Sustainable Agriculture for Increasing Efficiency of ...

International Conference on Technology and Business Management

March 28-30, 2011

Sustainable Agriculture for Increasing Efficiency of Tomato - Value Chain in Uttarakhand (India) Rohatash K. Bhardwaj B. K. Sikka M. L. Sharma Ashutosh Singh N. K. Singh [email protected] [email protected] [email protected] [email protected] [email protected] College of Agribusiness Management, Pantnagar Rahul Arya [email protected] Symbiosis Institute of Distance Learning, Pune 1. Introduction Horticultural crops being high value crops are important in raising the incomes of the farmers besides creating employment opportunities. India, bestowed with wide range of agro-climatic and bio-diversity is ideal for growing a variety of agricultural crops, which includes large number of horticultural crops. Horticulture in India has gained its credibility for providing sustainable income, nutritional security and for providing employment opportunities, both in rural and urban areas. Tomato is one of the most widely grown temperate vegetable crops grown in Himalayas and tarai region of Northern India. Almost all the tomatoes grown in India come from its three mountainous and tarai states i.e. Himachal Pradesh, J&K and Uttarakhand. The supply chain of tomatoes, which is one of the main the temperate vegetable crops of Uttarakhand, is laden with inefficiencies across the entire value chain leading to poor price realization of growers on one hand and exorbitant prices paid by consumers on the other. A major share of this consumer rupee goes to a miniscule number of market intermediaries who exploit the farmers due to poor marketing linkages, virtually non-existent cold chain infrastructure and processing facilities. The growers still follow the age old cultivation practices and have no idea of consumer needs and preferences, market prices, various government schemes, scientific agronomical practices especially agri-inputs, sources of timely and adequate credit availability and market linkages. The tomato raising farmers of Uttarakhand suffer due to inadequate infrastructure especially cold chains, absence of demand forecasting and meagre value-addition. They also lack information on scientific cultivation practices, market prices, consumer preferences and market linkages. The purpose of this research paper, as such, is to integrate the information platform for various stakeholders and design an value chain enabled tomato supply chain that will benefit millions of tomato growers, processors, distributors, dealers, exporters of fresh& processed tomato products and above all consumers. The study will also provide an action plan to the policy makers and private players like HPMC,Kisan and Adani thus creating spin-offs which will stimulate social, economical and sustainable development of India.

2. Value Chain of Tomatoes In Uttarakhand, there is huge potential of vegetable production. Farmers are growing vegetables in a very good amount. In Uttarakhand there is 1.04 million Tonnes of annual vegetable production from an area of 80580 hectare. The value chain of tomato in Uttarakhand consists of a number of stakeholders like agri input providers, farmers, local collectors, commission agents, wholesalers, retailers, processors and consumers. This leads to decrease in potential income of farmers who enjoys only 50 per cent share of consumer rupee. Farmer faces several problems like fluctuation in demand, fluctuation in prices, post harvest losses which ultimately make the value chain inefficient. Also, only 5 per cent of farmers give their produce to processors. As many as 57.5 per cent sample farmers were found unwilling to sell their produce to processors. Cost of production of tomatoes is approximately Rs. 1,500 per ton i.e., Rs 1.50 per Kg and in peak season, farmers have to sell their produce at very uneconomical prices. This restricts farmers to invest more on production of crop. Some farmers (mainly from Haldwani region) have started giving their produce to retailers directly so that they expend less and earn more. Prices at mandi are decided on the basis of negotiation power of commission agents, farmers and local 15


March 28-30, 2011

collectors. Also, according to middlemen, it is not very practical to give farmers the price quoted in newspapers and internet as prices are decided on the basis of local demand and supply. Lack of awareness of computers among farmers and lack of appropriate extension system are responsible. Different processed products need different specification of product and hence processors procure only suitable quality of produce according to their final product. Overall, existing value chain is very inefficient and if managed properly, farmers in Uttarakhand will surely become prosperous. India is the second largest producer of vegetables in the world next only to China with an estimated production of about 125.9 million tones from an area of 7.8 million hectares at an average yield of 16.1 tones per hectare. India shares about 13.60 % of the world output of vegetables from about 2.0% of cropped area in the country. Tomato is one of most important vegetable in India. In India in 2007-08 production of tomato was 10.26 million tones from an area of 0.57 million hectares at an average yield of 17.9 million ton per hectare (NHB, 2008). Table 1 Area, Production and Productivity of Tomato in India Year

