Tomato Growers Outperforming Large Corporations in Profit Margins
Tomato prices have been really high for the past two months. In different parts of India, they're being sold for more than Rs 200 per kilogram.
Tomato prices have been really high for the past two months. In different parts of India, they're being sold for more than Rs 200 per kilogram. Earlier this year, the prices were very low, around Rs 1.5 per kg, because there were too many tomatoes in the market. This was tough for farmers because they couldn't cover their costs.
Farmers got upset and protested by throwing their tomatoes away and growing different crops instead. But now, because lots of people want tomatoes, many farmers are growing them again to make money. One farmer, Hari Narayan Reddy, said that they're making about ten times more money than usual because the demand is so high.
He explained, "A box of tomatoes weighing 15 kilograms is being sold for more than Rs 2,000 here. Really good tomatoes are selling for even more. The farmer has to use around 10 percent of this money to pay for things like agents, labor, and transportation."
He also mentioned that most tomato farmers made a lot of money at the beginning of July. Some farmers are not selling their tomatoes at regular markets to avoid extra fees, but they get less money per kilogram.
Even with all the extra costs, tomato farmers are making more profit than big companies in the Nifty index.
On the other hand, big Nifty companies like Bajaj Holdings and Investment, HDFC AMC, Power Grid, Muhhot Finance, and Adani Green Energy are making a lot of profit too. Bajaj Holdings and Investment have the highest profit margin at 90.58% in FY23. HDFC AMC is next with 89.21%, followed by Power Grid at 88.86%, Muhhot Finance at 78.39%, and Adani Green Energy at 76.03%.
To compare, the costs of growing tomatoes can range from Rs 4 to over Rs 20 per kg, depending on things like how close the market is, agent fees, and labor costs. Even with these costs, farmers are still making good money because retail prices are much higher than Rs 200 per kg.
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