India is the second largest country globally both in terms of population (1.38 billion inhabitants) and in terms of volume of tomatoes produced with more than 20 million tonnes in the fiscal year 2019-20. A well known Indian saying is “No tomato, no cooking” but 99% of the tomatoes are currently consumed fresh as it is currently estimated that only about 150,000 tonnes of tomatoes are processed annually. Is this about to change? Will India emerge in the next few years as a significant player in the tomato processing industry?
“India is one of the largest producers’ of fresh tomatoes. However, India is primarily a fresh tomato consuming market. Processed tomato consumption is lesser. This market is advantageous in terms of the availability of raw materials for processing tomatoes. One of the key challenges is to be able to convert fresh tomato consumers to processed. Secondly, tomatoes being a cyclical fruit, the processing infrastructure is more suited for other fruits when compared to tomatoes, hence processors tend to focus processing seasonal fruits. We at Kagome India work with directly with the farmers and also with some of the FPOs in order to establish our ‘farm-to-fork’ linkage. Kagome India has been in the forefront of launching new product verticals in the Indian processed tomato sector with the “crushed tomatoes” being our flagship product, which is a recommended alternative to fresh tomatoes in the Indian and Italian cuisine due to its consistent quality and pricing.”
Rohit Bhatla, Managing Director, Kagome Foods India (Excerpts of interview with Tomato News SAS)
The Indian economy is predominantly dependent on the agriculture sector, which contributes about 17% to the total GDP, and tomato is one of the three most importants crop under the Indian government “TOP” priority list of horticultural crops alongwith Onions and Potatoes. These three TOP staples found across the country symbolizes the government of India’s initiative called ‘Operation Greens’ to improve the living condition of farmers.
ln lndia, the tomato is mainly grown in two seasons across the country, which is from June to September (Kharif/monsoon season) and from October to February (Rabi/spring season), although in some regions, tomatoes are cultivated throughout the year. The Southern states comprising of Andhra Pradesh, Karnataka and Tamil Nadu as well as the Central states of Madhya Pradesh, Maharashtra, Gujarat and Bihar contribute maximum to the total tomato production in the country.
Though, lndia is the world’s second largest producer of fresh tomatoes after China, it currently processes less than 1 % of its production, compared to a much higher proportion in other major producer countries.
During the marketing year 2019-20, the production volume of processed tomato products rose significantly to reach an estimated 154,300 metric tonnes (MT) from 142.550 MT in 2018-19. Similarly, the average yield of fresh tomatoes in lndia has increased from 24.09 MT/ha in 2018 to 25.33 MT/ha in 2019-20 mainly owing to the availability of better inputs, seeds and sustainable farming techniques.
Due to its perishable nature, tomatoes cannot be preserved in their fresh state. Hence, these are processed in order to reduce their loss percentage. In India, huge post-harvest losses of the harvested tomatoes occur due to inadequate storage facilities, which brings substantial loss to the growers and hence to the national economy. A governement report estimates that 12.4% of tomatoes are lost.
The preservation of tomatoes in a semi-processing system not only takes care of the marketable surplus but also ensures the supply of raw materials for finished products like sauce, ketchup, drink and other processed products. Presently, there are no processing varieties that are commercially viable for use in India. In the absence a suitable processing variety, Indian processors tend to import bulk tomato paste mostly from China and simultaneously process fresh market tomato F1 hybrids during the glut period i.e., when the prices go below Rs.2 per kg.
According to reports, tomato farmers sell their produce usually through a local aggregator or via a trader at the local or regional mandi (marketplace). Farmers realize an estimated 30-50% of total value through the supply chain with the remainder being distributed amongst a multiplicity of traders and commission agents. This low margin on total value makes production unviable during the glut periods when tomato prices can fall to between Rs 0.50 to Rs 2 a kg. Few farmers are organized into production clusters through formal or informal structures like registered organizations or Farmer Producer Organizations (FPOs) reducing their access to contract farming options as well as their bargaining capacity with processors.
For instance, Sahyadri Farms, a leading FPO through its “Seed to Plate” approach plays an important role in tomato supply chain. Farmers and middlemen have a preference to sell to urban markets rather than to sell toprocessors. As a result, several paste makers have indicated a slippage of 10-20% in production which farmers seek to sell on the open market when market rates are more attractive than the contracted rates.
