CG_Cashew Subsector Study Report by HVR_2

Cashew Subsector Study in Chhattisgarh

1 Submitted to CGSIRD Conducted by HVR

CASHEW SUBSECTOR STUDY IN CHHATTISGARH

Conducted by

Health Vision and Research

GA 97, 1527 Rajdanga Main Road Kolkata- 700 107, India

Webpage: www.hvr.org.in Email: [email protected]

Ph: +91 33 32009035 Fax: +91 33 2443 1980

For

Chhattisgarh State Institute of Rural Development



TABLE OF CONTENTS

Glossary and terminologies used Contents

Executive Summary 4-9

• Background 10

Profile of the state

Scope of the work

Objective of work

• Methodology 11-14

Sampling

Respondents

Collection of data

Challenges

Informed consent & confidentiality

• Findings 15-36

Overview: The Cashew Industry Global & National Scenario

Analysis of the Cashew value chain

Input Supply & Production

Collection & Distribution

Processing

Market

Description of the value chain actors

Governance

Gender & Social Inclusion

Enabling Environment, Programme & Policy Framework

• Recommendations 37-39

Advocacy & orientation

Capacity Building Strengthening weak points of the value chain

References 40



Glossary and terminologies used

CPU- Cashew Processing Unit

BRGF- Backward Regions Grants Fund

CGSIRD- Chhattisgarh State Institute of Rural Development

DFO- District Forest Officer

DD- Deputy Director

FMC- Forest Management Committee

HACCP -Hazard Analysis & Critical Control Point

VFC- Village Forest Committee

JFM- Joint Forest Management

MoRD- Ministry of Rural Development

NHM- National Horticulture Mission

NPV- Net Present Value

SIRD- State Institute of Rural Development



Executive Summary

I. BACKGROUND

Chhattisgarh State lies between 170 96' to 240 5' North Latitude and 800 45' to 840.20' East

Longitude The state borders Madhya Pradesh on the northwest, Maharashtra on the west,

Andhra Pradesh on the south, Orissa on the east, Jharkhand on the northeast and Uttar

Pradesh on the north. The state Chhattisgarh has 18 districts. Average rainfall is 1234 mm

and heavy downpour takes place between July and August. The total population of the State

as per 2001 census is 208.30 lakh. Around 79.92% of the population resides in rural areas.

The percentage of rural population is above 90% in Bastar, Kanker, Dantewada and Raigarh

districts, the tribal dominated districts of the State. Chhattisgarh is a tribal dominated State

with tribal population accounting for 31.80%.The State has a literacy of 64.66% (2001

Census) which is marginally lower than the national average of 64.80%. The literacy

percentage for men was higher at 77.38% as against 51.85% for women. Chhattisgarh is

among the least populated States of the country with a population density at 154 (national

average of 331).

The tribal population of India constitutes around 8% of total population distributed over

94,000 tribal villages.

The Chhattisgarh State Institute of Rural Development (CGSIRD) is a premier Institute

under the Ministry of Panchayat & Rural Development, Govt. of Chhattisgarh.

The subsector studies are being commissioned by the CGSIRD to assist PRIs for reduction of

poverty through development of sustainable collective action around selected activities. The

final list of subsectors identified for the studies includes i) Dairy; ii) Goat rearing, iii)

Cashew; iv) Vegetable cultivation; v) Lac; vi) Mahua flower & seed; vii) Bamboo; and viii)

Pisciculture.

Health Vision and Research in collaboration with IIM, Calcutta has been selected for

conducting subsector studies in Chhattisgarh for four subsectors. In light of the above, the

current report has been prepared to describe the Cashew Subsector in Chhattisgarh.

Objectives of work

1. Map and analyze the process of production

2. Compare and contrast the existing process of production with bigger players

3. Identify Best Practices, Quality Control Protocols, and Certification Processes

4. Conduct inflow-outflow analysis and assess the potential for marketing.

5. Identify domestic and international trends, issues and opportunities

6. Propose a marketing strategy for a five year period.

7. Identify legal hurdles, if any that inhibit effective performance of the subsector.

8. Suggest models of Public, Private and community partnership that can be replicated

in various regions and identify role of community, Panchayat and private

entrepreneurs therein and also suggest necessary changes in policy & legal

framework, if any.

9. Identify the extent of market led, state led and civil society led coordination failures

in each subsector.

10. Suggest intervention strategy



II. METHODOLOGY

Approach

• Establish Initial Understanding

• Refine Your Understanding

• Identify Leveraged Interventions

Sampling

For the subsector we selected sample seven districts in the state on the basis of some

criteria: 1) presence of cashew processing unit 2) cashew production more or less 3)

topography being plain, platue or hilly & 4) presence of outlets. On the basis of these

factors, we selected seven districts for our study. They are Bastar, Kanker, Jashpur,

Raigarh, Bilaspur, Dhamtari & Raipur.

Collection of data

Data were collected during the period from 15th Jan to 5th April 2010. The data collection

team consisted of one Project Coordinator, one Project Associate, one Research Associate

and one Subsector Specialist. The Subsector Specialist and the Research Associate jointly

visited the field to collect data. In-depth interview, FGD and simple Group Discussions took

place to collect data. Apart from that verification of cashew processing units based on

certain checklist was conducted. Livelihood analysis was done using PRA technique. Apart

from the primary data collection, secondary data were collected using annual reports,

technical reports of the department and then verification of records available in the bamboo

processing units.


Respondents were informed about the purpose of the study. Because there were possibility

in difference in opinion and conflict of interest involved in providing data, the respondents

were ensured about confidentiality and privacy issues.

Limitation of the study

The sample was taken mostly from cashew dominated districts and where cashew

processing units are present. Districts like Narayanpur was not covered through field visit

but interview over telephone. The Subsector Specialist could not visit each area where the

research associate has gone. Therefore our study universe has some limitations to capture

the whole universe neither it was fully random based selection rather sometimes convenient

and purposive. However, samples were adequate to capture the variations and to

understand the magnitude of the problems.



III. FINDINGS

Literature review

India has expanded its cashew production over the years and has become the world's

largest producer. Currently, we account for about 40 per cent of global production. One

of the major problems that the Indian cashew industry faces the acute shortage of raw

cashewnuts produced within the country. All the units in India put together have a

processing capacity of over 10,00,000 MT of raw nuts per year, but the domestic production

is less than 5,00,000 MT per year. Therefore, India resorts to import of raw nuts. Our

import bill on raw cashewnuts has increased over the years. During 2002-03, India

imported 4,00,199 MT of raw cashewnuts from different countries resulting in a foreign

exchange outflow of Rs 1,23,000 lakhs.

Among 12 states where cashew production is predominant, in the year 2008-09, the

productivity is at 11th position, just after Pondichery. Compared to the last year in 2007-08,

when the yield was comparatively better around 1.26 per ha, the situation came down in

the current year.

