In this article, Ruchika Daga discusses how to complaint against illegal hoarding of onions by traders.

Onion market in India

Onion is one of the most sensitive vegetables that create undulation in the trade as well as political circles.Thus the changes in prices cause all problems for the farmers and consumers. The price hike in case of primary products affects both producers as well as consumers and also leave an impact on to the other sectors, which lead to high inflation in the economy. Thus it is the major concern for the politicians, policymakers, and experts.

Black marketing/illegal hoarding

Economic activities that take place outside channels which are government-sanctioned. Illegal market or black market transactions usually occur “under the table” to let the participants circumvent or avoid government price controls or taxes. The black market is also called a place where highly controlled products or substances such as drugs and firearms are traded illegally. Black markets take a toll on an economy since they are shadow markets where economic activity is not recorded and taxes are not been paid. Coming on to financial context, the biggest black market exists for currencies in nations with strict currency controls. Most consumers may evade or reject the black market because they consider it corrupt or immoral, there may be rare occasions where they enter in such markets when no other choice but to turn to this necessary evil.

Essential Commodities Act, 1955

The Essential Commodities Act is an act established by Parliament of India to ensure that certain commodities or products can be delivered easily, the supply of which if clogged or obstructed due to hoarding or black marketing would affect the normal standard life of the people.

This act gives powers to control production, distribution, supply etc to regulate the prices and making them available at a reasonable and fair price of essential commodities in the market. The items given in the act is reviewed time to time according to the dynamic society.
This act has been implemented by state governments by the delegated power given to them by the central government. The central governments on regular intervals monitor the state governments to check if state governments have implemented the provisions of the act correctly.

Initially, onions were not an essential commodity under essential commodities act 1955. The Cabinet Committee on Economic Affairs (CCEA) in 2014 approved the inclusion of onion under the Essential Commodities Act, 1955.

Penalties

If a person contravenes with the act he shall be punishable by imprisonment which may extend up to seven years but not less than three months and shall also be liable to fine. The court may give a judgment for the imprisonment of fewer than three months in special circumstances. Prevention of Black-marketing under Essential Commodity Act, 1980

In order to protect consumers against unethical trading practices like black marketing and hoarding the Prevention of Black Marketing under Essential Commodity Act,1980 has been implemented by the state governments to protect the society from persons whose activities are detrimental to the maintenance of commodities which are necessary for the society.

Special provisions regarding fines

Anyone who contravenes with section 29 of Code of Criminal Procedure the court has to power to pass a sentence of fine exceeding five thousand rupees.

Protection of action taken under Act

No suit, prosecution or any legal proceeding will lie against any person for anything which is done or intended to be done in of any order made under section 3 in good faith.

No suit or legal proceeding will lie against the Government for any damage occurred or likely to occur by anything which is done or intended to be done in good faith in pursuance of any order made under section 3.

Prevention of Black-marketing under Essential Commodity Act, 1980

In order to protect consumers against unethical trading practices like black marketing and hoarding the Prevention of Black Marketing under Essential Commodity Act,1980 has been implemented by the state governments to protect the society from persons whose activities are detrimental to the maintenance of commodities which are necessary for the society. National Consultation Meeting held with States and UTs in-charge of Consumer Affairs and Food held in 2015, Delhi resolved to take steps to keep prices of essential commodities, especially pulses and onions under control.

Guidelines were given to State Governments to take strict action against illegal marketing & illegal hoarding and effectively enforce the Essential Commodities Act, 1955 and the Prevent Black-marketing and Maintenance of Supplies of Essential Commodities Act, 1980. Regular reviewing meeting on price and availability is being held at the highest level to keep a check on the price scenario and recommend appropriate actions.

Measures are to be taken to improve availability by giving incentives for increasing production through Minimum Export Price (MSP).

New Plan Scheme titled Price Stabilisation Fund (PSF) is being implemented to regulate price volatility of agricultural commodities.

