Analysis of tomato prices in production and consumption markets in India: Policy imperatives

Tomato production has been growing over the years. This is mostly due to area expansion though yield enhancement also contributes to some extent. Price volatility was observed in both production and consumption markets. Consumption market Kolkata recorded the highest prices among all the selected markets and thus giving scope of absorption of surplus from the production areas/markets. The co-integration analysis exhibited bidirectional price transmission from Kolkata to other markets thereby indicating instantaneous transmission of price signals. Enormous losses occur at different stages of handling of tomato and one way of reducing this is to divert as much as possible for processing. The export of tomato and tomato products has been increasing and export of processed products like tomato ketchup/sauces has been steadily growing. Further, import of these products has, of late, come down. Price volatility is one of the most important constraints faced by the tomato growers across the country. Highly volatile price fluctuations in the market often make it un-remunerative for the growers even to harvest the produce. Price prevalent in the consumption market is higher than the price in the local production market. In view of this, the ‘Operation Green’ facility (Kisan Rail) extended to the farmers may be utilized for transportation of tomato to distant Kolkata market and the farmers benefit from the higher prices. In the event of glut, there should be a provision to divert the surplus for processing in to intermediate (puree, paste) and finished products (ketchup or sauces).Sun dried tomato is another product with lot of potential to reduce the post harvest losses. The farmers need to be encouraged perhaps by making available the solar driers. It was observed from the analysis that due to shortage/deficit during summer months the price goes up beyond the reach of the consumer. This necessitates development of high temperature tolerant/resistant varieties to ensure suffcient supply of tomato in the markets thereby ensuring stability in prices.