In case of Chhattisgarh, the value chain is limited to Kernel production and to some extent

Wine production in very informal way. Apart from it, some Kernel related products like

salted and sugar coated or sweet products of kernel. The above value chain gives an idea of

possible options for Chhattisgarh. Cashew plantation means use of bad land. The state has

taken initiative towards using the bad land for cashew but many more things are yet to be

done.

Field Observations

• In Chhattisgarh there are around 50 nurseries managed by Horticulture Dept. From

here the rate of plants are cheaper than the private nurseries. The rate of grafted

plants is Rs 16-20 per plant and Rs 5 per seeded plant. Number of private small or

big nurseries in the state will be around 50 and the price of the grafted plant is Rs 30

per plant.

• Three types of cashew plants grow- v2, v3 & v4; out of which v3 is commonest or

the deshi variety counting around 90%. It appears that the possibilities are higher in

districts like Raigarh, Bastar and Kanker. Cashew plantation in Bastar & Raigarh is a

success of the Forest Dept.

• Here in the state, the grown plants are affected by blast disease in absence of pest &

trip control.

• Flowering starts from December to March; fruits start appearing from March –April

and harvesting takes place in April-May of the year. After harvesting, the farmers

usually dry it in the field itself. However, they do not segregate the cashewnuts

according to their size and quality. However, sometimes, the black quality cashew

i.e. the bad one is sold @ Rs 15 per kg. They directly sell to the middleman who

comes during harvesting each year from Orissa and sometimes local middleman also.

The rate of the raw cashewnut ranges from 35-40 per kg. Cashewnuts can be graded

in the field based on their size & quality giving different amounts of Kernels of

different categories.

• Recommended production is 2 MT per hector in CG and the current productivity is

around 0.4 which is five times less than the estimated.

• NABARD has estimated cost for cashew production per ha to be Rs 42350 where the

cost of labour is not calculated. The following table therefore has described four



situations. Situation1: Actual cost calculation if anyone wants to cultivate cashew

and no subsidy. Situation 2: Central Govt scheme provides 100% subsidy for

plantation and provides Rs 42350 per hector. Situation 3 & 4 are same i.e. scheme

of NABARD and state govt. where 25% out of 42350 is subsidy to the farmers.

• There are four processing units at present physically present in Chhattisgarh out of

which only one in Jaddalpur in Markel (Rajpreet Industries) that is functional. Other

three are not functioning. Therefore the whole cashew market in Chhattisgarh is

dependent upon Orissa (Umorkot, Jaipur) and Andhra Pradesh (Parashar, Waltare)

for its processing, manufacturing byproducts.

• The processing unit has not advanced technology to produce Cashew oil, Sludge for

fuel, Ink, Alcohol from the thalamus. The by-products are not processed in the state.

• Market scope for cashew in Chhattisgarh is another weak point of the value chain.

Raw cashewnut is sold from the farmers to the middleman directly without any

segregation. Only one processing unit in Bastar contributes to10% of the total

domestic market in Raipur. This unit markets cashew as Kernel in 10 kg packets to

Raipur market almost 60% of its products and rest to Delhi, Maharastra &

Andhrapradesh. Cashewnuts from the farmers go to Orissa in Omurkot or Jaipur;

Parashar & Waltare in AP for processing and manufacturing by-products of

cashewnuts. Information from the wholesaler or retailers in Raipur city market says

that cashew as eatable commodity comes from Orissa- Jaipur or Omurkot.

• Raw cashew market is only for one month when the middleman from Orissa comes

and directly purchases from the farmers @ Rs 35-40 per kg where they keep profit

margin of Rs 5-10 and sells to processing units in Orissa. There is neither role of any

co-operative nor Panchayat in between the Farmers and the middleman.

• Among the value chain actors, it is the middleman whose role should be controlled to

maximize profit to the farmers. The role of PRI should be enhanced and more

governance is required for equity and distributive justice in land lease, in market

control & training and awareness. At the district level joint POA is required

addressing the need of the subsector. Role of PRI in leasing land is very crucial. It

has been revealed out that farmers group can request for leasing land through PRI.

Here political influences play role and therefore leadership and good governance

from PRI is needed. It has been reported that plenty of waste land remains vacant

without anything. Here comes the role of Panchayat to accelerate to lease the land to

the interested farmers.

• NREGA has a fund around Rs 8 crore in Bastar District. But the PRI has yet to

consider the subsector enhancement as a scope for utilization of the fund when

underutilization is concern. PRI at Zila Parishad are not aware of the profitability of

the cashew market neither overall context on the market, and thus narrowing down

the scope.

• There is budgetary provision for training of the farmers and manpower is also there

in the NHM. This requires training of the farmers on plantation, disease control and

marketing.

• Currently the PPP is a common practice that the state has to adopt particularly for

the cashew subsector. When the number of processing units are very less and some

units are closing. In one hand, PPP may help for more plantation, on the other hand,

processing may be done in Chhattisgarh rather than in Orissa.

• Accreditation of the units is yet to be done and their quality standard protocols need

to be setup.



IV. RECOMMENDATIONS

1. Advocacy & orientation of stakeholders & there should be a Cashew

Technology & Marketing Support Group

2. Capacity Building should be done through TOT mode for percolating the

messages & concerns of the subsector down to the district & block level. A

training manual should be developed and that should be used for capacity

building at various levels.

3. Strengthening weak points of the value chain through interventions

• Plantation & pant care: Other than Deshi variety high yielding cashew should

be planted. Disease control of the plants through proper training of the farmers is

immediate need.

• Segregation of cashew in the field: Segregation of cashewnuts in Cat A, B, C

from the field should be done to maximize profit of the farmers. This single

intervention can enhance profit by 25%.

• Managing the raw cashewnut market: Farmers cooperative may be promoted

to negotiate like the Goa model. PRI may be involved on incentive basis to put

fairness in selling cashew.

• Byproducts of cashewnut: Little has been done to capture the whole value

chain of cashew with in the state. When resources are limited, he state therefore

may try in PPP mode.

• Cashew processing unit: The horticulture department could not successfully

manage processing units those were established earlier in Bastar & Kanker.

Problems were lying in supply of cashewnuts and operational management of the

unit. The Horticulture Dept has a plan to open few small units and the forest dept

has also plan for one central Processing Unit with field level 4-5 small processing

unit in Bastar as pilot. There should be coordinated plan between departments.

