Steps to revive cashew sector: Kerala minister

Industries Minister P. Rajeeve said steps are being taken to revive the cashew nut sector based on the report of an expert committee appointed by the state government.

Responding to a motion by Kovoor Kunjumon, Member of the Legislative Assembly, seeking to draw attention to the problems of cashew nut workers and reopen closed private cashew nut factories in the state, the minister said the ₹30-crore package that was announced for the sector included ₹20 crore for transferring the employer’s share of PF and ESI liabilities of workers, ₹5 crore for modernisation of shelling operations and ₹5 crore for the private sector to create a women-friendly workplace. The minister said that applications were already being received.

The minister said the import duty on raw cashews imposed by the Union government, fall in production in the state and high cost of production have brought the cashew sector to its knees in the last decade. To address this, the government has taken certain steps which have brought some changes. Last fiscal, 14,000 tonnes of raw cashews were imported, the highest in recent times. The government has provided financial assistance of ₹293.31 crore for this. This year too, ₹40.81 crore has been earmarked for import of raw cashews.

As many as 138 working days were allocated for work in factories belonging to Kerala State Cashew Development Corporation (KSCDC) and 156 working days for work in Kerala State Cashew Workers Apex Industrial Cooperative Society (Capex).

The government has also provided financial assistance of up to ₹40 lakh to small and medium cashew units, which were operational in March 2020 and are in existence at present. This could be 40 per cent of the cost of acquisition of fixed assets for the general category and 10 per cent additional assistance, subject to a maximum of ₹40 lakh, as capital grant for Scheduled Castes and Scheduled Tribes, youth and persons with disabilities.

The government has approved an amount of ₹2.69 crore for extension of interest subsidy at the rate of 50%, up to a maximum of ₹10 lakh, on interest paid by cashew nut sector units on working capital loans.

The minister said banks have agreed to waive interest on loans up to ₹2 crore as a one-time arrangement if ₹1 crore is repaid. For loans between ₹2 crore and ₹10 crore, only 60% of the loan has to be repaid, with an initial repayment of 10%. While the scheme has been praised and the response from most banks has been favourable, most cashew nut mills have not been able to pay even the initial 10%. That was the reason why it was extended till December 31 this year, Mr Rajeeve said.

The minister said the minimum wages in the sector had been increased by 23% in response to the demand of trade unions under the Minimum Wages Commission set up to review the minimum wages of workers in the sector. However, the minister noted that this had led some private factories to the brink of closure.