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Kerala’s cashew industry seeks central, state support to stay afloat

The cashew processing industry in Kerala, which accounted for almost 85 per cent of the country’s production ten years ago, is looking for central and State government support and a total revamp of its traditional factories to save itself from a complete shutdown. Almost 90 per cent of the over 865 factories in the State are closed down and around 250,000 of the total 300,000 workers are jobless now, as most of the factories have become Non Performing Assets (NPA).

The Cashew Export Promotion Council of India (CEPCI) has come out with a revival package for short-, medium- and long-term implementation to save the crisis-ridden industry. A decision by the State government in 2014 to increase wages by an unprecedented 35 per cent has increased the cost of production to Rs 3,200-3,400 per bag of 80 kg. This is almost five times as much as in Vietnam, where the cost is the equivalent of Rs 700 per bag or around $500, said CEPCI Chairman R K Bhoodes.

Other states in India also have much lower production costs, ranging between Rs 1,000 and Rs 1,800 per bag. The steep hike in wages a few years ago was beyond the absorption capacity of any industry member. In other states the wage hike was in tandem with their capacity.