• PRI involvement: Regulation of price through them in negotiating with the

middleman as per the segregated qualities Cat A. B & C. Supplying cashewnut

directly to the local processing units in higher prices. Using Mandi for selling

cashewnut during the season is good approach. There is one District Panchayat

Officer in Charge of Cashew as a nodal person looks after 20000 ha area. This

person should be used as key person in planning, processing, and market

regulation of cashew. Involvement of PRI at various level can bring transparency

and certain percentage of incentives should go to them, otherwise their

motivation can no be ensured. Making therefore joint plan of action with the Zila

Sabhadhipati, CEO and the DM with the Horticulture Line Dept is recommended.

• Resource tapping: Tapping resources from the departments like NABARD for

plantation; NREGA for plantation, processing will manage resource constraints.

Or defining the contribution of line departments like if plantation comes from

NABARD, processing can be from NREGA. This will ensure consistent value chain.



I. BACKGROUND INFORMATION Chhattisgarh State lies between 170 96' to 240 5' North Latitude and 800 45' to 840.20' East Longitude The state borders Madhya Pradesh on the northwest, Maharashtra on

the west, Andhra Pradesh on the south, Orissa on the east, Jharkhand on the northeast

and Uttar Pradesh on the north. The state Chhattisgarh has 18 districts. Average rainfall is 1234 mm and heavy downpour takes place between July and August. The total

population of the State as per 2001 census is 208.30 lakh. Around 79.92% of the population resides in rural areas. The percentage of rural population is above 90% in

Bastar, Kanker, Dantewada and Raigarh districts, the tribal dominated districts of the State. Chhattisgarh is a tribal dominated State with tribal population accounting for

31.80%.The State has a literacy of 64.66% (2001 Census) which is marginally lower

than the national average of 64.80%. The literacy percentage for men was higher at 77.38% as against 51.85% for women. Chhattisgarh is among the least populated States of the country with a population density at 154 (national average of 331).

The tribal population of India constitutes around 8% of total population distributed over 94,000 tribal villages.

The Chhattisgarh State Institute of Rural Development (CGSIRD) is a premier Institute

under the Ministry of Panchayat & Rural Development, Govt. of Chhattisgarh. The subsector studies are being commissioned by the CGSIRD to assist PRIs for reduction of poverty through development of sustainable collective action around

selected activities. The final list of subsectors identified for the studies includes i) Dairy; ii) Goat rearing, iii) Cashew; iv) Vegetable cultivation; v) Lac; vi) Mahua flower & seed;

vii) Bamboo; and viii) Pisciculture.

Health Vision and Research in collaboration with IIM, Calcutta has been selected for conducting

subsector studies in Chhattisgarh for four subsectors. In light of the above, the current

report has been prepared to describe the Cashew Subsector in Chhattisgarh.

Objectives of work

1. Map and analyze the process of production

2. Compare and contrast the existing process of production with bigger players 3. Identify Best Practices, Quality Control Protocols, and Certification Processes

4. Conduct inflow-outflow analysis and assess the potential for marketing.

5. Identify domestic and international trends, issues and opportunities 6. Propose a marketing strategy for a five year period.

7. Identify legal hurdles, if any that inhibit effective performance of the subsector. 8. Suggest models of Public, Private and community partnership that can be

replicated in various regions and identify role of community, Panchayat and

private entrepreneurs therein and also suggest necessary changes in policy & legal framework, if any.

9. Identify the extent of market led, state led and civil society led coordination

failures in each subsector. 10. Suggest intervention strategy

II. METHODOLOGY



Approach • Establish Initial Understanding

• Refine Your Understanding • Identify Leveraged Interventions

Sampling

For the subsector we selected sample seven districts in the state on the basis of some criteria: 1) presence of cashew processing unit 2) cashew production more or less 3)

topography being plain, platue or hilly & 4) presence of outlets. On the basis of these factors, we selected seven districts for our study. They are Bastar, Kanker, Jashpur, Raigarh, Bilaspur, Dhamtari & Raipur.

Respondents There were total 70 respondents. At Raipur city, there were 11 respondents like 2

directors, 1 technical officer of NHM, 2 NABARD officers, 2 middlemen, 2 middle size & 2 small size wholesalers & retailers. Out of five districts we covered, there were 8 AD/DD/Consultant level respondents; 5 lower level government functionaries; 31 labour

& farmers; 2 owners of cashew processing unit; others are middlemen, PRI at gram level, forest dept functionaries etc. For details see Annexure 1.

Collection of data Data were collected during the period from 15th Jan to 5th April 2010. The data collection team consisted of one Project Coordinator, one Project Associate, one

Research Associate and one Subsector Specialist. The Subsector Specialist and the Research Associate jointly visited the field to collect data. In-depth interview, FGD and simple Group Discussions took place to collect data. Apart from that verification of

cashew processing units based on certain checklist was conducted. Livelihood analysis was done using PRA technique. Apart from the primary data collection, secondary data

were collected using annual reports, technical reports of the department and then verification of records available in the bamboo processing units.


Respondents were informed about the purpose of the study. Because there were possibility in difference in opinion and conflict of interest involved in providing data, the

respondents were ensured about confidentiality and privacy issues.

Limitation of the study

The sample was taken mostly from cashew dominated districts and where cashew

processing units are present. Districts like Narayanpur was not covered through field visit but interview over telephone. The Subsector Specialist could not visit each area

where the research associate has gone. Therefore our study universe has some limitations to capture the whole universe neither it was fully random based selection rather sometimes convenient and purposive. However, samples were adequate to

capture the variations and to understand the magnitude of the problems.

III. FINDINGS



III. a Overview of the cashew industry

Global market and India

The use of nuts as food goes back to pre-historic times. Many primitive societies of the world subsisted primarily on nuts together with roots and berries. After centuries of neglect, the nuts have come again into prominence as a result of advances in food

research. Today nuts form an important part of every day meal in several countries

of the world. Nuts in general are high in protein, fat and carbohydrates. They are also rich in many minerals and vitamins essential for the well-being of a human body

Cashewnut ranks among the most nutritious food items. Cashew kernel, graded according to the size and colour, is available in the form of wholes and pieces. Contrary to the popular belief, it contains no harmful cholesterol. It is rich in minerals and

vitamins, essential for the well being of a human body.

India has expanded its cashew production over the years and has become the world's

largest producer. Currently, we account for about 40 per cent of global production. One of the major problems that the Indian cashew industry faces the acute shortage of raw cashewnuts produced within the country. All the units in India put together have a

processing capacity of over 10,00,000 MT of raw nuts per year, but the domestic

production is less than 5,00,000 MT per year. Therefore, India resorts to import of raw nuts. Our import bill on raw cashewnuts has increased over the years. During 2002-03,

India imported 4,00,199 MT of raw cashewnuts from different countries resulting in a foreign exchange outflow of Rs 1,23,000 lakhs. In addition to import, there is lateral movement of raw cashewnuts among major

cashew pockets within the country. The price mechanism of the commodity is broadly

influenced by the import as well as lateral in country trade movements. In this context, the supply chain analysis of raw cashewnuts produced within the country assumes

relevance.