Total Area (000 ha)

Production (000 MT)

Productivity (T/ha)

1991-92

289.1

4243.4

14.7

2001-02

458.1

7462.3

16.3

2002-03

478.8

7616.7

15.9

2003-04

502.8

8125.6

16.2

2004-05

505.4

8825.4

17.5

2005-06

546.1

9820.4

18

2006-07

596

10054.6

16.9

2007-08

571.7

10260.6 Source NHB Database

17.9

India, bestowed with wide range of agro-climatic and bio-diversity is ideal for growing a variety of agricultural crops, which includes large number of horticultural crops. Horticulture in India has gained its credibility for providing sustainable income, nutritional security and for providing employment opportunities, both in rural and urban areas. Horticulture is contributing about 21 per cent of the GDP in agriculture. Changing dietary habits of the Indian population with improved standard of living has increased the demand for horticultural products. Traditional vegetable supply chain in Uttarakhand is prone to various sources of inefficiencies. Farmers in vegetable producing areas are unable to attract competitive buyers. Many of the farms are located in relatively isolated areas, a considerable distance from improved roads making access to competitive markets difficult and costly. Lack of bargaining power along with various credit bound relationships with the buyers has lead to farmers being exploited during transaction, where most of the farmers become ‘price takers’. The structure of the traditional vegetable supply chains is such that there are a large number of intermediaries (e.g. vegetable collectors, transporting agents, commission agents etc.) between the producer and the consumer. Addition of the marketing margins of all these intermediaries coupled with almost 30 to 40 percent of the vegetables being wasted as post harvest losses have eventually resulted in producers receiving a very low price for their produce while at the other end the consumers are compelled to pay a highly inflated price for their purchases. A supply chain or logistics network is the system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to the end customer. In the traditional vegetable supply chains, only vegetables of superior quality are purchased from farmers at the regional vegetable collecting centers and they are paid a premium price for such vegetables. In the traditional vegetable supply chains the post harvest losses are as high as 35 to 40 percent. This is a serious problem with regard to the traditional vegetable supply chains, as a considerable portion of the total harvest is lost and the cost is ultimately borne by the producer and the consumer. Value chain analysis is a tool for analyzing the nature and source of value within a supply chain and the potential for reducing waste therein, with the focus explicitly on the determinants of value within a manufacturing process rather than the simple measurement of process outputs. Value chain analysis within the food industry faces the challenge where transactional relationships between trading partners remain the norm. This crop is highly sensitive to refrigeration and freezing. And fruits of tomato are perishable in nature. So efficient supply chain is needed to ensure reduction in post harvest losses in tomato and efficient use of produce in one or the other form.

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3. Problem Statement Horticulture presents a lucrative business opportunity given the hurdles in the supply chain and the traditional methods of agriculture marketing involving numerous intermediaries are replaced by efficient supply chain and innovative methods of marketing of horticultural produce. Horticulture produce is of perishable and seasonal in nature. And tomato is one of the most perishable commodities in horticulture. There are many tomato growing belts in Uttarakhand and lack of infrastructure facilities here in Uttarakhand leads to more and more post harvest losses in tomato. Poor efficiency in marketing channels and inadequate marketing infrastructure leads to high prices and low share of farmer in consumer rupee. Hence technical and professional issues in the operations of value chain may include each and every step where value addition is done in the product. Also SSIs in Uttarakhand are coming in great way and there are chances of upcoming of more potential processing units soon. And they can play a significant role in minimising the post harvest losses in tomato. Thus, the present study has been undertaken:  To study the value chain from the farmer to consumer in terms of handling, value addition and packing.  To find out improvement areas at different levels of value chain and suggesting appropriate strategies.

