Organic and sustainable tomato cultivation
Organic and sustainable tomato cultivation
Business Model Description
Growing tomatoes, taking into account a business model based on sustainable practices.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Pocito City
- Rawson
- 25 de Mayo City
- Caucete City
Sector Classification
Food and Beverage
Development need
Investing in agriculture is one of the most effective ways to produce food, contribute to growth in the food value chain, promote agricultural productivity and improve environmental sustainability. San Juan has a long tradition of agricultural production despite the fact that only 2.4 % of its territory is suitable for agricultural development. (1)
Policy priority
The Government of San Juan has a set of policies and programmes to promote investment in agriculture and its entire value chain, comprising a wide range of small and large-scale activities including agricultural inputs, processing, storage, distribution, wholesale and retail sales and export of agricultural products.(1)
Gender inequalities and marginalisation
In San Juan Province only 21% of agricultural holdings are run by women. Women's participation is concentrated in smaller farms, with 52% of these farms being up to 5 hectares in size (2).
Investment Opportunities
Attracting responsible consumers. This stakeholder group is increasingly demanding organic, healthy and low environmental impact products. Reducing food waste is certainly another opportunity for companies in the sector. Finally, the circular economy has become a key issue for many companies in the sector (3).
Bottlenecks
In terms of the main challenges, improving product traceability, assessing suppliers in terms of human rights and environmental impact will be key to achieving more sustainable business models. Also the commitment to renewable energies and energy efficiency are key to reducing the negative consequences on the environment (3).
Food and Agriculture
Development needs
Tomato consumption is around 16kg per person per year. According to preliminary estimates by the Tomato 2000 Association, the demand for industrial tomatoes in Argentina stands at 650,000 tonnes, while production totals 454,000 tonnes, with a production deficit of around 200,000 tonnes, so there is a clear opportunity for investment. (4) .
Policy Priority
The Government of San Juan has a set of policies and programmes to promote investment in agriculture and its entire value chain, comprising a wide range of small and large-scale activities including agricultural inputs, processing, storage, distribution, wholesale and retail sales and export of agricultural products.(1)
Gender inequalities and marginalisation
In San Juan Province only 21% of agricultural holdings are run by women. Women's participation is concentrated in smaller farms, with 52% of these farms being up to 5 hectares in size (2).
Investment opportunities
Great potential for development in the sector for initiatives that help the environment. However, there are not many cases of circular economy with agricultural products, especially tomatoes, largely because producers are focused on satisfying the growing demand, focusing their investment on the production process itself.
Bottlenecks
In terms of the main challenges, improving product traceability, assessing suppliers in terms of human rights and environmental impact will be key to achieving more sustainable business models. Also the commitment to renewable energies and energy efficiency are key to reducing the negative consequences on the environment (3).
Agricultural Products
Pipeline Opportunity
Organic and sustainable tomato cultivation
Growing tomatoes, taking into account a business model based on sustainable practices.
Business Case
Market Size and Environment
USD 50 million - USD 100 million
According to estimates of companies in the sector, taking into account the market that is currently satisfied, but with a great potential for increase, as current production does not manage to supply the total demand.
Tomatoes destined for industry offer the greatest opportunities for expansion, since the replacement of annual imports alone, which are required to supply domestic demand for the resulting products, would imply some 2.7 thousand hectares and 200 tonnes more production, according to the difference between the volume harvested and the estimated demand for 2020. (4)
Indicative Return
15% - 20%
According to information provided by a company in the sector.
Investment Timeframe
Short Term (0–5 years)
Due to the 120-day production cycle of tomatoes, the crop is also intercropped with garlic and onions between each season in order to avoid soil degradation and achieve a better use of the land.
Ticket Size
USD 500,000 - USD 1 million
Market Risks & Scale Obstacles
Market - High Level of Competition
Impact Case
Sustainable Development Need
The agri-food sector is responsible for 34% of global greenhouse gas emissions (3).
San Juan is one of the main tomato producers in the country, but has not yet achieved an optimal sustainable production level to supply the industries.
Gender & Marginalisation
In the San Juan Province only 21% of agricultural holdings are run by women. Women's participation is concentrated in smaller farms, with 52% of these farms being up to 5 hectares in size (2).
