October 5, 2016
The sleepy village of Vetapalem in coastal Prakasam district had been once home to flourishing cashew nut industry.Now, the century-old industry is in the doldrums due to acute shortage of raw material and changes in the EXIM policy.Undeterred by farmers uprooting cashew plantations to cash in on a boom in the real estate market, enterprising processing units in Vetapalem went for importing raw cashew nuts from African countries to stay afloat in business through value addition taking advantage of the skilled work force.
Even some big firms from Kerala started their units here attracted by industrial peace prevailing in the region, says Vetapalem Cashew nuts Manufacturers Welfare Association Secretary P. Sivaprasad.
But the Centre’s decision to charge 9.36 per cent on imports this fiscal in the form of basic customs duty, education cess and special additional duty (SAD) came as a shock for the already crisis-ridden industry.Fifty per cent of the units, mostly big players, have called it quits. Only smaller units are continuing their hand-to-mouth existence, association president M.Vidaysagar told The Hindu.
The remaining units will also have to down the shutters sooner than later if the present hostile environment continues, says V. Muralikrishna who runs Sri Venkateswara Cashew nut Manufacturing unit with an investment of Rs. 1 crore.
Another major worry for the processing units is the new Goods and Services tax(GST) regime.
“We do not know what will be the additional burden on us,” says Mr. Vidyasagar. “'None from here participated in the tender floated by the Tirumala Tirupati Devasthanams recently for procurement of three tonnes of cashew nuts in view of the present uncertainty,” he adds.According to industry sources, India produced about seven lakh tonnes of cashew nuts annually while the processing units, which had a capacity of 23 lakh tonnes, imported 10 lakh tonnes of raw cashew nuts from African countries to run their units to ideal capacity.
Putting the domestic consumption at 3.4 lakh tonnes last year, the sources predicted a drastic fall in consumption with the nuts becoming costlier than even almonds.They want the government to have a re-look at the present EXIM policy and also provide subsidy to farmers and help them improve productivity by planting high-yielding varieties.