4. Review of Literature Sharma et al. (2006) emphasized on improving the availability of quality fruits and vegetables to markets and processing units. Strategies to be adopted at production, harvesting and post harvest levels appropriate to Indian scenario are suggested in the study. Mechanical injury, infestation and poor handling of fruits and vegetables reduce the market price drastically as also processed product quality. It is thus imperative to develop and follow certain strategies to minimize these injuries to fruits and vegetables for supply to markets and processing units. Horticultural produce needs special attention on two accounts i.e. protection from sunlight and hygiene in the compound and the need of terminal markets is therefore highly necessary. Suryavanshi et al. (2006) conducted a study to identify marketing channels, to estimate marketing cost, marketing margin and price elasticity. The study revealed that 80% of the tomato was sold through channel (producer-commission agent cum wholesaler-retailer-consumer). The cost of marketing incurred was the highest (Rs. 187.45) in channel-I, where as it was the lowest (Rs. 55.40) in channel (producer-consumer). And retailers enjoyed higher net proportion of margin as compared to commission agent cum wholesaler. Marketing efficiency was observed to be the highest (9.70%) in channel (producer-consumer) for achieving maximum profit and to reduce intermediary charges in trade, when the produce is in small quantity and if the produce is in large quantity channel-II should be selected to safeguard the interest of tomato growers. Gilbert (2007) examines the potential contribution of the Global Value Chain (GVC) analysis in the commodity sector and resolves the apparent paradox that retail coffee and chocolate prices have declined at most, modestly, over the past three decades, while producer prices for coffee and cocoa have fallen more dramatically. Both industries are highly concentrated in the processing stages. Nevertheless, developments in the producer and retail markets are largely unconnected and there is no evidence the falls in the producer shares are the result of exercise of monopoly power.

5. Research Methodology Descriptive research design was adopted for the study considering the nature and scope of the study. Emphasis was given on studying the various intermediaries in value chain of tomato in Uttarakhand. Primary data was collected by taking response of different stakeholders in value and supply chain with help of structured questionnaire. Secondary data was collected from Vikas Bhawan (Dehradun and Bhimtal), World Wide Web and from Mandis regarding main tomato growing areas, status of tomato cultivation and price of tomato in previous months. Three districts of Uttarakhand, namely Dehradun, Garhwal and Nainital were taken into account as these districts have favorable agro-climatic conditions for tomato cultivation. Sampling unit comprised of Tomato growers, Commission agents, wholesalers, retailers and processors constituted the universe of the study. Multistage sampling technique (was adopted for selection of area), purposive sampling technique was used for (Stakeholders dealing with tomato were interviewed) and snowball sampling (from one stakeholder, the other stakeholders were contacted) to collect information from farmers, commission agents, wholesalers and processors was applied for selecting sample from universe. The sample size was decided based on availability and constraints.  40 farmers (20 from each district),  20 wholesalers (10 from each district),  02 processing units (1 from each district),  20 retailers (10 from each district) and  20 commission agents (10 from each district). 17


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Structured questionnaire was used as a research tool for conducting the interviews and interactions with growers, processors, exporters, transporters and Govt. officials in Uttarakhand, based on the Information provided with the help of both open and closed ended questions by interacting with farmers, retailers and other functionaries and mandis. The data collected were first tabulated then analyzed and inferences drawn and interpreted on the basis of appropriate statistical tool (mean mode, percentage and graphical presentation).

6. Results and Discussion Value Chain of Tomato in Uttarakhand After studying movement of tomatoes through various intermediaries, a flow chart of value chain of tomato in Uttarakhand is shown in Exhibit 1. Seed Companies

Farmers

Produce

Middle Men (Wholesalers, Commission Agents)

Processor

Processing Plant

Different Processed Products like Ketchup, Puree, and Paste

Direct Selling

Direct to Consumers

Mandi

Small Vegetable Shops

Consumers

Exhibit 1 Value Chain of Tomato including all Stakeholders

Exhibit clearly predicts that value chain starts right from the agri- input provider and ends up with consumer as the case tomatoes passes through many intermediaries. Analysis of Value Chain of Tomato in Haldwani and Dehradun Mandi Mandis located at Haldwani and Dehradun revealed that from farmer to consumer, price of tomato increases to 200 per cent and is clear from Exhibit 2 that farmer got 50 per cent of share of consumer rupee (Rs 5 for 1 Kg of tomatoes when price of tomatoes in market was Rs 10 per Kg in the month of March. Out of remaining Rs. 5, 30 percent (Rs. 1.50) was commission of local collector while he made no value addition to the produce. Same was the case when commission agent took the produce from farmer, sold it and charged 8 per cent commission per transaction. After tomatoes reached to wholesalers, they sold it to small retailers at Rs 8 per Kg. Ultimately, it reached to the consumer and its price at that time was Rs. 10 per Kg. Each stakeholder in the value chain was observed, analyzed and discussed in following heads. 18


