The distress in the Indian farm sector has spread from oilseeds and pulses to horticulture crops. It was potato a few weeks back, now tomato farmers have been hard hit.
This is because there has been bumper tomato production in India during the past three years with the current year 2017-18 pegged at 22.3 million tonnes (MT). This is 35 per cent higher than the output in 2014-15 (three years ago) had resulted in price crash across the states. Remunerative prices had prompted tomato farmers to take up cultivation of the crop in a big way this season, adding to the glut and prices fall.
While prices have fallen everywhere, farmer stress was particularly noticeable on the roads in UP, Tamil Nadu and Haryana. To make matters worse food processing capacity has kept pace with the increase in bumper crop.
In a nutshell, record horticulture crops have failed to make farmers' prosperity and tomato is the latest to foment their distress after potato and onion.
| Tomato production in India | |||
| Year | Area | Production | % Chg* |
| 2011-12 | 907 | 18,653 | |
| 2012-13 | 880 | 18,227 | -2.3 |
| 2013-14 | 882 | 18,736 | 2.8 |
| 2014-15 | 767 | 16,385 | -12.5 |
| 2015-16 | 774 | 18,732 | 14.3 |
| 2016-17 | 797 | 20,708 | 10.5 |
| 2017-18 # | 801 | 22,337 | 7.9 |
| Area in thousand hectares; Production in thousand MT; # 1st advance estimates. *Production change YoY Source: NHB; Compiled by BS Research Bureau | |||
Prof Sudhir Panwar, President of farmers’ advocacy body Kisan Jagriti Manch, told Business Standard that after the potato price crash in the winters, tomato was facing the same fate in the summers. “Wholesale tomato prices are witnessing a steep fall and have even touched a new low of less than one rupee a kg in some parts of UP... similar is the situation with other vegetables and fruits.” Potato farmers in UP and some other states had recently dumped their produce on the roads to protest falling prices, while cold storage owners had followed suit since farmers had failed to take back their stock.
The average price of tomato in Koyambedu Wholesale market, the largest fruits and vegetables facility in Tamil Nadu stood at Rs 10 per kg. Prices have just recovered. Two months back, they fell to Rs 2 per kg, forcing farmers in districts such as Tirupur, Krishnagiri and Salem to dump their produce in the open.
The cost of production of one kg of tomato is around Rs 12 and the farmer must get at least 50 per cent profit if he has to run production, says P K Deivasigamani, leader of Tamil Nadu Farmers Associations' Joint Movement.
Panwar of Kisan Jagriti Manch attributed the sudden fall in prices to good harvest owing to favourable weather and central government policies to contain inflation, which has pared the wholesale price inflation in the negative territory. The rural demand has also turned weak in the past few months.
One major factor, which otherwise could have supported tomato prices, is the lagging food processing capacity. Gujarat-based Apricot Foods director Rajesh Patel said the country’s food processing capacity was still too low to handle surplus production of food crops, especially early perishable horticultural crops such as tomato. “Our food processing capacity is still around 5 per cent, way below the targeted 12 per cent and needs to be augmented if farm incomes have to go up.” He suggested adoption of cooperative and contract farming under government regulation to better insulate farmers from market fluctuations.
Besides, most Indian farmers lack financial resources and market information to hedge their positions by putting their produce in cold storages.
Sanjay Tyagi of a Ballabhgarh (Haryana)-based farmers producers organisation said a 25 kg crate of tomato in Haryana was currently selling for Rs 50-60 in the wholesale market, which was a losing proposition for farmers. The prices hit rock bottom last week before staging some recovery. “Next year, I think the tomato acreage would fall and the farmers would go for another crop,” he claimed.
The spokesperson of Meerut-based Arora Foods, which manufactures tomato ketchup and jams, said the consumption of tomato and tomato-based products was consistently rising in India, yet it was not sufficient to account for the sudden jump in a season. “The reality is today import of tomato paste from China has practically stopped since Indian companies have started to product the same product of quality and at affordable prices. Yet, the whole value chain is still not complete to safeguard in seasons for bumper crop.”
Former UP horticulture department director S P Joshi, however, said horticultural farmers were getting remunerative prices over the past few years, which explained rising acreage and production. “The yield is increasing every year and apart from some lean periods, Indian farmers have been getting good prices.”
A Selvaraj, general secretary of Tamil Nadu’s Koyambedu Tomato Wholesale Traders' Association, said prices are expected to go up, considering the state is entering the peak summer in May.
In Tamil Nadu, the districts Thiruvannamalai, Salem, Dharmapuri, Coimbatore, Erode, Trichy, Madurai and Dindigul are the hubs of tomato cultivation. Places close to Karnataka, such as Royakottai in Krishnagiri district, are also famous for tomato cultivation. At present, most of the supply to Chennai is from Karnataka and Andhra Pradesh.
The farmers have been demanding a minimum support price from the government, in order to overcome this volatility.