Six tonnes of tomatoes, a price crash, and no FSSAI licence yet
An FPO in Daringbadi, Kandhamal district, has collected 6 t of tomato from 40 small farmers in the third week of November. The nearest wholesale market is Bhubaneswar, 250 km away; transport costs 4,500 rupees per 2 t truck and the quoted price there is 6 rupees per kg, with about 12% rejection on arrival for bruising and over-ripeness. Local traders offer 5 rupees per kg at the farm gate but will lift only 1.5 t. The FPO has 40,000 rupees of working capital, a pulper rated at 100 kg per day, an LPG-fired open pan, a refractometer, some glass bottles, and no FSSAI licence - the application is pending with an expected decision in 25 days. Ambient temperature is 22-28 degrees C with 60% relative humidity. The consignment arrives with about 15% culls (cracked and rotting fruits) that are screened out at the shed. Prices at Bhubaneswar are expected to stay weak for another week and then rise. A decision is needed within 48 hours.
1. Work out the net realisation for the three routes open to the FPO - local sale, transport to Bhubaneswar, and processing - and recommend one, showing your arithmetic.
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Start from 6,000 kg, of which 15% (900 kg) is culled at the shed, leaving 5,100 kg of saleable fruit. Processing is limited by the cull fraction and by throughput.
Route 1 - local only. The trader lifts 1.5 t at 5 rupees = 7,500 rupees. The remaining 4,500 kg has no buyer today and will rot at 22-28 degrees C within three or four days. Net for the whole lot: 7,500 rupees and 4.5 t of waste.
Route 2 - Bhubaneswar. Treat the 5,100 kg as the consignment. Freight: 5,100 kg needs 3 trucks of 2 t = 13,500 rupees, part-loading the third. Arrival rejection of 12% leaves 4,488 kg at 6 rupees = 26,928 rupees. Add loading, unloading and commission at roughly 2,000 rupees. Net: 26,928 - 13,500 - 2,000 = 11,428 rupees.
Route 3 - split. Sell 1.5 t locally at 5 rupees = 7,500 rupees the same day, and send the remaining 3,600 kg to Bhubaneswar: two 2 t trucks at 9,000 rupees, 12% rejection leaves 3,168 kg at 6 rupees = 19,008 rupees, minus 9,000 freight and 1,500 handling = 8,508 rupees. Total 16,008 rupees with no dependence on the processing line.
Route 4 - processing all 5,100 kg. At 65% pulp extraction, 5,100 kg gives about 3,315 kg of pulp at roughly 5 degrees Brix. Concentrating to a 12.5 degrees Brix puree gives about 1,326 kg. But the pulper handles 100 kg a day and the open pan far less; this would take more than 5 weeks while the fruit has 3-4 days of life. Processing the whole lot is physically impossible.
Recommendation: Route 3. It clears the fruit within 48 hours, uses the trader and the wholesale market together, and does not depend on a licence the FPO does not yet hold.
2. The FPO chairman insists on processing 1 t into tomato puree and selling it in bottles next month. What do you approve, what do you refuse, and what process protocol do you give?
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Refuse commercial sale of processed puree before the FSSAI licence is granted. Selling processed food without a licence exposes the FPO to prosecution and, more practically, to a trader or retailer refusing the entire stock. Nothing about the tomato justifies that risk when 5 t can be sold fresh this week.
Approve a 1 t trial batch, clearly marked as a trial, used for product testing, shelf-life study and farmer training, with records kept. By the time the licence arrives the FPO will have a validated process, a label, and cost data rather than a first attempt.
Protocol for the trial batch
- Grade: reject cracked and rotting fruit; wash in clean water with 1-2 ppm chlorinated water, then rinse.
- Blanch at 90-95 degrees C for 2-3 minutes to inactivate enzymes and loosen skins; pulp and remove seeds.
- Add salt at about 1% and sugar only if needed for taste; add ascorbic acid at about 200 ppm to protect colour.
- Concentrate in the open pan to 12.5 degrees Brix, measured on the refractometer, stirring continuously to avoid scorching. The FSSAI standard for tomato puree is not less than 12% total soluble solids.
- Fill hot at 90 degrees C into clean, sterilised glass bottles, leave headspace, cap immediately, and invert for 3 minutes to sterilise the cap; cool in air.
- Label with batch number, date and Brix. Store away from light. Expect about 12 months of shelf life if the hot-fill is done properly; check the seal and Brix at 1, 3 and 6 months.
- If a chemical preservative is used later, it must be within the limit permitted for that specific product category under the current FSSAI regulations - verify the category before the commercial batch, not after.
Record the actual yield from the tonne. It will be the number the FPO needs for its pricing.
3. What should the FPO change before next November so that the same crisis does not repeat, given its limited capital?
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The crisis is caused by concentrating all sales in one week with one product and one buyer. The fixes are sequencing and information, not big equipment.
Spread the harvest. Advise the 40 farmers to stagger transplanting across three dates three weeks apart, so that the FPO handles 2 t a week rather than 6 t in a week. This alone removes the fire sale.
Grade at the farm, not at the shed. Provide crates instead of gunny bags, harvest at the breaker stage for distant markets, and grade into two classes. The 12% arrival rejection is largely a packing failure, and it is pure loss.
Build 3-5 days of holding capacity. A zero-energy cool chamber, brick and sand with a wet-jute top, costs a few thousand rupees and holds temperature 10-15 degrees C below ambient. That gives the FPO the option of waiting a week for prices to firm, which is the option it lacked this time.
Complete the licence and build one product. Finish the FSSAI process, then standardise a single product the pulper and pan can actually make, at a scale the market can absorb - puree for local retailers and hotel supply, not a national brand. Determine the break-even price from the trial yield before committing.
Contract before harvest. Tie up one Bhubaneswar wholesaler and one institutional buyer, a hostel or hospital mess, with a price band agreed in October. A standing buyer changes the negotiation from a 48-hour panic to a normal transaction.
Working capital. 40,000 rupees cannot carry 6 t and a processing trial. Approach the horticulture department's FPO support schemes and NABARD for a small working-capital line secured against the license and the buyer contract, and keep a reserve for freight, which is where the margin actually disappears.