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Tomato Farmer Sells to Local Collector at Rs. 5/kg

Local collector Buys at Rs. 5/kg from Farmer Sells to Mandi at Rs. 6.50/kg

Local Traders and Mandi Sellers Buys at Rs. 6.5/kg Sells at Rs. 8/kg

Commission agent 8 % Commission per Transaction Commission 0.52 Rs/kg

Small Retailer Sell to Consumer at Rs. 10/kg. Exhibit 2 Costs and Margin at Various Stages of Value Chain

Tomato Producer Uttarakhand has a great comparative advantage in growing a variety of horticultural crops viz., fruits and vegetables as compared to the other states in India. The diverse agro-climatic conditions can make growing these crops highly cost effective and competitive and provide vast opportunities compared to other states. But unfortunately these opportunities have not been exploited by the farmers because they got a little price of their produce in the market as well as bear the post harvest losses in tomato. If they can’t supply their harvested tomato at right time to the mandi, they bear huge losses. Moreover in case of huge production of tomato in the area then also they get very less prices. Main Varieties Grown by Farmers Uttarakhand farmers are using hybrid varieties like Avinash-2, Himsona, Trishul, Naveen, Maharishi, Manisha, Rajni, 9502 (IAHS) etc. These varieties are very popular in Novadkhera, Chorgulia, Duvelbehra, Kishanpur, Kunwarpur area of Golapar (Nainital district) and Shankarpur area of Dehradun district. Farmers grow tomato in two seasons i.e., July – October (in Massourie-Dehradun region) and November – February (in Nainital). Agency to which Farmer Sell their Produce Exhibit 3 shows the preference of farmers regarding buyers of their produce and reveals that 55 per cent of farmers sold their produce to local vegetable collectors only, as farmers did not want to take any kind of risk and fearing of not getting reasonable price at Mandi which might lead to increase in transportation cost and more post harvest losses. 25 per cent of farmers sold their produce at Mandi while 15 per cent sold tomatoes directly to consumers in local haats. And only 5 per cent sold their produce to processors of that area. Farmers sell their tomato in the plastic boxes of 20-25 kg each or wooden baskets of 60 kg each. If 12 ton is production from one acre then there will be 200 wooden baskets or 600 plastic crates. Farmers either sell their tomato to the local collector or directly sell in the mandi to the commission agent. In Dehradun, farmers directly sell their tomato to the main mandi, Dehradun or Local collector collect the produce from farmers on daily basis and bring it to the mandi. Commission agent takes 8 % commission per transaction. Same is the case in Nainital district. Farmers from a local area sell their tomato to the local collector. Local collectors collect the tomato and sell it to the Haldwani mandi which is the main fruit and vegetable mandi of Nainital. In some areas like 19


March 28-30, 2011

Chorgulia, Kishanpur, Kunwarpur in Golapar region, farmers also sell tomato directly to the retailers for minimizing their transportation cost to Mandi.

Exhibit 3 Agency to which Farmer Sell their Produce

There are processors available in the area to which they can sell their tomato but they avoid giving their produce to them as they select only Grade ‘A’ tomatoes and for lower grades, farmer again has to go to mandi or find some other way to dispose off the rest of produce. This ultimately increase the extra cost in terms of post harvest losses and low price for rest of the produce. Cost of Production of Tomato Expenditure incurred by farmers during tomato crop season was noted down so as to calculate input costs. Table.1 shows that average cost of cultivation of tomato is Rs 18150 per acre in the hills of Uttarakhand. Table 1 Cost of Production of Tomato Item A.

Value ( Rs./Acre)

Material Cost 1. Hybrid Seed ( 60 Gm/Acre)

1200

2. Fertilizer

1500

3. Pest Control

500

4. Disease Control

1,000

5. Staking

2,000 Sub-total

B.

C. D.

6,200

Labour 1. Labour + Tractor Charges

2600

2. Intercultural Operations

1000

Sub Total

3,600

Interest on Working Capital (10 % p.a. for 6 Month )

550

Cost X ( A + B + C )

10,350

Packaging Cost 1. Wooden Basket (Rs. 30/Basket)

6000

2. Paper Covering (Rs. 2/Basket)

400

3. Sutli (Rs. 2/Basket)

400

4. Jute Bag (Rs. 5/Bag)

1000

Sub-total

7,800

Cost Y ( Cost X + D)

18,150

E.

