The Hindu Business Line : Study highlights scope for raising cashew production

A STUDY of the cashew industry by the WTO (World Trade Organisation) Cell of the Kerala Agricultural Department emphasises that there is ample potential for India, particularly Kerala, to increase area of cultivation and production of nuts to meet the demands of the processing industry.

The specially appointed Swaminathan Commission also had recommended spreading of cultivation to the north Malabar districts since the low soil moisture content in the region, otherwise unfertile, is suitable for cashew crop. This will also help initiate a broad-based agricultural development of the region.

Domestic production is not sufficient to meet the demands of the processing industry. India sources its imports from West African countries. Not surprisingly, the domestic price of raw cashew nuts has seen an increase from Rs 27.26 per kg in 1995 to Rs 32.13 in 2004.

A comparison with the unit price of imports and the domestic price of raw nuts indicates that import of raw cashew nuts is being done at higher prices. The WTO Cell has taken 1995 as the reference year to assess the performance of the cashew sector in the post-WTO phase.

Fall in prices: The domestic prices of raw nuts and cashew kernels peaked in 2000 when they reached Rs 41 and Rs 265.43 per kg respectively. Thereafter, they have headed southwards. The domestic unit price of cashew kernels declined from Rs 265.43 per kg in 2000 to Rs 178.96 this year, which also coincides with the removal of quantitative restrictions on imports by India.

But the fall in prices cannot be attributed to trade liberalisation as cashew never featured in the restricted list of imports.

On the other hand, it was the slump in international prices due to increased supply that contributed to the decline in domestic prices. The fall in prices had its impact on production, which declined in 2000-01 and 2001-02.

Shift to rubber crop: In Kerala, production has been decreasing as farmers have been shifting to other remunerative crops such as rubber.

The State's share in all-India production of cashew declined from 33.4 per cent in 1995-96 to 17.7 per cent in 2003-04. The area under cultivation declined from 1.19 lakh hectares to 1.01 lakh hectares, a fall by 15.1 per cent.

Another notable feature is that despite the fall in area under cultivation, production has looked up. During the span of one year between 1994-95 and 1995-96, area under cashew in the State came down by 37,000 hectares, while at the national level it went up by 58,000 hectares. Still, production registered an increase of 21,000 tonnes in the State during that year.

Livelihood for lakhs

THIRUVANANTHAPUAM: In India, approximately nine lakh farmers were engaged in cashew cultivation in 2003-04 of which one lakh were from Kerala. Another two lakh workers, mostly women, are employed in 429 cashew processing units in Kerala.

The country's production during 1995-96 to 2003-04 increased from 4.18 lakh tonnes to 5.35 lakh tonnes, a rise of 27.9 per cent. Cashew production maintained an increasing trend till 1999-2000 when it peaked to 5.20 lakh tonnes.

There was a setback in production in 2000-01 and 2001-02, which recovered to 5 lakh tonnes in 2002-03 and to 5.35 lakh tonnes in 2003-04. The area under cultivation steadily increased from 6.35 lakh hectares in 1995-96 to 7.80 lakh hectares in 2003-04, a rise of 23 per cent.

Vietnam is emerging as a major competitor for India in production and exports of cashew. Currently, Vietnam is facing unfair competition of raw nuts as India controls Africa's supply of raw nuts, forcing Vietnam to buy indirectly through Indian traders who inflate prices.