Forecast growth

Forecast growth for the import of cashews is strong, with a 2004 World Bank report

citing a “shortage of kernels” (Figure 1) (World Bank, Global Cashew Market 2004)



Figure 1: Forecast of the cashew market growth in world

The growth of the cashew industry worldwide is significant (Figure 2)

Figure 2: Growth of cashew market in the world



In around 2004-07 the cashew processing market in India as promising and therefore

the import of cashewnuts from Africa to India was promising for us. (Figure 3)

Figure 3: India & other countries on production & processing

The Hazard Analysis & Critical Control Point (HACCP) System- Principles in

general and their application to primary production

These principles prescribe a certain number of requirements to be met throughout the

cycle of production, processing and distribution in order to permit, via hazard analysis,

identification of the critical points which need to be kept under control in order to

guarantee food safety:–identify any hazards that must be prevented, eliminated or

reduced to acceptable levels; –identify the critical control points at the step or steps at

which control is essential; –establish critical limits beyond which intervention is

necessary; –establish and implement effective monitoring procedures at critical control

points; –establish corrective actions when monitoring indicates that a critical control

point is not under control; –implement own-check procedures to verify whether the

measures adopted are working effectively; –keep records to demonstrate the effective

application of these measures and to facilitate official controls by the competent

authority.



International standards for cashew processing

An international standard for cashew processing is either related to product standards

or process standards need review in case of Chhattisgarh. Here the comparison has been briefly described in the following table 1.

Table 1: Products and process standards

Product characteristics

Existing practices in Chhattisgarh

• Classification of kernel products by

various qualities (eg. Size, colour,

moisture, oil content, broken/whole

etc)–There are two classification

systems: Indian/(African) and Brazilian–

UN has endorsed a standard for

comparing systems (1999)–Kernel prices

are determined by reference to these

systems

• Final/consumer product labelling and

packaging standards, different in each

market–USA: (FDA Food Labeling Guide

(1994)–EU: Directive 2000/13/EC)

• One kg of processed Kernel after grading will yield the

followings.

250 gm Category A

350 gm category B

350 gm category C

50 gm broken cashew

• In the processing unit, 10 Kg tin

packets are made

Process

• General application standards–FAO

introduced HACCP (Hazard Assessment

and Critical Control Points) is the

international benchmark concerning

cashewnut industry–Adopted by FDA

• Environmental standards ISO14000

concerning pesticides, shells

• Specialist standards and certifications for

access to niche/premium markets–Fair

trade, eg. Fair trade Labelling

Organisations International–Organic

standards and certification

• Processes are

Shelled dry cashewnut

gathered

Boiling of cashewnut

De-shelling cashew

Heating & drying

Un-coating

Segregation or grading

Packaging

Marketing

• Environmental protection issues

not taken care of

• No standardization & accreditation

procedure exist



Extended value chain in Indian Industry

The following cashew value chain is much expanded with possible maximum options as

direct products or by-products of cashew and value chain actors involved in it. Refer to

the following figure 4.

Figure 4: Cashew value chain map in Indian Industry



Cashew Industry in Goa- A CASE FOR INDIA

Marketing network for raw cashewnuts

There is an organised marketing network for raw cashewnuts in Goa. Availability and trading season of the commodity in the state is from March to May. Due to the highly

competitive nature of the cashew trade, growers have few marketing problems. Grades and standards for cashew are yet to be introduced in Chhattisgarh as is the case with

the rest of India. Quality is generally determined by appearance and cutting tests that

traders employ prior to purchase. The raw cashewnut market involves large capital deployment as around 80 per cent of the produce is transacted within a matter of 35 days.

Raw cashew and price trend

Due to its premium quality, Goa cashewnuts fetch a premium price - the highest as compared to those produced in Kerala, Karnataka, Andhra Pradesh and Tamil Nadu. This trend remained unchanged during the entire period from 1990 to 2003 and till

date. The higher prices realized in 1999 and 2000 are in line with all India price pattern and is attributed to short supply situation.

In Goa the volume of raw cashewnuts & prices are handled by the society and it ranges

between 1600 T to 2000 T. The procurement prices are notified on a daily basis. During the 2004 harvest season, the procurement price offered by the society varied from Rs. 35 to Rs. 36 per Kg and now it is around Rs 45/kg. The sales price is fixed at

Rs. 1.50 per Kg above the procurement price. Processors have to lift the produce from the society/collection centre and have to bear the transportation cost from

society/collection centre to the processing centre.

Another co-operative set up viz., Adarsh Krishi Sahakari Kharedi Vikri Prakriya Samstha Maryadit directly procures cashewnuts from producers. This cooperative Society at Balli, South Goa also runs a processing unit on lease. Through this mode, the

Supply chain is further shortened. The trade turns over of the society from raw cashewnut and kernel during the last four years varied from Rs 233.14 lakhs in 2000-

01 to Rs 300.46 lakhs in 2003-04.

Co-operative as intermediary between producer and processor- Marketing channel 1

Though a portion of the produce in Goa is brought by itinerant merchants and the

agents of the processing units, co-operative marketing societies have a major stake in raw nut trade. Examples of working models of cashewnut marketing operating in the

state with co-operative set up as intermediary are presented in the following section. One of the models based on growers' co-operative, functioning in the state is the Goa Bagayatdar Cooperative Society Ltd. This Primary Co-operative Society, in which the

producers are the stakeholders, plays a key role in cashew procurement and trade in

Goa. The society's prime motto is to protect farmers' interest. With 8500 horticulture farmers as members, the society covers around 50% of the agrarian population in the

state. It has 24 collection centers located in the production centres. The society



procures cashew from 5000 growers. In 2002-03, the society traded 1193 T raw cashew and realized Rs. 416.54 lakhs. Presently the volume of raw cashewnuts

handled by the society ranges between 1600 T to 2000 T. The procurement prices are notified on a daily basis.

Direct marketing by producer to processor- marketing channel 2

The most resourceful processors contact the producers directly and in the process avoid

the commission agents. In certain instances under this mode of trade, processors establish good bargaining power by providing credit facilities to the producers and entering into pre-harvest contract arrangements.

Traders as intermediary between producer and processor- marketing channel 3

A number of wholesale merchants and the processing factories open their collecting centres in important cashew producing areas during the harvesting period. The cashew trade is seldom handled by exclusive traders. Usually, those traders who collect other

plantation products also trade in cashew. The petty traders who buy the nuts from the

growers also sell the nuts to these collecting centres. Growers also sell the nuts to small traders in primary or village markets who in turn sell to the urban markets. Cashewnuts

are brought for sale to the assembling markets largely by the itinerant merchants.