Production costs are currently estimated at between Rs 2 to 2.50 per kg on average (assuming yields of 50 tonnes/ha and operating expenses of between Rs 40,000 – Rs 45,000). As per reports, Processors seek tomato at or under Rs 4.50 per kg to maintain commercially viable operations, though some indicate a willingness to go beyond Rs 5 per kg, particularly during the off-season.
“India is a consumption oriented economy. Tomatoes are mainly grown to meet the domestic demand. Many at times, when there is too much of abundance, crop prices rise. Being a “TOP-crop”, with reference to the Government of India’s top priority crops, tomatoes are subject to wide fluctuations in prices and often farmers face hardships with such fluctuations”
V.D Sharma, Vice President, Sunsip Agro Food Processors (Excerpts of interview with Tomato News SAS)
Mandi prices typically range between Rs 6 to 10 per kg though they may skew to Rs 2 per kg in glut market conditions and Rs 40 during the off-season. The challenge is to establish a price arbitrage equilibrium that supports both the farmer and processor – this can best be achieved through improved crop yields coupled with reduced production costs by the farmer and effective as well as sustainable contract farming mechanisms offered by the processor. There is also a significant interstate trade in tomato driven largely by availability (varying harvest seasons and particularly off-season production), price variations and quality considerations.
Mandis and traders play a primary role in moving produce around through extensive trading networks. This in part helps create price equilibrium across regional markets but could also cause local shortfalls, a particular issue for the small processors who depend on local markets to secure raw tomato. On July 5, 2019, the Government of India announced a plan to promote 10,000 new farmer producer companies over the next five years.
“One of the main reasons as to why the Indian tomato processing industry is yet to successfully develop is because processors have not managed to obtain a reliable and consistent source for raw materials at the required cost and quality. Many at times, the real challenge for processors is when the contract price fails to match the farmer’s expectations. These issues can be resolved through better contract enforcement and backward integration. Expected policies could include, promotion of mechanized harvesting, subsidizing transportation costs incurred while supplying tomatoes to processing units and fixing a minimum support price based on the actual cost of processed tomato cultivation.”
Arun Talwar, General Manager, Cremica Food Park Pvt Ltd (Excerpts of presentation titled, ‘Prospects for processing tomatoes in India & Expected Govt. policy’ at NAAS Strategy Workshop on 24 Nov, 2020)
Public institutions have been breeding varieties more suited for processing than the ones generally grown by farmers. The tomato variety Pusa Ruby (IARI, New Delhi) was one of the earliest varieties used for both fresh market and the processing industry in India. Public bred processing varieties viz; Punjab Chhuhara (PAU, Ludhiana), Roma (NBPGR, New Delhi), Pusa Gaurav (IARI, New Delhi), Arka Ashish & Arka Ahuti (IIHR, Bengaluru) were adopted by farmers up to a limited extent. However, gradually commercial fresh market hybrids were being adopted by farmers due to their high yield potential.
Furthermore, ICAR-IIHR, Bengaluru has observed that there is ample scope to breed dual purpose tomatoes with processing quality attributes viz., high pigment genes (Ogc, hp) for deep red colour, joint less pedicel for mechanical harvesting, on plant storage of fruits, TSS, acidity, resistance to bacterial wilt, early blight, and begomo viruses with a minimum yield of 75-80 t/ha. In 2019, ICAR-IIHR, Bengaluru developed two high yielding F1 hybrids Arka Apeksha & Arka Vishesh suitable for processing with high yield potential (75-80 t/ha). Subsequently, both the hybrids were analyzed by four processors Sunsip Foods, Karnataka, Sahyadri Food processing, Maharashtra, Jadli Foods, Tamil NDU and Cremica Foods, Punjab. All the four processors reported that both Arka Apeksh and Arka Vishesh varieties could be suitable for processing.
“The development of high yielding multiple disease resistant processing tomato with high yield potential is utmost priority with Concentrated Fruit Maturity (CFM)& jointless pedicel for machine harvesting (MH). An emphasis should be laid on the enhancement of productivity, lycopene and brix in processing tomato and an effective utilization of MAS and genomic tools for expedite development of processing tomato is the need of the
Dr.A.T.Sadashiva, Former Head (Div. of Veg. Crops, ICAR-IIHR) & Director (R & D), Nethra Crop Sciences (Excerpts of presentation entitled,‘Need for breeding tomatoes suitable for processing in India’ at NAAS Strategy Workshop on 24 Nov, 2020)
(source Tomato News)