Tomato Tango: How Startups Can Change Tomato Game in India?

How can tomato entrepreneurs address the challenges and establish a stable tomato industry in India? What insights do the Commerce Minister and industry experts provide on this? For full details, please read the entire article.

Swati Dayal
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Tomato Tango

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India's agricultural sector, a major contributor to the country's GDP, has undergone a transformation because of its transitions from traditional practices to a more modern approach. A multitude of agri-tech startups have emerged, working diligently to bridge the gaps in the agri-sector and improve the lives of Indian farmers while fortifying the nation's agriculture ecosystem.

Piyush Goyal Seeks Startup Solutions for Tomato Supply Chain

In a recent development, Piyush Goyal, Union Minister of Commerce and Industry, called for views from the startups to streamline the country's tomato supply chain. 

Earlier this year the tomato prices soared to a height which reached a staggering Rs 200 per kilogram during certain periods.

Goyal conveyed his desire to receive innovative solutions from startups during a gathering in Gurugram, where he emphasized the need for comprehensive resolutions, both for minor and major issues within the tomato economy.

Piyush Goyal

“I am looking for ideas from some of you how we can manage the tomato economy better because tomato prices went up to Rs 200 per kg," Goyal said, addressing a startup event in Gurugram.

“For instance, the price for tomato in the Delhi-NCR were high in July, following a supply disruption from the producing centres owing to rains. Startups should come out with solutions both for elementary and "big" serious problems. The budding entrepreneurs would help in making India a developed country,” the Union Minister added.

The 'Tomato Grand Challenge’ Hackathon

During the event, Goyal underscored the vital role startups can play in advancing India's development, particularly in the agriculture sector. He revealed that in July, the Consumer Affairs Ministry, in collaboration with the Innovation Cell of the Ministry of Education, launched the 'Tomato Grand Challenge Hackathon'. 

This challenge was designed to solicit creative ideas from a diverse range of participants, including students, research scholars, teachers, industries, startups, and professionals across the tomato value chain.

The objective was to ensure the availability of tomatoes at affordable prices for consumers while enhancing the livelihood of tomato farmers. Notably, this initiative mirrors previous efforts to address challenges related to onion prices.

Insights on Tomato Fluctuations: Value Addition and Storage Infrastructure Key

Mr Sagar Kurade

In a conversation with TICE News, Sagar Kurade, Managing Director of Suman Food Consultants and former President of the All India Food Processors’ Association (AIFPA), highlighted the primary issue contributing to price fluctuations in tomatoes, potatoes, and onions. He explained that these three crops often experience price differentials due to cyclic variations in high and low prices.

Typically, during the harvest season, prices tend to be high, leading many farmers to harvest their crops with the expectation of receiving higher returns. However, this often results in a surplus, causing prices to subsequently drop. It becomes a recurring cycle. To break this pattern, we need to focus on two key aspects: better storage infrastructure at the farm level and increased value addition to the products. For example, when tomato prices are low, farmers can obtain better returns by diversifying into products like tomato pickles or sun-dried tomatoes. This approach leads to more stable and less fluctuating price structures for the entire crop," Mr. Kurade explained.

Farmers often adapt their crop harvesting based on their predictions of future prices, resulting in a market that continually oscillates. To address these fluctuations, Kurade has recommended two key solutions: enhancing storage infrastructure at the farm level and introducing greater value addition to agricultural products. For instance, farmers can develop value-added products like tomato pickles or sun-dried tomatoes during periods of lower prices, ultimately contributing to a more stable pricing structure.

Innovative Solutions for a Stable Tomato Market

Startups have a crucial role to play in addressing the challenges of the tomato supply chain in India.

According to Mr. Sagar Kurade, startups can function at various levels within the supply chain, encompassing storage infrastructure, processing, management, price prediction, and more. They have the potential to develop innovative solutions that improve connectivity, such as AI-based apps predicting price variations in different regions, thereby enhancing crop distribution. Additionally, startups can concentrate on establishing value-added infrastructure like storage facilities, integrated packhouses, and processing units, benefiting both farmers and consumers. Their active participation can lead to a reduction in price fluctuations, fostering stability in the tomato market.

Understanding the Tomato Industry

India, as the world's second-largest producer of fruits and vegetables, boasts substantial tomato production, among other staple vegetables. Despite this abundance, the Indian fresh food market faces persistent challenges, mainly due to the nature of tomato crops. Tomatoes are highly perishable, short-duration crops that cannot be stored for extended periods, leading to heightened price volatility. Furthermore, production is concentrated in specific states, contributing to extreme fluctuations in tomato prices.

Root Causes of Tomato Price Volatility

Tomato prices in India exhibit a cyclical pattern, with the highest prices during lean production periods and the lowest during harvesting seasons. The combination of tomatoes' short cultivation duration, perishability, and concentrated production regions intensifies these price fluctuations. Erratic weather conditions, including heat waves and unseasonal rains, contribute to reduced tomato yields. Additionally, the invasion of plant viruses by aphids has adversely affected tomato crops in Maharashtra and Karnataka. These factors have contributed to the current tomato crisis, resulting in high retail prices.

India's agriculture sector, bolstered by innovative solutions from startups, seeks to address the challenges plaguing the tomato supply chain. With a focus on value addition, storage infrastructure, and innovative technology, these startups are poised to transform India's agriculture landscape, leading to more stable tomato prices and a brighter future for farmers and consumers alike.

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