Supply chain analysis

The supply chain analysis of raw cashewnut in Goa reveals that the trade route

involving the cooperatives intermediary between the farmer and processor is the most popular one. While processors look at it as an assured and reliable source of supply.

Channel 3- Farmer-Trader-Processor Channel 2- Farmer-Processor

Channel 1- Farmer- Cooperative-Processor

The farmers favour these channels for the transparent and competitive pricing mechanism. The direct marketing of the produce by farmers to the processors offers

the shortest supply chain. However, there is a school of thought that the pre harvest contract and advance credit, which are integral part of the channel, may make it less

advantageous to farmers from price realisation point of view. The marketing mode

involving the traders as intermediary between producer and processor has the longest chain and the number of players involved are 4 or more. This channel makes the raw material costly for processors while the farmers are subjected to exploitation by the

intermediary tiers.

The inference from Goa

The emergence of a supply chain model for raw cashewnut trade in Goa is quite evident from the foregoing discussion. From the angles of supply chain management and value chain analysis, this model anchored by the growers' co-operative appears to be

beneficial both to producers and processors.



Area under cashew plantation and production in India and Chhattisgarh (Area 000 Hector and Production 000 MT)

Among 12 states where cashew production is predominant, in the year 2008-09, the productivity is at 11th position, just after Pondichery. Compared to the last year in 2007-08, when the yield was comparatively better around 1.26 per ha, the situation

came down in the current year.

Table 2: Area of plantation & production in India vs Chhattisgarh

STATE Cashewnut

08-09 Cashewnut 07-08

Productivity 2008-09

Productivity 2007-08

A P A P Productivity

2008-09 Productivity 2007-08

ANDHRA PRADESH

182 112 171 107 0.62 0.63

ASSAM 18 13 15 12 0.72 0.80 CHHATTISGARH 18.047 7.439 8.373 10.53 0.41 1.26 GOA 55 30 55 31 0.55 0.56 GUJARAT 6 4 4 4 0.67 1.00 KARNATAKA 107 60 103 56 0.56 0.54 KERALA 70 75 84 78 1.07 0.93 MAHARASHTRA 170 225 167 210 1.32 1.26 ORISSA 137 95 131 90 0.69 0.69 PONDICHERRY 6 2 5 2 0.33 0.40 TAMILNADU 131 68 123 65 0.52 0.53 WEST BENGAL 11 11 10 10 1.00 1.00 TOTAL 893 695 868 665 0.78 0.77

III. b Value chain analysis in Chhattisgarh

In case of Chhattisgarh, the value chain is limited to Kernel production and to some

extent Wine production in very informal way. Apart from it, some Kernel related

products like salted and sugar coated or sweet products of kernel. The above value

chain gives an idea of possible options for Chhattisgarh. Refer to the figure 5.



Figure 5: Cashew value chain map in Chhattisgarh



Cashew nursery

In Chhattisgarh there are around 50 nurseries managed by Horticulture Dept. From

here the rate of plants are cheaper than the private nurseries. The rate of grafted

plants is Rs 16-20 per plant and Rs 5 per seeded plant. Number of private small or big

nurseries in the state will be around 50 and the price of the grafted plant is Rs 30 per

plant.

Cashew plantation

Figure 6, 7: Cashew fruit and tree in the field

In Chhattisgarh, three types of cashew plants grow- v2, v3 & v4; out of which v3 is

commonest or the deshi variety counting around 90%. Cashew plants are usually bought from government because they are cheaper. Some

farmers make nurseries of their own and use them for their own plantation. Price of

each plant is Rs 16-20. For mono crops i.e. 6 m x 6 m; 200 grafted plants are placed.

Bi-crops variety i.e. 10 m x 10 m plants is placed. Usually bi-crop variety is minor

proportion. To plant, digging 2 ft x 2 ft is created for each grafted plant. In each pit,

ingredients required for the soil mixture are 250 gm sand, cow dung 30 kg, DAP 10 kg,

forate 25 gm.

The area under cultivation for cashew is given below & it appears that the possibilities

are higher in districts like Raigarh, Bastar and Kanker. However, the government is

trying to promote the plantation in other districts as well.



Table 3: Area of cashew plantation in Chhattisgarh

Area under cultivation in ha

Place 2005-06

2006-07

2007-08

2008-09

Raipur 0.85 80 81.7 0

Mahasamund 0 0 0 165

Dhamtari 41 0 0 0

Rajnandgao 0 0 0 2

Bastar 498.77 606 1368 7200

Kanker 222.75 1160 1160 1745

Dantewara 17.55 90 93 530

Korba 0 0 0 80

Raigarh 3312.33 5120 5320 7500

Jashpur 175.66 450 350 490

Narayanpur 310

Bijapur 25

Total 4268.91 7506 8372.7 18047

(Source: State Horticulture Board)

In the following table 4 it is provided the total umber of plants those have been

proposed during 2009-10 for plantation in various districts.

Table 4: Plantation in various districts

Physical target Total

Raip

ur

Durg

Rajn

andg

ao

Kabirdha

m

Bilaspur

Korb

a

Raig

arh

Jashpur

Sarg

uja

Koria

Jagdalp

ur

1st installment 500 500 2000 2000

5000

2nd installment 500 2000 200

2700

3rd installment 100 900

1000

Total 0 500 0 0 0 1100 4900 200 0 0 2000 8700


Cashew plantation under the Dept of Forest

The Dept of Forest is doing cashew plantation in districts like Bastar & Raigarh. They

have a plan to open central & peripheral processing units over there.



Plant care for first five years

The plants should be cared by fencing & keeping it away from grazing animals.

Each year Forate spray at the bottom should be done four times to keep termite

free and to keep it free from blast (Thrip) disease, spray of insecticide

chlorpyriphos is sprayed @ 10 ml per plant. First three years is very vital for

cashew survival and sometimes further two years i.e. total five years treatment is

required.

Figure 8: Blast disease of cashew plant

Life span of cashew plant

Cashew survives for around 30 years with 50% mortality when care is poor. But if

the care is adequate, it can be reduced to 25%. During their life span, the first

production starts at around 5 years of age.

Harvesting, collection & segregation

Flowering starts from December to March; fruits start appearing from March –April

and harvesting takes place in April-May of the year.



After harvesting, the farmers usually dry it in the field itself. However, they do not

segregate the cashewnuts according to their size and quality. However,

sometimes, the black quality cashew i.e. the bad one is sold @ Rs 15 per kg. They

directly sell to the middleman who comes during harvesting each year from Orissa

and sometimes local middleman also. The rate of the raw cashewnut ranges from

35-40 per kg.

Cashewnuts can be graded in the field based on their size & quality giving different

amounts of Kernels of different categories. They are as followings.

