Kochi: The genesis of the present crisis in the cashew industry in Kollam can be traced to flourishing of small and medium enterprises that came up in the area during the early part of the present last decade. The key issue facing the SME sector, mainly promoted by people having domain expertise in processing alone with limited capital, is the lack of access to raw material market and the market for finished products.
The Cashew Export Promotion Council has found the 35 per cent hike in minimum wages that came into effect in March 2015 has adversely affected the industry. The import duty of raw cashew at 5 per cent and import of sub-standard processed cashew from Vietnam has also affected the domestic market in the country. The State has also not yet received the GST refund after the advent of new taxation system. The inadequate supply of loans has also contributed to the lesser production quantity.
According to a person who has undertaken an extensive study of the sector cashew industry, Kollam is an ideal place for implementing the cluster approach by which procurement of the raw material could be done collectively and the processed kernels could be sold as a common brand. “A detailed proposal in this regard has been prepared and submitted to banks and other authorities concerned. We are waiting for the response,” he said, seeking anonymity. The banks have, however, showed no interest in the cluster model.
