Recently, the Ministry of Commerce and Industries, Govt of India, put cashew nut export under the Agricultural and Processed Foods Export Development Authority (APEDA), earlier it was under the Cashew Export Promotion Council of India. Will it make a difference on the performance of Indian cashew economy?
India is the global leader in the world cashew economy. First, a cashew factory in the world was set up in India. This industry is playing an important role in the socio-economic development in several states of India. India exports cashew to more than 60 countries. Cashew is the fourth largest exportable horticultural crop in India.
India is the leading cashew kernels exporter, however, recently there are fluctuations in cashew trade due to the strong competition from countries like Vietnam, Brazil and from Some African countries. Though India is one of largest cashew producing countries in the world, domestic raw cashew production is not sufficient to meet the demand of processing units and hence they have to import raw cashew. Import duty had been reduced from 5% to 2.5% so that the processing units get enough raw materials at cheaper prices. Imported cashew is cheaper than the domestic cashew by Rs 27.65 per kg. Further, the Cashew Export Promotion Council of India (CEPCI) has decided to charge NIL import duty on cashew. This will drastically increase imports of raw cashew and reduce the demand for domestic cashew. Along with that pandemic added further problems in this industry by disturbing the entire supply chain. These are the reasons for low prices in the present season in the domestic cashew market. Over the period of time Indian has created special demand in the international market due to its unique taste. Imported raw material hampers the Indian cashew brand as it differs in taste and at the same time it is disturbing the rural cashew economy. Thus, there is a need to relook at the cashew imports and export policy.
Ban on the import of raw cashew is not the solution as half of the Indian cashew processing plants are dependent on imported raw material. Hence import of raw cashew into India is imperative for the survival of the industry. Considering the interest of domestic farmers, there must be a threshold price limit of Rs 125 per kg on imported raw cashew, below which import should not be allowed.
Ample care must be taken to ensure that cashew exports are not hampered as there is tough competition from various countries. Exports influence domestic prices; hence healthy cashew exports are beneficial for both farmers as well as the processors.
The difference between the purchase price of Cashew nuts and the threshold price of Rs 125 per kg should be subsidised by state governments so as to make agriculture sustainable. The Goa government is paying a subsidy of Rs 20,000 to Rs 25,000 per tonne to cashew farmers, but other states are not offering any help.
Promoting Geographical Indications of cashew, value-added products like cashew apple wine, juice, candy etc.
Although India is the leader in the world cashew economy, the industry depends on imported raw cashew for processing. The suitable agro climatic conditions for cashew cultivation in India offer huge scope for further cultivation. Cashew nuts bring in huge foreign exchange when exported and form the back-bone of the rural economy of India’s coastal states. Therefore, it should come into the Atmanirbhar Bharat scheme, announced by Prime Minister Narendra Modi. Further efforts are needed to increase the competitiveness of Indian cashew economy in the long-run. Despite its best efforts, the Cashew Development Board is unable to reach all across India due to lack of resources. Because of the gap between the apex agency and cashew farmers, various schemes, activities, and training programmes are not reaching all farmers. To implement the mandate of the cashew development board and for the welfare of cashew farmers, there is a need to set up regional cashew boards in many states especially like Maharashtra which is the leader in cashew production in India.
Structural policy changes are needed to improve the export performance of Indian cashew. On this background promoting cashew export through Agricultural and Processed Foods Export Development Authority (APEDA) is a welcoming step. APEDA as an export promotional agency has more resources and networking. APEDA is the leading export promotion council dealing with half of India’s exports. It is expected cashew export performance will improve by the reach of experience of APEDA.