Agri Business

Karnataka’s cashew industry seeks relief measures to deal with pandemic impact

AJ Vinayak Mangaluru | Updated on April 06, 2020 Published on April 06, 2020

The spread of Covid-19 has completely thrown the industry out of gear

Calls for assistance to pay wages, steps to ease liquidity

To help cope with the coronavirus outbreak and subsequent lockdown, the cashew industry in Karnataka has sought relief measures from the State government.

Terming the cashew industry a highly labour intensive one, Subraya Pai, President of the Karnataka Cashew Manufacturers’ Association (KCMA), told BusinessLine that cashew manufacturing units in the State employ around 60,000 women directly in the factories and another 40,000 in the farm and its value chain.

Covid-19 has completely thrown the industry out of gear and will jeopardise the employment of these women, many of whom are their families’ bread-winners, he said.

The KCMA has written to the Karnataka Agriculture and Horticulture Secretary, seeking relief measures, he added.

The cashew manufacturers will find it difficult to pay normal wages under the present conditions, said Pai. ESI Corporation has not been very effective for most employees so far, he added. It has a huge corpus built over the years, he noted, requesting the government to direct ESI to pay the salary/wages during the lockdown period.

Subsidy release

Many cashew manufacturers had sought incentives from the government under the Agribusiness Policy for agro-processing industries, said Pai. Stating that the sanctioned subsidy for the sector has not been released since 2017, he requested the government to do so now to help deal with the liquidity crisis. “This will provide a big relief to the industry to tide over its liquidity problem to some extent,” he said.

The raw material being seasonal, the industry is required to buy sufficient raw cashewnuts to process round the year. This requires it to have a huge working capital for procurement.

The Karnataka government collects a very high stamp duty for both hypothecation and equitable mortgage, making bank funding very expensive for manufacturers, said Pai. He requested the State’s Agriculture and Horticulture Secretary to take up the issue with the Finance Department to reduce the stamp duty.

Though cashew is a horticulture produce, the Karnataka Agricultural Produce Marketing Act has included it under agricultural produce and notified it in the schedule of the Karnataka Agricultural Produce Marketing (Regulation) Act, 1966. The regulation of this commodity has complicated its marketing, which costs the farmer 1.5 per cent of its value, said Pai. He requested the government to de-notify raw cashewnuts from the Schedule of the Act.

Published on April 06, 2020

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