Yield ( Ton/Acre)

12

F.

Cost of Production ( Rs./Ton)

1,512.5

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Out of total sample farmers, 72 per cent said that they were not satisfied with the price they got for their produce. Main reason of dissatisfaction was their low share in consumer rupee and 28 per cent farmers said that they were satisfied with the price they got. Farmers’ View Point Regarding Processing Tomato processing opportunities in Uttarakhand was discussed with farmers and only 42.5 per cent farmers had given their produce to processors in one or the other stage of their life. Then, these farmers were asked about the issues involved at that time. As it is clear from Exhibit .4, main issue farmers faced was high rejections. Nearly 47 per cent respondents said that this is the main problem they face with processors. Processor took the quality tomato from them but they had to go to mandi to sell rest of their produce. This increased their overall cost and they could not fetch better price for tomatoes.

Exhibit 4 Issues Involved with Processors

Value Addition Done by Farmers Exhibit 5 speaks about farmers’ response when they were asked about value addition activities being done by them at their own level so as to fetch good prices for tomatoes.

Exhibit 5 Value Addition Activities Done by Farmers

Farmers commented that 82.5 per cent of cultivators graded their produce and commission agent comes to farmer and tell them the grading criteria. When it comes to packing, only 40 per cent of farmers do packing at their field and rest of the farmers take their produce directly to mandi by themselves or sells their produce in local haats. Source of Information Regarding Current Prices of Tomato Exhibit 6 describes the source of information for farmers regarding current prices of tomato. It was surprising to know that no farmer relied on internet services for current prices of tomatoes. 75 per cent of respondents said that mandi is the most convenient and reliable place for information on prevailing prices. 21


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Exhibit 6 Source of Information Regarding Current Prices of Tomato

Local Collector Local collectors go to nearby areas of Dehradun Mandi where tomato is being grown. Farmers want to save transport cost, loading and unloading labour that’s why they sell their tomato to the local collectors. Local collectors have to bear the cost of transportation, cost of loading and unloading, weighing charges, commission of the agent, market commission. Generally local collectors transport tomato in small tempo and small vans from the nearby areas to Mandi. They keep a margin of Rs. 1- 1.5 /kg for tomato in the month of March - April. Table.2 gives a description of various costs borne by local collector. Table 2 Cost borne by the Local Collector S. No.

Item

Value (Rs.)

Value ( Rs./Kg)

1.

Transportation Cost

Rs. 250/ tempo (1 tempo = 10 quintal)

0.25

2.

Labour Cost ( Loading + Unloading)

Rs. 5 /wooden basket (1 basket = 60 kg)

0.083

3.

Commission to Bazaar Mahsul

Re. 1/wooden basket (1 basket = 60 kg)

0.017

4.

Weighing Charges

Re. 1/wooden Basket

5.

Commission

8 % per transaction

0.017 0.52 (Rs. 6.50 * 0.08 )

Total Cost borne by Local Collector

0.887

Profit Margin/Kg

0.613

Commission Agents In Dehradun, Majra vegetable market mandi is the main fruits and vegetable mandi with 14 commission agents present dealing with transaction of tomatoes. In Dehradun mandi farmers comes from Raiwala, Doiwala, Narsen to sell their tomato. Traders come from Haldwani, Raiwala, Shyampur, Motichur and Vikasnagar. Commission agents take 8 per cent commission from the farmers for their services. Tomato is a perishable commodity. Their price fluctuates time to time in the market. In Exhibit.7, we can easily see the price fluctuation of tomato in Dehradun mandi. This price fluctuation is mainly because of variation in supply of tomato due to different maturity time of different varieties and in different areas. Like in Massourie belt, tomato matures in the month of July and continues till October. This led them to fetch high prices for their produce as demand is high with low supply and tomato that comes in market in March gets lower prices because of huge supply in the market. 20 20 18 16 14

17 14

14 10

12 Price per Kg (Rs) 10 8

6 4

6 4 2 0 October

November

December

January

February

Exhibit 7 Price Fluctuation of Tomato during Last Seven Months

22

March

A pril


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In Haldwani, Daily market mandi is the main vegetable mandi. Here generally local collector comes to sell tomato. They bring tomato from nearby areas mainly from Kishanpur, Chorgulia, Kunwarpur etc. of Haldwani region to sell in the mandi. Commission agents take 8 per cent commission for their services. Local mandi sellers and traders from local area buy tomato from commission agents. Tomato also comes from the outside of state when there is shortage of tomato in the mandi. Table 3 Various Costs Borne by Commission Agents S. No.



