There are some districts in India that are famous for growing tomatoes. However, during some seasons, the situation is not good for farmers. With a large quantity of harvest, there are reports of farmers throwing away their produce and all their hard work going to waste. Why do you think farmers do this? What role can wholesalers play in such situations? What are the possible ways of ensuring that the tomatoes are not wasted, and the farmers are also not at a loss?
Farmers throw away their tomato produce when supply exceeds demand because of several reasons. When there is excess harvest, prices fall drastically.
If the price falls below the cost of harvesting, transporting, and selling the tomatoes, farmers lose more money by selling than by discarding the crop. Additionally, tomatoes are perishable and cannot be stored for long without proper facilities.
Wholesalers play a crucial role in such situations. They can help by connecting farmers to wider markets beyond local areas, providing storage facilities including cold storage for perishables, assessing demand across different regions and directing produce accordingly, and processing excess tomatoes into products like tomato paste, sauce, or puree.
To prevent waste and protect farmers, several measures can be taken:
First, improve cold storage and warehouse facilities to store excess produce. Second, develop better transportation networks to reach distant markets. Third, establish food processing units near farming areas to convert perishable produce into longer-lasting products.
Fourth, create market information systems to help farmers understand demand patterns. Fifth, government intervention through minimum support prices and procurement during surplus seasons. Sixth, develop export markets for excess produce.
The chapter mentions that wholesalers have warehouses and cold storage facilities (page 11-12) and that they 'assess how much product is required by retailers' to maintain stock.
Explanation
The chapter discusses the role of wholesalers on pages 11-12, explaining how they 'buy goods in large quantities from the producer' and store them in 'warehouses called godowns' with 'cold storage facilities' for perishables. The chapter also discusses government's role in controlling prices (page 19) and setting minimum prices for agricultural products to ensure farmers don't incur losses. The onion example on page 20 discusses how supply shortages affect prices.
Solution Steps
Farmers discard tomatoes when supply exceeds demand and prices fall below harvesting and transportation costs
Tomatoes are perishable and cannot be stored without proper storage facilities
Wholesalers can connect farmers to wider markets and provide cold storage facilities
Wholesalers can assess demand across regions and process tomatoes into paste, sauce, or puree
Improve cold storage and warehouse facilities to store excess produce
Develop better transportation networks to reach distant markets
Establish food processing units near farming areas
Create market information systems to help farmers understand demand patterns
Government should intervene through minimum support prices and procurement during surplus
Develop export markets for excess produce