One Kg Group A raw cashewnut will yield 250 gm Category A Kernels and Group B

& C will yield 350 gm Category B & C Kernels. And from the field Category A, B & C

cashewnuts can be sold @ Rs 55/kg and Rs 30 for B & C category. The farmers

however do not segregate in the field. Proportion of Cat A, B & C raw cashewnuts

from the field is 25%, 35%, 35% respectively and 5% is wastage.

Cashewnut production

The productivity and quality of cashew increase when the plants grow further. At

the age of five years, total production per plant is around 5 kg per year and when

around 15 years or more, the productivity reaches to 25 kg per plant.

Table 5: Cashew production in districts of Chhattisgarh

Production under cultivation in MT

Place 2005-06 2006-07 2007-08

2008-09

Raipur 6 0 24.5 0

Mahasamund 0 0 0 69.3

Dhamtari 288.75 0 0 0

Rajnandgao 0 0 0 0.84

Bastar 3400.22 303 357 3024

Kanker 1526.89 7424 9280 732.9

Dantewara 0 45 46.5 81.9

Korba 0 0 0 33.6

Raigarh 24300.71 340 345 3150

Jashpur 1187.73 4500 0.58 205.8

Narayanpur 130.2

Bijapur 10.5

Total 30710.3 12612 10053.58 7439.04




Total yield for the state and for each district is given in the following table 6. It appears that the yield is high in the districts of Bastar, Kanker & Raigarh.

Table 6: Yield of cashew per hector in MT

Yield per hector

Place 2005-06 2006-07 2007-08 2008-09

Raipur 7.06 0.31 0.299878

Mahasamund 0.42

Dhamtari 7.04

Rajnandgao 0.42

Bastar 6.82 0.59 0.26 0.42

Kanker 6.85 8 8 0.42

Dantewara 0 0.52 0.5 0.15

Raigarh 7.34 0.07 0.06485 0.42

Jashpur 6.76 0.01 0.01 0.42

Narayanpur 0.42

Bijapur 0.42

Total 7.193944 1.339406 1.200757 0.412204


Recommended production is 2 MT per hector in CG and the current productivity os

around 0.4 which is five times less than the estimated.

Potential of the state in cashew production

New area added under cultivation each year is 4293 ha and on 2009 yield per ha is 0.41 MT that means potential growth in production per year is 1883 MT. Within

next 10 years, added area under cultivation at the present rate will be 42930 & total area under production will be around 50190 ha. If the production is around

national average of 0.77, total yield will be 38646.3 MT compared to the current production of 7439.04 MT which is 19.2% of the present production. If one standard processing unit can process around 6000 MT, then to meet up the

need of the total production processing, 7 units will be required. The CG state should prepare for that.

Costing of Cashew production

NABARD has estimated cost for cashew production per ha to be Rs 42350 where the cost of labour is not calculated. The following table therefore has described four situations. Situation1: Actual cost calculation if anyone wants to cultivate cashew and

no subsidy. Situation 2: Central Govt scheme provides 100% subsidy for plantation and



provides Rs 42350 per hector. Situation 3 & 4 are same i.e. scheme of NABARD and state govt. where 25% out of 42350 is subsidy to the farmers. For further details

please refer to the following table. Table 7: Costing per hector cashew plantation

Sl Cost items Actual cost under no

scheme

Central Govt

scheme

State Govt &

NABARD

Remarks

A PLANTATION

1 Plant from nursery 4000 Rs 16/plant from govt nursery,

200 mono crops variety (6 meterx6 meter)

2 Pit digging 600 2ftx2ftx2ft Rs 5 per plant x 200

3 Fertilizers & others 129 30 kg Cowdung, 10 kg DAP

Superphosphate, Sand,

4 Pesticides 2500 Forate 25 gm/pit

5 Fencing 2100 Rs 2100 estimated

Subtotal 9329

B 5 YEAR maintenance

1

Spray of insecticides -

forate

1440 4 times@ 10 ml/plant @ Rs 5/10

ml, 40% plant wasted

2

Care taker/labour charges

54000 Rs 1500 per month for one caretaker/average labour input

3

Subtotal 55440

TOTAL COST OF

PRODUCTION

64769 42350 42350 NABARD approved cost of Rs

42350 agreed by govt

C Value of produce

(Cashewnut)

122500 122500 Out of 200 plants 30% mortality,

rate Rs 35/cashewnut, 25 kg cashewnut/plant on sixth year

D Subsidy 0 42350 10587.5 NABARD scheme & State Govt

scheme- Subsidy 25% to

farmers= 10587/ha. Out of this, 1st year 50%, 2nd year 30% &

3rd year 20%, and 100% in NHM Central GoI scheme

E Cost to bear by farmers

64769 22419 54181.5

F Production per plant 1020.83 1020.83 1020.83 54181.5

Cost per plant 462.64 160.14 387.01 Actual cost= Rs 64769, For

Central Govt Scheme Rs 64769-

Rs 42350= Rs 22419, For

NABARD scheme Rs 64769-rs

10587.50= rs 54181.50 and same for the state govt scheme

Benefit per plant 558.20 860.70 633.82

(Source: DD Horticulture, Bastar)



Cashew in the Processing Unit

Processing units in Chhattisgarh

There are four processing units at present physically present in Chhattisgarh out of

which only one in Jaddalpur in Markel (Rajpreet Industries) that is functional. Other

three are not functioning. Therefore the whole cashew market in Chhattisgarh is

dependent upon Orissa (Umorkot, Jaipur) & Andhra Pradesh (Waltare, Parashar) for

its processing, manufacturing byproducts.

Steps of cashew processing in Bastar (Rajpreet Industries)

Visit to one Cashew Processing Unit, the only active unit in the state has the

following steps to maintain. As soon as the raw & dry cashewnut reaches the

processing unit, it passes through the following steps for production of kernel and

related products.

Table 7: Steps of cashew processing in Bastar

Steps Details

Shelled dry cashewnut Shelled dry cashewnut is stored in side the store in the factory

Boiled cashewnut The cashewnut is steamed in boiler

De-shelled cashew By hand operated machine and one

cashewnut at a time

Heating & drying In heating machine to absorb moisture

content within it

Un-coating This is done manually, no machinery use,

taking one individual cashew at a time. Some cashew may break during this procedures and called Broken cashew

Segregation /Grading This is also done only manually, generally by female labours. Each cashew is individually graded

according to size.

Packaging Cashew is packed in 10 kg packet made

of tin

Marketing Cashew is marketed mostly in Raipur to the wholesalers. Apart from it, they sell it

in the markets in Delhi, Maharastra & Andhrapradesh



Products in the unit from cashew

Dry shell of the cashewnut is sold to the middleman @ Rs 5 per kg. The processing unit has not advanced technology to produce further by-products from the shell like oil, ink, paint or sludge for fuel etc.