Specific Measures for onions :

Export of onions – Export of onions has been restricted by Minimum Export Price (MEP)

Import of onions – Import duty of onion is allowed on zero duty.

SFAC and NAFED were provided funding support during this year through Price Stabilisation Fund Scheme for the creation of stock during the harvest season. Retail sale of onion was undertaken from the stock held by SFAC and NAFED during the bend season to improve availability and moderate the prices. The stock limits of onion have been extended by one more year that is up to 2nd July 2016 under the Essential Commodities Act.

How can illegal hoarding be regulated?

1. Black marketing can be prevented by regulating the licenses, permits or the production or manufacturing of any essential commodity under the Essential commodity act, 1955
2. By bringing under cultivation any wasteland, for starting the growth of food-crops generally or of specific food-crops, and maintaining or increasing the cultivation of food-crops generally, or of specific food crops. 3. By taking controlling measures to regulate the price at which any Essential commodity can be purchased or sold.
3. By regulating the licenses, permits for the storage, transport, distribution, disposal, possession, or consumption of, any essential commodity.

How and where to complaint against illegal hoarding of onions?

Public Grievances Cell

Violations of Controlling orders issued under the Essential Commodities Act,1955 such as hoarding and illegal-marketing of food products, are cognizable offenses. An Anti-Hoarding Cell also functions in the department to register FIRs or complaints on violation of Control orders under Essential Commodities Act and prosecute such offenders in courts of law. The public can lodge complaints regarding deflection of food products to black-market, hoarding of essential commodities etc. at the central Control Room.

There are two designated nodal agencies in the Central Government handling these types of complaints. These agencies are:-

(i) Department of Administrative Reforms and Public Grievances, Ministry of Personnel, Public Grievances & Pensions

(ii) Directorate of Public Grievances, Cabinet Secretariat

Registration of Grievances online

‘Public Grievance Redress and Monitoring System’ (PGRAMS) is a software which has been operational with every Director of Grievances. This will make the Director of Grievances to immediately place the details of grievances received in a database as well as note or record the fact whether he intends to monitor its progress, identify the division where it is being sent, etc., Also generate the time taken in dealing with the grievance or complaint, enable reviewing of pending grievances in the organisation or across the organisations, generate acknowledgements to complainants, conduct analysis etc. The system should also have the facility of online registration of grievances by the citizens and access to information on the status of his/her grievances.

National consumer helplines (NCH)

The department for consumer affairs by the government of India has established national consumer helplines by the government of India.

The government recognized the needs of the consumers for a telephone helpline to deal with the problems which are arising in their day-to-day dealings.

NHC provides a national toll-free number-1800-11-4000.

To achieve national goals, achieve fair supply and distribution and prevent illegal hoarding of commodities essential to the general public.

Detention under PBMMSEC Act is ordered if anyone violates the orders issued under the Essential commodity act, 1955.

It advises customers as to how to deal with unfair trade practices.

• Step 1: The consumer is been informed of his rights in a particular consumer problem and where should they approach in the concerned company or the organization.

• Step 2: If the problem is still not resolved he would be given directions to take the matter with industry level chambers of commerce.
• Step 3: Last resort, the consumers would be advised to take up their case to consumer courts under the Consumers Protection Act. This helpline is designed to promote out of court settlement of consumer disputes and helps to reduce the burden on consumer courts.

What is INGRAM (consumerhelpline.gov.in)?

This website is launched by the Department of Consumer Affairs to create awareness, advise and redress the grievances of consumers and act as a central registry for lodging consumer complaints. Efforts would be made to address these complaints, all complaints may not be fully or resolved satisfactorily.

This portal is an alternative dispute redressal mechanism. In case, the consumer is not satisfied, he/she can approach the appropriate Consumer Commission. The Department of Consumer Affairs has launched this portal as an integrated Grievance Redress Mechanism (INGRAM) for bringing all Stakeholders such as Consumers, Central and State Government Agencies, Private Companies, Regulators, and call centers etc. onto a single platform. The portal will also help in creating awareness among consumers to protect their rights and inform them of their responsibilities. Registration can be done online by the consumers of their complaints through this portal.

