Tomato price plummets, farmers face huge losses

As prices plunge, farmers leave the harvest to rot in the farms.

Bengaluru: Farmers in Karnataka are letting tomatoes rot on the plant because prices are so low that they do not find it worth their money to transport the crop. 

Chandrakumar, a tomato farmer in Doddaballapura said, “I harvested almost 20 tons of tomato this year but I did not sell it because the price came down to Rs. 3 per kg. It did not even cover transport costs.” He added that cold storage is not an option for him because that would require him to transport his produce from farm to storage unit and also he has to pay for storage, which would again cost him more.

Sreenivasa Murthy who usually sold his produce to a company did not do so this time. He said, “I sell to this company every year but this time they offered me Rs.4 per kg so I did not. I had sowed over 4,000 seeds and harvested approximately 4 to 5 tons of tomatoes but I did not pluck it because I did not want to pay labourers when it wasn’t profitable.” He added that he incurred losses of almost Rs.50,000-60,000.

Pavan Kumar Gowda, a tomato farmer from Kolar broke down the expenses of growing tomatoes and how he incurred losses. He explained, “In Kolar tomato market we sell tomatoes in boxes and each box contains 15 kgs of tomato. Usually one box costs Rs.300 to 400 and if I have harvested 4,000 such boxes I earn a total Rs.4 lakh and my initial investment would be Rs.2.5 lakh which includes all expenses of two types of fertilizer, pesticides, mulching, support sticks, labourers, transport, commission etc., so my profit would be Rs.1.5 lakh.” 

He further explained that because of decrease in demand due to lockdown, because of hostels, paying guests (PGs) being closed and less demand from restaurants, one box cost Rs.50 and that led him to incur losses of Rs. 1.5 lakh per acre and that he had grown across two acres adding up the losses to Rs. 3 lakh. “Companies don’t use this variety of tomatoes for sauce making, they use a different variety. They usually give contracts to farmers for fixed prices to grow a specific variety of tomato,” he further explained.

MG Chandrakanth, retired professor and head of department of Agri Econ, University of Agriculture Sciences Bangalore, said, “The degree of tomato processing is modest as the consumers demand fresh produce. Since the demand for processed tomatoes is modest, tomatoes cannot be used in processing.  Also, if farmers have over produced, does not mean that it will be over consumed. The demand for food is relatively inelastic, supply too. Hence farmers cannot expect to make supernormal profits cultivating tomatoes alone.” 

He further explained that it is difficult to teach farmers who have no idea of the economic theory behind markets. “The only answer is crop diversification and market-led extension efforts,” he added.