How is tomato produced in India?
Tomato production in the country is concentrated regionally in the States of Andhra Pradesh, Madhya Pradesh, Karnataka, Odisha, and Gujarat, which account for close to 50% of total production, according to Ministry of Agriculture and Farmers Welfare figures.
India grows two crops of tomatoes.
Rabi crop, is grown in Maharashtra and parts of Karnataka and Andhra Pradesh.
The supply of Rabi crops comes into the market between March and August.
The second is the Kharif crop, which is grown in UP and Nashik and comes into the market during the rest of the year.
Some regions in Maharashtra and Himachal Pradesh’s Solan are able to grow tomatoes during the monsoon months.
While in the summer, Andhra Pradesh’s Madanapalle region alone accounts for tomato cultivation in the entire country.
As for tomato production, it peaked in 2019-20 at 21.187 million tonnes (MT) and has been declining since.
In 2021-22, it dropped to 20.69MT and 20.62MT in 2022-23.
What is fuelling the price rise?
There are multiple factors for the dip in overall tomato production this year.
The two key reasons being extreme weather conditions and low commercial realisation of the crop for farmers in the months before June as well as last year.
The heatwaves and high temperatures in April and May.
Delayed monsoon showers in southern India and Maharashtra led to pest attacks in tomato crops.
As a result, inferior-quality varieties came to markets earlier this year, fetching farmers prices ranging as low as ₹6 to ₹11 per kg between December last year and April 2023.
A lot of farmers resorted to selling whatever crop they had at these prices while some abandoned their crops. This led to a crunch in supply.
Later, incessant rains in tomato-growing regions further affected the new crop.
The fact that July-August is a lean production period for tomato, as it falls between yields, compounded the problem.
Reports show that many farmers in the Kolar district of Karnataka, which is usually responsible for sizeable tomato supplies, shifted to beans owing to the higher prices it fetched last year.
Is it a seasonal issue?
The Centre has called this sudden and sharp price rise in tomatoes a “seasonal” and temporary issue.
Consumer Affairs Ministry Secretary stated that there is a seasonality to tomatoes, adding that the data on tomato prices of the last five years showed that the rates had risen every year at this time.
Significance
However, policy experts over the years, and now the RBI and the National Bank for Agriculture and Rural Development (NABARD), have expressed concerns over this high seasonal price volatility of tomatoes and its impact on the overall Consumer Price Index (CPI).
A NABARD study from last month notes that tomato is the most volatile out of all the three TOP (tomato, onion, potato) agri-commodities.
While the weightage of the food and beverages component in the combined CPI is 45.86.
Vegetables account for a relatively small part of this at 6.04, and the TOP commodities are even lesser at 2.20.
Even with such a low weightage, the contribution of TOP to the overall CPI has been quite volatile.
In June 2022, at 8.9%, tomato had the largest contribution among 299 commodities in the CPI basket.
How can volatility be controlled?
Policy experts say high volatility can be tamed by making some improvements.
First, since tomato is highly perishable, improved value and supply chains can help with the problem.
An organised value chain involves a market-focussed collaboration of a set of entities working in tandem to produce, process and market products and services in an effective and efficient manner.
An ICRIER study suggests increasing the processing capacity for tomatoes.
Building more processing units and linking tomato value chains to processing of at least 10% of tomato production into tomato paste and puree during peak seasons, and using them in the lean season when fresh tomato prices spike can be a solution.
The development of integrated cold chains.
A 2022 study estimated that farmers’ share of what consumers pay for tomatoes is only 32%.
Eliminating middlemen and encouraging Farmer Producers Organisations to sell produce directly.
Amending rules of Agricultural Produce Market Committees to reduce commission and other fees.
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