How can one register his/her grievance?

Any distressed consumer can register his/her grievance either by calling the toll free number 1800-11-4000 or by talking to an agent or register himself in the portal, get a user id and password and register his grievance himself by attaching necessary documents if any.

Step 1: A one-time registration is necessary for lodging a complaint. For registration go to the web portal http://gama.gov.in and click on to login link and then signup by giving necessary details required, and verify your email. The User id and password are created.

Step2: By using this user id and password, enter into the portal and fill in the details of complaint attaching necessary documents (if any available).

A user manual is available online in the link: Consumer Manual

Step by step guidance is available in that link with diagrams.

State consumer helplines (SCH)

The central government is giving financial assistance to states for running of consumer helplines at the state level. Center has facilitated fund to 33 states till now. Delhi hosts the website and software to all the states and union territories and they are expected to join the network of the same so as to maintain the uniformity all over the country.

Role of Competition Commission of India in preventing illegal hoarding on onions

Any agreement entered between enterprises or associations of enterprises or persons or associations of persons or between any person and enterprise or practice carried on, or decision taken by, any association of enterprises or association of persons, including cartels, engaged in identical or similar trade of goods or provision of services, which— exemption for joint ventures entered into by competitors, which enhances efficiencies in production, supply, distribution, storage, acquisition or control of goods or provision of services. Those types of agreements having cartelization shall be considered by the CCI to have appreciable adverse effect on competition in India. An inquiry into a violation of the Act can be made upon the receipt of a complaint by the Commission or upon its own motion which is also called suo moto action. If the Commission is convinced that a prima facie case exists, it proceeds to direct the Director-General to commence an investigation. When the director general completes the investigation he submits a report to the Commission which then decided what action to take.

Onion Future Act – How US legal system tackles the problem of Illegal hoarding of Onions

The Onion Futures Act is a United States law which bans onion trading by futures contracts. Onion futures trading began on the Chicago Mercantile Exchange in the mid of 1940s as an attempt to replace the income lost. Onions were the most traded product on the Chicago Mercantile Exchange. In 1955, it accounted for 20% of the trades. In the fall of 1955, Siegel and Kosuga bought enough onions and onion futures so that they controlled 98 percent of the available onions in Chicago. Thousand tons of onions were shipped to Chicago to cover up their purchases. By late 1955, they had stored 14,000,000 kg of onions in Chicago. They soon changed course and convinced onion farmers to begin purchasing their inventory by threatening them that if they did not then they will flood the market with onions. Siegel and Kosuga told the growers that they would hold the rest of their to support the price of onions.

As the growers began buying onions, Siegel and Kosuga made a large number of onion contracts. They also arranged to have their stores of onions reconditioned because they the onions started to spoil. They shipped them outside of Chicago to have them cleaned and then repackaged and re-shipped back to Chicago. The new shipments of onions caused many futures traders to think that there was an excess of onions and further drove down onion prices in Chicago. By the end of the onion season, Siegel and Kosuga flooded the markets with their onions and driven the price of 23 kg of onions down to 10 cents a bag. In August 1955, the same quantity of onions had been priced at $2.75 a bag. So many onions were shipped to Chicago in order to depress prices that there were onion shortages in other parts of the United States.

Siegel and Kosuga earned a lot on the transaction due to their short position on onion futures. At one point, however, 23 kg of onions were selling in Chicago for less than the bags that held them. This drove many onion farmers into bankruptcy. A public outcry ensued among onion farmers who were left with large amounts of worthless inventory. Many of the farmers had to pay to dispose of the large amounts of onions that they had purchased and grown.

Effect of Chicago Mercantile Exchange

After the ban was passed, the Chicago Mercantile Exchange filed a suit in federal court saying that the ban restricted trade unfairly. After a federal judge gave a judgment against them, they declined to appeal to the Supreme Court and the ban stood as it is.