Palasa Cashew Processing Cluster and its Impact on Employment & Environment and

lessons

Malla.Srinivasa RaoPRESIDENT

THE PALASA CASHEW MANUFACTUERERS ASSOCIATION

Palasa Cashew Processing Cluster

FOUNDER: Late Sri Malla Janardhan Rao

Inception: 1940

Board: 9 members at inception, later it was

increased

Manufacturing Process

At inception - Pan Roasting Method (till

1960’s)

At median - Drum Roasting Method(till

2007)

At present - Steam Boiling method(till

date)

Cashew Industry in Andhra Pradesh

Andhra Pradesh is one of the major cashew growing states offering

congenial conditions for the cultivation of cashew. Andhra Pradesh

occupied sixth rank in terms of number of units and third rank in the

processing of cashew nuts in India.

Andhra Pradesh has about 46,913 hectares of area under cashew with

an annual production of 12,500 tons of raw nuts.

Srikakulam, Visakhapatnam, East Godavari, West Godavari, Krishna,

Guntur, Prakasam and Nellore are important cashew-growing districts

in the State.

Cashew Industry in Srikakulam

Industry Concentration

There are 650 and around cashew processing units in Andhra

Pradesh, 500 are located in Srikakulam district, and the

remaining is located in different districts of the state.

Palasa and surrounding areas includes 450 processing

units(each of 1ton to 4 tons a day) in Srikakulam district is

the major cashew processing centre in Andhra Pradesh.

PALASA CASHEW CLUSTER Includes

THE PALASA CASHEW MANUFACTURERS

ASSOCIATION

THE INDUSTRIAL ESTATE – PALASA

HARIPURAM CASHEW MANUFACTURES ASSOCIATION And Others…

Revenue to Government

TAX NUMBER OF DEALERS

TAX PAID NUMBER OF DEALERS

TAX PAID

VAT (5%) 263 23598674/- 256 14653933/-

CST(2%) 210 6003926/- 227 11300245/-

TOT(1%) 335 6033159/- 300 2590306/-

APRIL-2013 TO MARCH-2014

APRIL-2014 TO DECEMBER-2014

Impact On Employment

The level of automation was very less, the industry was totally based

on manpower, therefore the scope for employment was very high.

The tribal's and Agriculture labor of Srikakulam district , mostly

involved in manufacturing process.

The labor were paid daily wages at the piece rate system, which is

more than as per Minimum Wages Act.

Survey Reports

Intervention of the Government bodies and Political Parties was

ZERO. The cluster was followed by the Pharmaceutical industry ,listed as

2ND largest payer of wages in the Andhra Pradesh.

About 20000 families were depending, directly or

indirectly to this cluster

Causes for Labor Scarcity

Increase in Production in nearby areas to the

cluster

Diversion towards Agriculture works in seasons

Food for Work- Central government policy

Effects on Cluster by Scarcity

Increasing gap between Supply and

Demand

Decrease in profit level

Decrease in production value

Best Practices of Palasa Cashew Cluster

Both the unions discuss the increment of wages

All the employers and employees undergoes Bilateral

settlements.

The conclusions made by settlement was followed and exercise

till the next meeting called for.

The welfare of the employees was observed by the employers

association.

Environments

Environments Finance

Government

Local bodies

Infrastructure

Technology

Natural climatic conditions

Role Of Financial Institutions

As Working Capital was directly proportional to production.

Apart from banks, local money lenders also play vital role.

Though there are many funding institutions, the funds provided

were not sufficient to increase the production level at this cluster

Non availability of FOREX authorized dealer

Role Of Government And Other Agencies

In newly formed state, the government was much focused on the

Agro Based industries among which cashew was one.

Proper monitoring mechanism of Implementing agencies and

products

Periodic review of Schemes and Programs

Role Of Technology

As the industry was semi automated, technology has to be

provided at the better prices.

Up to date the hand cutting machines and the peeling machines

were satisfactory.

The usage of packing system were zero at this cluster.

The automated cashew cutting machines were not satisfactory.

Role of Infrastructure

Absence of ESI hospital

Lack of facilities in exporting through Vizag port

Absence of Skilled Labor

Problems of Cluster

Illegal Competition by New and Small Entrepreneurs

The age of the crop was is more than 50 years

Absence of Central and State Cashew Boards support

to the Cluster

Maximum import was done trough Tuticorne , which is

very expensive

Conclusion

The study made it clear that the cashew nut growers had lesser market knowledge level; this implies that the extension agencies may guide the cashew nut growers for improving their knowledge level to improve productivity.

There is need to convince the cashew growers about good cultivation and Marketing practices through demonstration and training.

The study has identified need for proper training to cashew nut growers. Hence, it is essential to provide sufficient opportunities to the growers for in-depth training on cashew nut cultivation and marketing by government agencies.

Conclusion ( Contd.)

Small Scale industries role is pivotal in stabilizing the economy and to bring economic viability to masses of the country.

India like developing countries need much support from all the dimensions to bring sustainable development to such industries.

Palasa Cashew cluster is moving ahead slowly to reach its economic and social goals as almost all 15,000 families are directly dependable on it.

Though the several research studies revealed the challenges and number of representations given by the association, local leaders the cluster is still look for a helping hand.

As compared to other cashew processing states the local banks support is to still think a lot to cater the needs of the processing units

Thank You