Crisis-ridden cashew industry in Kerala seeks revival with restructured loans

THIRUVANANTHAPURAM: Grave crisis in the cashew industry has forced the cashew factory owners to write to the Union Minister of Commerce and Industry Suresh Prabhu and to the State Cashew industry Minister J Mercykuttyamma demanding speedy revival measures and to restructure the loans offered by banks. Though around 250 cashew factories were reopened recently from the over 650 cashew factories that remained shut down since the last 10 months, 400 factories are yet to reopen leaving nearly two lakh people jobless.Many are on the streets as their houses on security have been taken over by banks over non-payment of loans.
Crisis-ridden private cashew factory owners of the Medium, Small and Micro enterprises (MSMEs) observed protest on the Secretariat premises here on Monday. “We met the Chief Minister (CM) Pinarayi Vijayan and Cashew sector Minister Mercykuttyamma seeking to restructure the loans offered by banks into long-term loans, which could be repaid in the next seven years and to reduce the interest rates of the bank loans. The state government has to intervene at the earliest to save the cashew sector,” Saseendran S, owner of a cashew factory and a member of cashew industry association told TOI while observing the protest meet.
“We have only sought the CM to give us the breathing space by asking banks not to drive us out of our homes over delay in payment of loans terming it as non-performing assets (NPA). We only request to restructure the loans so that it can be repaid in seven years and to reduce the interest rates. Though the state had been promising since the last two years, it is yet to convene a State Level Bankers Committee (SLBC) meet to address the cashew industry crisis by restructuring loans to revive and rejuvenate the sector,” he reiterates.
The reason for the crisis is the challenge to procure raw cashew in the state which is processed by cashew factories and sold after value-addition. Only about 25 percent of raw cashew nuts are available in the state and the rest are imported from African countries.
“State government had constituted a Cashew Board led by former Taxes secretary P Marapandian as its chairman and managing director (CMD) and it has chalked out a plan to procure raw cashew from African countries with the support of External Affairs Ministry. Yet, the challenge for domestic cashew industry is from Vietnam and China which exports mechanically processed cashew at lesser rates. As Kerala’s processed cashew from Kollam is in demand in the international market, Vietnam based firms are branding it as Kollam cashew and exporting it. We had written to Union Industries Minister Suresh Prabhu on the heavy manipulation by Vietnamese firms in cashew industry,” officials at Minister Mercykuttyamma’s office told TOI.
Kerala has a major share of over Rs 3500 crore export value from the Rs 6000 crore cashew exports in the country. In addition to the recently re-opened 250 private cashew factories, there are about 40 cashew factories in the government sector including 30 under Kerala State Cashew Development Corporation (KSCDC) and 10 factories under Kerala State Cashew Workers Apex Industrial Cooperative (CAPEX), Industry department officials said. Still over 400 cashew factories in the state are crisis-ridden and efforts are on to revive them. CM has constituted an empowered committee with industry representatives to offer an amicable solution, the officials said. About 90 percent of the workers engaged in the cashew sector are women from the backward classes.
Meanwhile, the Union Industry Minister Suresh Prabhu has agreed in principle to the state cashew industry owners plea to relieve cashew sector from Goods and Services Tax (GST) and to waive the recently imposed 5 percent Import duty on cashew from the upcoming Union Budget set for release on Feb 1, industry officials said.