Figure 9: Segregation of various Category of Cashew (Kernel)

Costing To set up a middle level processing unit, around 35-40 lalkh fund is required. In the

annual action plan of 2009-10, the Horticulture department has a plan to set up 20 small size low cost processing units in three districts- 2 in Korba, 10 in Raigarh and 8 in Jashpur apart from revitalizing existing 4 units.

Trained persons availability

The factory depends on 30-40 workers who got no formal trainings. Remaining in the factory, they got to knowhow about the work.



Quality control

Except segregation of the graded kernels, no standard quality control protocol was maintained in the unit. Refer to quality standards of HACCP or ISO 9001, protocols are yet to be in place.

Byproducts of cashewnut

The processing unit has not advanced technology to produce Cashew oil, Sludge for fuel, Ink, Alcohol from the thalamus.

Figure 10: Cashew dry shell waiting for sell to the middleman

One kg cashewnut yields the following

250 gm dry cashew – Kernel 600 gm hard outer shell

150 gm thin inner shell



250 gm Kernel is graded according to their size into various categories. Category A – is biggest of first class cashew, Category B is the second class and Category C is small &

third class cashew. During the processing, some cashew Kernels break and these are called Broken Cashew.

One kg of processed Kernel after grading will yield the followings.

250 gm Category A

350 gm category B 350 gm category C 50 gm broken cashew

Market

Market scope for cashew in Chhattisgarh is another weak point of the value chain. Rawcahsew nut is sold from the farmers to the middleman directly without any

segregation. Only one processing unit in Bastar contributes to 10% of the total

domestic market in Raipur. This unit markets cashew as Kernel in 10 kg packets to Raipur market almost 60% of its products and rest to Delhi, Maharastra & Andhrapradesh. Cashewnuts from the farmers go to Orissa in Omurkot or Jaipur for

processing and manufacturing by-products of cashewnuts. Information from the wholesaler or retailers in Raipur city market says that cashew as eatable commodity

comes from Orissa- Jaipur or Omurkot.

Raw cashew market is only for around one month when the middleman from Orissa comes and directly purchases from the farmers @ Rs 35-40 per kg where they keep profit margin of Rs 5-10 and sells to processing units in Orissa. Apart from Orissa, in

Andhrpradesh raw cashwnut goes to Waltare, Parahar for processing. There is neither role of any co-operative nor Panchayat in between the Farmers and the middleman.

III. c Value chain actors

Important value chain actors are farmers, middleman, government functionaries,

Panchayat, NABARD representatives & owners of the private processing units.

Table 8: Description of the value chain actors

Actors Current situations and their roles

Farmers

• They are primary role players. Inadequate to nil knowledge & skill about proper plantation, its management, common

diseases and its prevention or cure of cashew plants • Absolutely nil information about middleman – i.e.

wherefrom they come or doing any negotiation on them for

price control. The price is fixed by the middleman and farmers just sell the cashewnut in that price



• No or some informal knowledge to process cashew apple

juice for wine making and no more idea about other processing

PRI

• No knowledge on the whereabouts of the middleman • No control over price regulation • Technical knowhow about the farmers problems and group

formation is very poor

Functionaries

of the dept of horticulture

• Irregular to nil support for plantation, disease control or

bargaining over middleman for good price of cahsewnut • Training of farmers on cashew is not reported by any farmer

• Provides 25% subsidy to the farmers for per ha cashew

plantation on estimated cost of Rs 42350 • Under NHM, 100% subsidy to Rs 42350 is given to farmers • Convergence with the forest dept who are also engaged in

cashew plantation is not visible

Functionaries of the dept of

forest

• Degraded or waste land is covered through plantation under the forest dept and members of the JFMC or farmers group

• No co-operative is formed yet neither marketing strategy for the cashew exists

Owners of the private processing

units

• Managing unit of their own • Lack of supply of raw cashewnut because the raw material

goes to Orissa

• Quality control protocol is absent except segregation

• Not upgraded to opt for byproducts of cashewnuts • Improper management of skilled & unskilled labour about

their wages and leaves

Workers of

the cashew processing unit

• Technical skill of the workers are poor

Owner of the

dying cashew processing

unit

• Lack of supply of cashewnut

• Poor control over middleman group who directly purchases from the farmers

• No access to outside the state market or outside the country market for casehwnut

Middleman • These wealthy middleman group are well versatile about the local seasonality and market

• Good rapport with the processing units in Orissa and the

local Panchayat and traders • Purchase raw csahewnut in low price and keeps profit

margin of min Rs 5-10 per kg of cashenut

Small traders • Directly brings cashew from Orissa –Jaipur or Omurkot

NABRD

• WADI project provides grant subsidy of 25% on the estimated cost of Rs 42350 per ha cashew plantation

• State Govt operates similarly in scheme and subsidy



III.d Governance & monitoring

Role of PRI in leasing land is very crucial. It has been revealed out that farmers group

can request for leasing land through PRI. Here political influences play role and therefore leadership and good governance from PRI is needed. It has been reported

that plenty of waste land remains vacant without anything. Here comes the role of

Panchayat to accelerate to lease the land to the interested farmers. NREGA has a fund around Rs 8 crore in Bster District. But the PRI has yet to consider

the subsector enhancement as a scope for utilization of the fund when underutilization is concern. PRI at ZIla Parishad are not aware of the profitability of the cashew market neither overall context on the market, and thus narrowing down the scope.

Role of the functionaries of the Dept of Horticulture

The Government of Chhattisgarh has Horticulture Dept officers in each district. Top person at the district is DD Horticulture, then ADH (Asst Dir Horticulture), then SHDO (Senior Horticulture Development Officer). Under the NHM (National Horticulture

Mission), each district primarily cashew dominated district like Bastar has 12 other staffs in the field. For example in each block, there is one supervisor/consultant to support the farmers. During interview, the farmers complained about no support from

the government officers even though there are market problems, there are disease of the plants out of which 4-5 plants per year are dying per ha.

There is budgetary provision for training of the farmers and manpower is also there. This requires training of the farmers on plantation, disease control and marketing.

III.e Gender & social inclusion

Female’s physical participation in nursery, processing unit & marketing are found to be adequate and almost equal, if not more. But productivity & skills of the female are

poorer compared to males. However, their share of the final sale is limited due to lack of information on prices and lack of negotiation skills and their movement being

restricted to the markets and not other places.



III.o Programme and policy framework

Linked issues of value chain are described in the table below.

