KOLLAM: Cashew is slowly disappearing from Kollam. Once the cashew capital of the world, the nut processing factories in the region which employed millions of women workers are gasping for breath due to relatively high wages and increasing import cost of raw nuts.
Of the 864 cashew factories operational in Kollam till a decade ago, over 750 have closed down. According to officials, only 95 cashew factories are operational now. Of these, many function at just 50% of their capacity. With the industry in crisis, about 2.5 lakh cashew workers have lost their jobs.
Cashew factory owners express dissatisfaction over the lack of financial assistance for the revival of the industry. The sector was looking to the state and central governments for assistance. However, the Union budget has ignored the industry, they said. The state budget has set aside Rs 56 crore for the industry. However, the fund is for those operating under the purview of the Cashew Corporation. Private cashew owners feel that they have been completely let down by both central and state budgets.
The crisis started six years ago. The industry used to provide direct employment to over 3 lakh people and support another 10 lakh. More than 750 factories have remained closed for six years, said Cashew Industry Protection Council.
“As of now, accounts of 300 entrepreneurs in 22 banks have been classified as NPA. So far, five entrepreneurs have committed suicide owing to mounting pressure from banks and other NBFCs,” said council president D Mathukutty.
‘Financial support of over Rs 600 crore vital for cashew sector’s survival’
“Things got worse for the industry in 2016, when the union government raised the import duty on raw cashews from 0% to 9.6%. The main goal of instituting the import duty was to encourage domestic cashew production. However, the imposition of import duties and the provision of salary increases shattered the cashew industries. Industries have continued to collapse since then, and the industry is now taking its final breath,” said K Rajesh, founder, of the Cashew Industry Protection council.
The real issue faced by the industry is a lack of demand and buyers for immovable collaterals, said council secretary A M Shikkar. “We are unable to opt for a one-time settlement scheme (OTS). If the government grants us at least the initial payment of 10%, it would be a motivation to move forward with OTS,” he added. Cashew factory owners say financial support of more than Rs 600 crore is essential for the survival of the industry. Moreover, the factory owners are disappointed over issues with OTS.
“We have been demanding either a sufficient financial package for the industry or, at the very least, proper implementation of the OTS scheme so that we can move forward. But now we’re saddled with debt. Already, 80% of the industry has relocated to states such as Andhra Pradesh and Tamil Nadu. If the government does not act quickly, the entire sector will collapse in the coming months,” said G S Susheelan Pillai of Vaishnav Cashews, Kollam.
On Thursday, the Industrialist- Labour Joint Strike Committee took out a protest march to the SL BC headquarters in Thiruvananthapuram alleging that the banks’ policy destroy the cashew industry. Meanwhile, the Cashew Corporation plans to increase domestic sales from 10% to 50%. S Jayamohan, chairman of the Kerala State Cashew Development Corporation told TNIE that Kerala cashew has a distinct flavour and taste and that the corporation intends to capture domestic market by capitalising on this distinction. The corporation will soon appoint sales representatives in all districts. Their target will be to generate demand for Kerala cashew from hotels, tourism centres, temples, sports centres, and supermarkets.