Consumers wait in a protracted queue, braving the rain, to purchase tomatoes at a subsidised worth on the MVP Rythu Bazaar, in Visakhapatnam on July 18.
| Photo Credit: Okay.R. Deepak
The story up to now: As prices of tomatoes hover between ₹100 and ₹200 in varied elements of the nation, the Reserve Bank of India’s newest month-to-month bulletin has highlighted that the volatility of tomato prices has traditionally contributed to general inflation ranges within the nation.
How is tomato produced in India?
Tomato manufacturing within the nation is concentrated regionally within the States of Andhra Pradesh, Madhya Pradesh, Karnataka, Odisha, and Gujarat, which account for near 50% of whole manufacturing, in response to Ministry of Agriculture and Farmers Welfare figures. There are two main crops of tomato yearly — kharif and rabi. The rabi crop hits the market between March and August yearly whereas the kharif crop involves markets from September. Some areas in Maharashtra and Himachal Pradesh’s Solan are capable of develop tomatoes in the course of the monsoon months, whereas in the summertime, Andhra Pradesh’s Madanapalle area alone accounts for tomato cultivationin your complete nation. As for tomato manufacturing, it peaked in 2019-20 at 21.187 million tonnes (MT) and has been declining since. In 2021-22, it dropped to twenty.69MT and 20.62MT in 2022-23.
How a lot have tomato prices soared since final month?
In late June, prices of tomato doubled in retail markets inside a day. According to knowledge from the Consumer Affairs Ministry, pan-India modal worth (charges at which most trades happen) in retail markets jumped to ₹40/kg on June 25 from ₹20/kg on June 24, in all probability the utmost rise in a single day.
In the primary 24 days of June, the modal worth was ₹20 per kg. In the final week of June, the modal worth surged to over ₹50 per kg. On the final day of the month, it peaked at ₹100 per kg.
As on Saturday, July 15, the common all-India retail worth of tomatoes was ruling at ₹116.86 per kg, whereas the utmost price was ₹250 per kg and the minimal was ₹25 per kg. Modal worth of tomatoes was ₹100 per kg.
What is fuelling the worth rise?
There are a number of components for the dip in general tomato manufacturing this yr, with the 2 key causes being excessive climate circumstances and low business realisation of the crop for farmers within the months earlier than June in addition to final yr.
The heatwaves and excessive temperatures in April and May together with delayed monsoon showers in southern India and Maharashtra led to pest assaults in tomato crops. As a end result, inferior-quality varieties got here to markets earlier this yr, fetching farmers prices ranging as little as ₹6 to ₹11 per kg between December final yr and April 2023. Plenty of farmers resorted to promoting no matter crop that they had at these prices whereas some deserted their crops. This led to a crunch in provide. Later, incessant rains in tomato-growing areas additional affected the brand new crop. The incontrovertible fact that July-August is a lean manufacturing interval for tomato, because it falls between yields, compounded the issue. Reports present that many farmers within the Kolar district of Karnataka, which is normally answerable for sizeable tomato provides, shifted to beans owing to the upper prices it fetched final yr.
Is it a seasonal difficulty?
The Centre has known as this sudden and sharp worth rise in tomatoes a “seasonal” and short-term difficulty. Consumer Affairs Ministry Secretary Rohit Kumar Singh said that there’s a seasonality to tomatoes, including that the info on tomato prices of the final 5 years confirmed that the charges had risen yearly at the moment.
However, coverage specialists through the years, and now the RBI and the National Bank for Agriculture and Rural Development (NABARD), have expressed issues over this excessive seasonal worth volatility of tomatoes and its impression on the general Consumer Price Index (CPI). A NABARD research from final month notes that tomato is essentially the most unstable out of all of the three TOP (tomato, onion, potato) agri-commodities. While the weightage of the meals and drinks part within the mixed CPI is 45.86, greens account for a comparatively small a 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 general CPI has been fairly unstable. In June 2022, at 8.9%, tomato had the biggest contribution amongst 299 commodities within the CPI basket. There are a number of causes behind this beginning with how it’s extra perishable than onion and potato. Supply chain points in transporting the vegetable from areas the place it’s grown to areas the place it isn’t compound the issue. A July 2022 research by ICRIER notes how tomato prices have been following a cyclical phenomenon, with the identical scenario arising each alternate yr. The yr 2021 additionally noticed prices drop to as little as ₹2-₹3 per kg for farmers. This led to plenty of them cultivating tomatoes in lesser land space and shifting to different crops, which resulted in a glut.
How can volatility be managed?
Policy specialists say excessive volatility might be tamed by making some enhancements. First, since tomato is very perishable, improved worth and provide chains may help with the issue. An organised worth chain entails a market-focussed collaboration of a set of entities working in tandem to provide, course of and market services in an efficient and environment friendly method. An ICRIER research suggests rising the processing capability for tomatoes. Building extra processing models and linking tomato worth chains to processing of no less than 10% of tomato manufacturing into tomato paste and puree throughout peak seasons, and utilizing them within the lean season when contemporary tomato prices spike could be a resolution. The growth of built-in chilly chains has additionally been instructed.
A 2022 research estimated that farmers’ share of what shoppers pay for tomatoes is barely 32%. Eliminating middlemen and inspiring Farmer Producers Organisations to promote produce immediately, in addition to amending guidelines of Agricultural Produce Market Committees to cut back fee and different charges has been instructed.
Besides, tomato yields in India at 25 tonnes per hectare (t/ha) are very low when put next with the worldwide common of 37 t/ha. ICRIER suggests encouraging cultivation in constructions known as poly homes and greenhouses (as finished in lots of European international locations), which may management pest assaults.