Expected Development Outcome
Increasing the use of renewable energy systems, responsible waste management, changes in farming habits to reduce greenhouse gas emissions.
Increase the area under tomato cultivation in the province, taking into account improvements in cultivation methods and irrigation efficiency.
Gender & Marginalisation
Increase women's employment on tomato farms and also enable them to occupy managerial and leadership positions by requiring investing companies to have gender management policies in place.
Primary SDGs addressed
2.3.1 Volume of production per labour unit by classes of farming/pastoral/forestry enterprise size
The volume of tomato production in the province of San Juan is around 252,000 tonnes (5).
It is hoped to achieve a production of more than 650,000 tonnes in order to satisfy the current demand that cannot be met with the current crops and to surpass them in order to have the capacity to export.
7.2.1 Renewable energy share in the total final energy consumption
Currently 5% of tomato growers use renewable energy sources on their farms.
By 2030, tomato growers are expected to apply no less than 40% of their production on their farms.
6.4.1 Change in water-use efficiency over time
Currently 95% of the tomato plantations in San Juan Province have drip irrigation systems.
It is expected that by 2025, 100 percent of the tomato plantations in the province will have drip irrigation systems.
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Indirectly impacted stakeholders
People
Planet
Corporates
Public sector
Outcome Risks
> Difficulty in obtaining labour.
> Limitations in the use of water used for irrigation as the province is facing a severe drought in recent years.
Impact Risks
Implementation risk: > Failure to obtain the expected results because the prices paid by industries for tomato production might not cover the costs and expectations of producers.
Risk of abandonment: > Abandonment of producers due to attrition as their harvest is often affected by inclement weather and they turn to another type of crop.
Risk of unexpected impact: > Adverse weather conditions complicate crops and put industry at risk.
Impact Classification
What
Increase tomato production as part of a healthy diet. By applying sustainability measures, the environment can be protected by taking better care of water and soil.
Risk
Food quality unsatisfied and environment more affected with soil degradation and lack of water.
Enabling Environment
Policy Environment
The Government of the San Juan Province has included tomato cultivation and industry in its strategic plan, with programmes and projects that promote its industrial and productive development (6).
The Government of the Province of San Juan has included in its strategic plan a programme to strengthen, reconvert, modernise and diversify the agro-industrial sectors in a competitive and sustainable manner (6).
Provincial Government project for the construction of a tomato canning plant with the aim of increasing the Province's installed capacity for processing industrial tomato crops.
Financial Environment
> Tax incentives: Gross Income Tax reductions and exemptions for agricultural activities.
Fiscal incentive programmes such as those managed by the San Juan Investment Agency with fiscal bonds in order to incentivise sustainable investment projects.
Autarchic entities under the Ministry of Production, Investment Development Agency, San Juan Quality Agency, Fiduciary San Juan provide financing lines with subsidised rates for efficient irrigation systems and sustainable investment projects.
Regulatory Environment
Provincial Tax Law 2023 Nº 2485-I establishing differential rates and tax exemptions for agricultural activities.
Marketplace Participants
Private Sector
Companies with sufficient funds to invest in this sector and also the industrial sector for which tomato production is intended.
Government
With its different departments that will support the sector with policies and technical and financial aid.
Multilaterals
Financial institutions and other organisations that will support the sector with different lines of credit.
Non-Profit
Organisations that can support productive projects with grants to apply for sustainable and environmentally beneficial investments and at the same time benefit from them, such as food bank foundations.
Target Locations
Pocito City
Rawson
25 de Mayo City
Caucete City
References
- (1) Investor's Guide "Doing Business in San Juan" - Government of the Province of San Juan - 2021.
- (2) Statistical Dossier "Argentinean agricultural women" INDEC (National Institute of Statistics and Census) based on information obtained from the National Agricultural Census 2018.
- (3) The Agri-Food Sector: Contributing to the 2030 Agenda - Global Compact Spanish Network.
- (4) Tomato production in Argentina - Ministry of Agriculture, Livestock and Fisheries. 12/2020.
- (5) Secretariat of Agriculture and Livestock. Head of the area Martin Gómez Sabatie in an interview with Diario de Cuyo, article "El factor climático pega fuerte en la temporada de tomate para industria" - 01/02/2023.
- (6) San Juan Province Strategic Plan