Item

Value

1.

Tax to Bazar Samiti

2.5 % Per Transaction

2.

Tax of Shop to Municipal Corporation

Rs. 300/Annum

Middlemen Middlemen buy tomato from the commission agents according to their requirements of the shop business. Sometimes they have to bear losses because of less demand in market tomato and it becomes rotten when they keep it more than 2-3 days. They keep a profit margin which varies from Rs. 1-3 /kg depends upon quality of tomato. They either sell directly to the consumers or to the small retailers. Table 4 Various Costs Borne by Middlemen S. No.







Item

Value

1.

Labour Charge

Re. 1/crate

2.

Tax of Shop To Municipal Corporation

Rs. 300/annum

Small Retailer These small retailers buy tomato in small amount from the mandi and sell in the various locations of Dehradun and Nainital. They sell tomato to the customers at higher prices. They have thela. They pay Rs. 15 /day to the Municipal Corporation for their thela as tax. Consumers Ultimately tomato comes to the consumers. Consumers prefer large, shinny, reddish and fresh tomatoes. Customers pay Rs. 10/kg for good quality tomato in month of March. Processors Normally processors buy tomato directly from the farmers.  Kanak Foods, Haldwani  Price of tomato sauce – Rs. 30/500 ml bottle.  Availability of tomato – peak season February  Characteristic of tomato required – tomato should not be less than 50 gms, should be disease free and spotless. They procure tomatoes directly from Haldwani mandi. Reason stated was that they need it quite often but the frequency of procurement is not regular. So whenever they feel need they procure it from mandi and another reason was that the growers were not ready to sell their produce to them but prefer selling to the mandi.  Zaika, Bhimtal  Type of processed products – tomato soup powder Tomato soup powder is not the main product of this processor, though they make fairly good quantity of it. So the amount of tomato required is quite less as compared to other processors. That is why they procure C grade tomato from local farmers at lower rates and in required quantity.

Problems of Stakeholders of Value Chain  Problems Faced by Producer  Price Fluctuation at the Mandi – Production of vegetable differs from season to season. When there is huge production of tomato then the farmer gets very little price in mandi due to huge production. Sometimes when there is low production or availability of tomato is low at mandi they get very good prices. Sometimes they have to sell their tomato at a very low price of Rs. 0.50 – 1.00.  Payment Problem – farmers sell their produce either at the mandi to commission agent or the local collector. They buy their produce but pay them their money at a later date because of which farmers does not get money at the time when they require it. 23


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





Storage Problem – There is no cold storage facility in the area. So farmers cannot put their tomato for longer duration to get right prices. Tomato is a perishable commodity. After harvesting farmers have to sell tomato whatever is the price available to them. Due to unavailability of cold storage they cannot keep it in storage. Rather, they do not want to keep their produce anywhere even if there is any storage facility because they do not want to invest anything in post harvest management.  Availability of Good Quality of Seeds – farmers doesn’t know what good varieties to grow in the area are. Processors also require good quality of tomato for processing purposes. So here lies the main gap. Farmers purchase seeds on the basis of yield and not pay much attention to quality of produce. Problems Faced by Middlemen  Farmers have started to sell their produce directly to small retailers. This practice is being followed everywhere by educated farmers. By this, they save their transportation cost and they get mandi prices at their doorsteps. Large farmers are avoiding giving their produce to local collectors as they get better price. And at the same time, they are expending less in grading and packaging. Problems Faced by the Processors  Non-availability of Right Processing Varieties - According to the Industry, because of the non-availability of suitable varieties for processing, the raw material to finished product ratio is very high in India as compared to abroad. As against 4 tones of tomato required for one tone of tomato paste concentrate of 28° Brix, abroad, in India, 8 tones of tomatoes are needed for making one tone of tomato paste concentrate of 28° Brix, because of non-availability of suitable processing varieties of tomato. Due to this problem processors require more tomato for processing. If farmers can provide them tomato which of processing variety then they can also make one tomato paste from 4 tone of tomato.  Price offered to the Farmers - Processors are offering very low prices to the farmers because of which they sell tomato to the mandi. At mandi they get higher prices for tomato.

