The "tomato craters" are supposed to protect the young plant from cutworms, and also block any weeds from growing under the plant. Also, according to research, the red color is supposed to be beneficial for the tomato plant. I believe that they are also supposed to work well with pepper plants.
I bought them from a garden supply on line, Jung Seeds. They're not cheap though, 25 dollars U.S. for a set of 3. I bought 2 packs last year to see how they work, and bought 2 more packs for this garden season. They're pretty durable and will probably last for a lot of years.
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Wow that sounds great. You guys seem to have a whole set of bug problems I never get!