Curated By: Business Desk
Last Updated: August 10, 2023, 13:32 IST
The prices of tomatoes have been touching the sky for the last two months. The basic staple crop in the kitchen is now available at more than Rs 200 per kg in various regions of India. According to a report by Money Control, at the beginning of the year when the Agricultural Produce Market Committee (APMC) mandis slumped the rate of tomatoes at Rs 1.5 per kg due to a supply glut, the farmers were having trouble recovering the cost.
The agitated farmers in the form of protest dumped the crop on the streets and shifted to cultivate different crops. But due to the high demand for tomatoes in the market, many farmers have now shifted to cultivating tomatoes to earn a profit. Speaking to a media portal, Hari Narayan Reddy, hailing from Chikkaballapur near Bengaluru, said that the cultivators are getting around ten times more than the usual rate for their produce due to the high demand.
“A 15-kg crate [of tomatoes] is going upwards of Rs 2,000 here. Good quality tomatoes are fetching even higher. The farmer has to pay around 10 per cent of this for agent commission, labour cost, transport charges etc,” Reddy added. He also mentioned that most of the tomato cultivators gained huge profits at the beginning of July.
Farmers who are not selling their crops at APMC mandis are going directly to wholesale markets to save the agent commission but the per kg cost is even lower. Even with the commission and other attendant overheads, the tomato farmers are operating at a profit margin more than big NIfty companies.
If we speak about the operation profit margin of the Nifty companies, then Bajaj Holdings and Investment are at 90.58 per cent in FY23. They are followed by HDFC AMC at 89.21 per cent, Power Grid at 88.86 per cent, Muhhot Finance at 78.39 per cent and Adani Green Energy standing with 76.03 per cent.
To give a better perspective, the expenses involved in the cultivation of tomatoes can vary between Rs 4 per kg to over Rs 20, influenced by factors such as market proximity, agent commissions and labour expenses. And even considering the higher end of this cost spectrum, farmers are generating substantial profits as retail prices remain well above Rs 200 per kg.