Farmers’ Point of View According to response received from farmers, 55% of farmers have land holding between 1 to 5 acres. In hilly areas, it is quite difficult to measure accurate land holding because of geographical structure of the state. Table.5 shows the land holdings of farmers in Nainital and Dehradun districts of Uttarakhand. Table 5 Farmers Classification According to Land Holding No. of Farmers

Size of Land Holding (Acre)

Nainital

Dehradun

10

4

0

Most of the tomato growers, who have greater land holdings, belong to the plains region of Nainital. This area is main source of tomatoes for whole Uttarakhand round the year. Some more details about farmers of Uttarakhand are as under:  Average Production of tomato in the area is 12 ton/acre in Nainital and  Average Cost of cultivation of tomato is Rs. 18,000 - 19,000 / acre  Tomato cultivation season: Most of the farmers are growing tomato mainly in two seasons which are July – Oct and Nov – Feb. But small no. of farmers is growing tomato in three seasons throughout the year.  Mode of transport used by farmers to sell tomato: Tempo, mini van.  Response of the farmers for the cause which they feel is the main cause of their tomato crop damage. It is quite clear from Exhibit 8 that major reason of crop loss in tomato is mainly occurrence of diseases. In hilly areas, tomato fruit borer (Helicoverpa armigera) is major insect and late blight is main disease which causes significant losses in crop produce. From farmers’ response, it is quite clear that 45 per cent farmers consider that major reason for low produce is occurrence of disease and that too, late blight and tomato mosaic virus. 24


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Different Agencies from where farmers are buying tomato seeds;  Seed shops situated at Haldwani Market  Seed shops of Dehradun  Local dealers of various seed companies Exhibit 8 Reasons for Losses in Tomato Yield 18 18 16 14 12 Number of farmers

10

8

8

7

6

6 4

1

2 0 Rain

Pest

Disease

Storage Problem

Water Availability

Type of damage

7. Conclusion After studying the whole value chain, it was found that farmers are getting only Rs. 5 out of Rs. 10 paid by the customer. Thus his share in the whole value chain is only 50 %. This value chain has increased in length due to various intermediaries. Share of farmers should be increased so that their income from tomato production would increase. Processor are not getting tomato as raw material from the farmers because of the offered price to farmers and fluctuating demand. There is huge potential of processing industry in the area but for this there should be an understanding between farmers and processors for tomato variety as well as price.

8. Suggestions 









Establishment of Small Cold Storage Near Mandi To extend the shelf life of fruits and vegetables and create time and space utility, the cold storage of fruits and vegetables is recommended. This will reduce post harvest losses in perishable commodities like tomato. Minimum Support Price for Tomato Tomato price fluctuates throughout the year. When there is huge production of tomato, price of tomato reduced very sharply. At that time farmers bears huge losses because they even could not cover their production cost. Government should also declare Minimum Support Price for tomato. Backward and Forward Linkage It is important to develop the farmers access to backward (seed, fertilizer, pesticide and other inputs) and forward (trading, wholesaling, export) markets for improving their profitability. This can be done in any of the following ways:  ICT Portal providing market information (price, demand and supply situation), name and address of service providers and other value chain actors. The portal can also assist in providing critical current issues affecting production and sales of tomatoes such as farming practices, pest infestation and measures to take, etc. The portal can seek advertisement from the various commercial service providers and value chain actors and can become sustainable.  Community Radio can be an effective way to reach large number of farmers at a significantly lower cost. This can be highly effective in the remote areas.  The Farmer’s Forum can also play an active role in sharing and exchanging critical backward and forward linkage information in collaboration with the various value chain actors and service providers. They can hold workshops or discussion meetings with these actors on weekly basis to update information and knowledge. The latest and updated local, state and national level market information should be made available to producers by Market Committees and Marketing Boards through large display boards for developing marketing intelligence among farmers. Village level procurement centers should be established in potential areas. 25


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

Farmers should be encouraged to form their own marketing co-operative societies in order to reap the benefit of economies of scale (low handling cost, transportation cost and storage cost). By this both farmers and consumers will be benefited.

1.

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9. References 2.

3.

4. 5. 6. 7. 8. 9. 10.

11. 12. 13. 14.

15.

16. 17.

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