Tomato prices have been boiling for more than a month. Data from large cities show that the increase has been between 125 and 150 percent at wholesale level.

Photo: Amit Dave/Reuters

Rising vegetable prices, including tomatoes, pushed retail inflation to a nine-month high of 5.49 percent in September, according to government data.

While reports say prices are expected to drop in the next few weeks after supplies improve from Madhya Pradesh and Himachal Pradesh, how long the respite will last is anyone’s guess.

The central government has been selling tomatoes at subsidized rates for the past few days in the national capital Delhi to tame prices.

In fact, among the three vegetables that make up the trio of TOP (tomato, onion and potato), tomato is believed to experience the most volatility in prices. There are many reasons for that.

Wasted and lost

A study by the World Resources Institute India (WRI) in three districts of Madhya Pradesh, one of the major growing states for the commodity, shows that about 15 percent of tomatoes are lost or wasted at the farm level, and 12 percent of tomatoes go lost. cents in the retail sector.

The findings were released recently.

WRI India works with local and national governments, businesses and civil society to address India’s development challenges.

The main causes of losses at farm gate levels, according to respondents to the study, were poor production, harvest and post-harvest practices, such as harvest time and method, packaging and temporary storage.

Respondents also mentioned the lack of adequate infrastructure for storage, handling and processing, and unpredictable weather conditions.

At the retail level, the main causes of loss and waste are pest and disease infestation during production, unpredictable weather conditions and poor handling practices for packaging and temporary storage, lack of storage options and consumer preferences that drive cosmetic specifications.

India produces 20 to 21 million tonnes of tomato annually.

The scope of the study was limited to wholesale markets and retailers, mostly unorganized, in the selected geography.

According to a 2022 study by Nabard Consultancy Private Ltd (NABCONS) of fruits and vegetables, tomatoes suffer the second highest post-harvest losses (11.61 percent), after guava (15 percent).

Production cycle

A recent Reserve Bank of India (RBI) working paper, written by noted agricultural economist Ashok Gulati and others, shows that the major tomato-producing states including Andhra Pradesh, Madhya Pradesh, Karnataka, Gujarat, Tamil Nadu and West Bengal together account for 57 percent of the total production.

The months of transplanting and harvesting also vary across states, with major production (67 percent) coming from the Rabi months.

In states like Andhra Pradesh, Gujarat and Maharashtra, tomatoes are produced almost every year.

In other producing states like Karnataka and Madhya Pradesh, the peak season is during the months of August to October and October to December respectively.

In West Bengal and Uttar Pradesh, most of the harvesting takes place during November-January.

The paper says that between 2014-15 and 2022-23, tomato yields increased from 21.3 tonnes per hectare to 24.0 tonnes per hectare.

The RBI paper notes that tomato cultivation mainly involves marginal and small farmers who account for 82.1 percent of total land holdings.

This also means that their capacity to store and sell at a future date is limited during peak production cycles, ensuring that farmers dump their output during the production months while consumers end up paying through the nose during a supply squeeze.

With a cultivation period of 3 to 4.5 months, tomato is sown on raised beds.

There has been an improvement in yield over the past decade due to the introduction of hybrid seeds as well as marketing and processing.

Tomato cultivation in India is predominantly open field cultivation rather than multi-house cultivation, which can help multiply yield levels through vertical cultivation, the paper said.

Farmers usually take their tomatoes to the mandi (Agricultural Produce and Livestock Market Committee, or APMC).

The first level of grading and sorting into three classes is done by the farmer at the farm gate itself.

The farmer has the opportunity to sell to organized retail, such as HOPCOMS (Horticultural Producers’ Co-operative Marketing and Processing Society Ltd), SAFAL Market and Namdhari Fresh.

Processing units either procure tomatoes from mandis or directly from farmers.

Price volatility

The RBI paper further says that since tomato is a short-term crop, supply-side shocks translate into prices quickly, causing volatility in retail prices.

The recent increase is also largely due to excess monsoon rains in the major growing states of Andhra Pradesh, Karnataka and Maharashtra which have led to deterioration in the quality of the standing crop.

The three states account for almost 27 percent of the country’s annual tomato production.

Data from the India Meteorological Department says the southwest monsoon was in excess by 20 percent in central India and 14 percent in the southern peninsula.

Major tomato growing states fall in these two regions of the country.

Will the farmers benefit?

Not much, because, as the RBI paper says, tomato is among the crops for which farmers get the least share of every rupee a consumer spends.

The newspaper estimates the share of farmers in the consumer group at around 33.5 percent for tomatoes, 36 percent for onions and 37 percent for potatoes.

In contrast, egg and chana farmers get almost 75 percent of every rupee spent by consumers.

“According to the calculations, traders (who sell tomatoes) earn an average of 5.3 percent margin.

“The same applies to wholesalers in the secondary market,” notes the RBI paper.

It says that the highest margin in the tomato value chain is distributed by the retailer, who bears the highest risk of perishability and waste.

“This is because tomatoes are mostly sold in unorganized markets, and they have to incur transportation costs and shop rentals,” the paper writes.

The solution

A rapid nationwide spread of tomato hybrids that have a longer shelf life may provide some remedy for unstable prices.

Conventional tomato varieties in non-refrigerated conditions typically have a shelf life of seven to 10 days, but there are new hybrids available that have an impressive shelf life of up to three weeks.

These varieties are also resistant to no less than three diseases that infect tomatoes, including the dreaded late blight.

Ashok Gulati said in a newspaper article some time ago that to bring down inflation in tomatoes, the Center should ensure that at least 10 percent of the annual production is processed into purees that can be stored and used anytime and the VAT on processing tomato must be reduced.

The farm-to-plate gap must also be narrowed.

There are plenty of solutions. You just have to work on them.