigaon are considered to be biggest mandis for onians in indie. D6 in his re;3or*»: has mougm' am': that ::=:3n-'eiaticn coefféciezriisa fer a:'r§va¥5 and maria? prices cnf unions in mandis 33% indie over Endia reveaied that there was an inverse reéatimnship between the price and auppiy of onicms; there'fm"e, when $up;::iy of cmicms deciined, the auciiim and whoieaaie/retaii pricges. shat up and the prices tapered drawn with the increase in supplies. in the
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6.6 The Cemmissmn 2235:) notes that {I3-8 has brought out that once ccmditions of suppiies immoexred and fresh Late Kharif Onion crop started arriving, in the mandis after 2z:.o1..:3e::1, the price 03' anions aiso started tapering desmn Lierrxand and supply of oniors in the mancii of Deihi and eiso in mamjis of major %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% LW???Lpieee%¢e¢e%r1g.esete«e :39£3efie.Atiie;?%f?fs????i?as?e=7¢eV93???e%?'*e£%*:%.ei%7e$ee%?fwe$e%%%?+¥e%?tewe damage tn the omen crap, w*n':c§'z was the main reason for the rise in prices in December' 281£)---January 213131. Price 0:' anion: in Deihi had aiscs fluctuated due to change in denwand~sL:p§)¥y conditiams in the ewake <33" un'¥:ime§\; and erratic mine in are:-:5 en" Kharif onion predursfsng states wffich dsxmaged the map. Not cmiy in C*e§h"i, there were ffiuctuaticsns in ether cities aisa in onimw prices due to the supply shocks.
6.8 The Cornrmesion: aiso Qbsewes that rserrnaiiy during a perked >3? shortage, there wouid be. a tendency of specuiative iwzzrsfing errmng the 'traders in preaumption 91" making profits in fuiure. Hewever, no extidence Of mass hoarding under an agreement cuuid be found fur the peried under referem:e in murse of the ienvestigaticm. income Tax Department has aim not reported mase hmardings of omens by the traders under an agreement during the perind. Hoarding by "traders per se canmt be considered as an evfidence 01" agreement cm' the nature mentioneti in section 3(3) of the Agrit to say that 'there was an agreement, az':'angem:=:n'c or mortiinatimw among the traders er among any other piayer of the suppiy Chain which caused iimit in suppiies Q1' anions xxvith a purzaxase to raise prices in the market, when no eviden«:£-3 of this sari: has been feund by 136 in course of investigaticm.
6.9 The Cemmfission further notes fmm the firicfings of D13 that the price 9? onions in mandis is determined by eamstion. it wouid be auction price at mamii vmich xmvmd have u§%;imate13+' an impact; on the wh0§e;~:aEe are retaii prises in the merketss. The Commission ubserves that whr.=2n the aus:t.':0n price itseh' was very high at a§E pieces ~ Deihi, Aiwar, Lasaigamn, Pim*;}a§gaC>n, Bhavnagar and at the ether mi-mdis ma' Gujarat, Rajasthan and Maharashtra in the sesond quarter' of mramth «:3? December 2010, it was nwwai {or prices to go up further in w§m§esa1e .-~' _ '\ 7' \§Q\L!S ievels in suppiy chain.
A \ . x 5.10 The Ccmmwisgiéon abserves that there is no evi.:§s:=ncs:= which has C-anwe to the FROM 0'? F3?.§...?f?..§i%S§%?$.'§.ii§1.%f¢...§??#%%§<'é>...w2:*:§...r??«.a.:1¥r~>_:é,$?ét:i_:>r3.in.:15:3.,.:;.as.<:_:i:2::.,.:::r%.::ass,.anaé .................... ._ whiie produce was auctioned at a higher rate , farmers were paid iower prices. Further', mampuiatien in aurgtien prices wouid mean ccafiusion with AWMC mfficialzs which does nut tack probabi-s.>. -since reaiising that the prevaiiing auction rates are higher, the farrrxers Witt n<::«t iike to saie their produca at a iower rate far the Saeméfit af traders and APMC woufid gist'; mist: §§2<e to iose its re\rem.:e.N 6.11 in View cm' the §'m'egoing, the Commissézsn is cf the View that there is rm reascm to disagree wéth the fimiirzgs of the {K3 that if: absencte of any evicience :31' coiiusécn 8:' carteiisation among the tradex's/ccmwmissitjn agents or any other players in the supgisly chain, increase in onion prices during December 2010 carmot be attritvutéd to an agreement or action in comtert within the rm-aaning {sf 3(3) 01" the Act. US has not faumri any s:-evidence in the case which suggests violation cf any of the pmvésaions of section 3(3) cf the Act as has been aiieged én the matter.
7. The Cernrnission, therefore, hokis that the prmteedings reiasténg to insztant informatiorx szhouid be chased 'forthwith undczr Settian 26 {6} of téné Act.
8. in View of the abcxws, the matter reiating to this irrformation is hereby chased under section 26{{5) cf the C;0§ags.g«§itiQn Act.
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