Table 9: Programme & Policy Framework

Activity Gaps in Chhattisgarh in Horticulture initiative

Cashew plantation

& Maintenance

• Almost 90% depend on Deshi variety that

has poor yield

• Disease (Thrip & Blast) of plants is very common and therefore portability of plants

are around 50% • Poor skills & knowledge of the farmers • Land lease to willing farmers is long way to

complete

• PPP scheme is yet to come • Coverage under NABARD scheme is poor

• Effective Utilization of NHM staff to be in place

Segregation after

harvesting & sell to middleman

• Farmers sell cashewnut to the middleman at

cheaper rate Rs 35-40/kg for good quality & Rs 15/kg for black or bad quality cashew.

This is the only segregation they do. If proper segregation is done, bigger size cashewnuts will be sold in Rs 55/kg (Cat A)

and others @ Rs 45/kg (Cat B & C) and Black cashew @ Rs 15/kg. This will maximize the profit of the farmers

Cashew Processing • Cashew processing is done in Jagadalpur &

that is only one active & running private factory in Bastar & also in Chhattisgarh

• Other three factories are dying- one in Raigarh, 2 in Bastar

• Govt has plan to set up 20 lowcost factories

in the state but PPP scheme is yet to come

• Farmers produce some wine from the cashew apple juice which is absolutely for

their domestic use only, not marketable

Byproducts of the

cashewnut

• Neither the processing unit nor the private

farmers are engaging resources for managing by-products of the cashewnut like

its shell can be used for oil, paint, fuel

Marketing of the cashewnut

• There is no co-operative, neither any NGO nor any Mandi available in the district level

to control the price to be fair. It is the middleman group who negotiates with farmer who are poor informed. Therefore



better governance is required.

Market of the kernel (Cashew)

• It is entirely either domestic market in Raipur based on one processing unit in Jagdalpur and dominated by processors in

Orissa (Jaipur and Omurkot)

Governance &

monitoring of the line dept functionaries &

PRI

• Training of the farmers have to take place

• Gram Sabha has yet to be used for monitoring of the progress & problems

because the Panchayat can not lead the

issue

Harvesting in politically disturbed area

Possible cashew plantation & production is much is some politically disturbed are under

Naxalites like Bastar, Narayanpur & Dantewara. Therefore further harvesting and growth of the market is difficult here.

Public Private Partnership (PPP)

Currently the PPP is a common practice that the state has to adopt particularly for the

cashew subsector. When the number of processing units are very less and some units are closing. In one hand, PPP may help for more plantation, on the other hand,

processing may be done in Chhattisgarh rather than in Orissa. Accreditation of units

Accreditation of the units is yet to be done and their quality standard protocols need to be setup.

Involvement of the state & district in policy framework

The policy framework and programme designing are still the job of he state dept i.e. the Directorate of the Horticulture down to the district level. Neither under the NERGA

nor in the rural development schemes cashew subsector has been addressed in their Plan of Action. It is still a top to bottom approach to manage the plantation or the Processing Units. Role of PRI in propagating it is bare minimum and ownership of the

district line departments is poor.



IV. RECOMMENDATIONS

IV.a Advocacy & orientation of stakeholders with the following objectives

• Provincial authorities need to fully recognize the potential of the sub-sector for the development of the province and act upon this by creating an enabling environment

• Develop simple provincial cashew strategy aiming at supporting the industry

• Creating business friendly, supportive environment

To fulfill these objectives here should be policy dialogue at the state level with clients

like NHM Officers, Policy Makers / Foresters/ Industrialist/ NGOs to describe the study findings, and national stand on NHM, encouraging research, PPP, role of line departments & PRI down to each district. There should be preparation of a cluster or

district level POA down to the district & block for follow up. At the district level functionaries should be PRI Nodal Officer, Member of Zila Parishd, CEO, NGO etc. To do

this fruitfully, there should be a Cashew Technology & Marketing Support group at the state level.

IV.b Capacity Building Capacity Building should be done through TOT mode for percolating the messages &

concerns of the subsector down to the district & block level. A training manual should be developed and that should be used for capacity building at various levels.

Objectives will be:

• Organizational structure clarifying roles and responsibilities of departments in the

value chain & growing leadership skills for governance • Increase understanding of market workings and develop marketing skills and

doing business

• Transfer technology and knowledge • Develop village level Gram Sabha for better management

Table 10: Training interventions for value chain actors

1 TOT- Training of Master Trainers on Nursery, Plantation, Cashew Products – Processing Unit

Training

5 Days Based on the training manual to

be developed for TOT (4 types)

Broad contents:

Farmers group promotion, Micro

credit, Marketing, Technology

Based Skill Development

2 Training of framers & field functionaries of line departments at block level through MTs

5 Days Broad contents: Farmers group promotion, Micro



credit, Marketing, Technology

Based Skill Development

3 Exposure Visit for State Level Officers

10 Days to Goa, Maharastra, Orissa , AP

4 Exposure Visit for some District Level Officers

10 Days to Goa, Orissa, AP

5 Training of NGOs /Owners of the

Cashew Processing Units

5 days

Broad contents:

Marketing, Technology Based

Skill Development, Labour

management

7 Training of PRIs by MTs 2 days Broad contents: Farmers group promotion,

Equity & Fairness in distribution,

Scope of Gram Sabha for justice

& equity

IV.c Strengthening weak points of the value chain through interventions

1. Plantation & plant care: According to the Work Bank report 2004, India has expanded its cashew production

over the years and has become the world's largest producer. Currently, we account for about 40 per cent of global production. One of the major problems that the Indian cashew industry faces the acute shortage of raw cashewnuts produced within the

country. All the units in India put together have a processing capacity of over 10,00,000 MT of raw nuts per year, but the domestic production is less than 5,00,000

MT per year. Therefore, India resorts to import of raw nuts. Our import bill on raw

cashewnuts has increased over the years. During 2002-03, India imported 4,00,199 MT of raw cashewnuts from different countries resulting in a foreign exchange outflow of Rs

1,23,000 lakhs. In addition to import, there is lateral movement of raw cashewnuts among major cashew pockets within the country. The price mechanism of the commodity is broadly

influenced by the import as well as lateral in country trade movements. In this context,

the more production through more plantation has relevance. In CG, Deshi Cashew variety is almost 90%. Other than Deshi variety high yielding

cashew should be planted. These plants are high yielding and more pest resistant. It has been seen that there is mismatch between supply & demand of the cashew. The state production is now more than the processing. However, the total productivity is

coming down. With an aim to process more the state should opt for more plantation to

ensure sustained supply to more processing units which is there is the plan of the horticulture dept as well as the forest dept. The PRI Nodal Officer in Zila Parishad, live

dept functionaries of the Forest Dept & NREGA Cell may come together to identify waste land, do mapping. Each potential district wise plan may be developed well



describing the responsibilities of the departments. In the current situation, Forest & Horticulture Dept are doing work separately. If joint plan is developed more production

is possible. NABRAD has scheme for cashew plantation & care for a period of three years. The resource can be tapped through the involvement of CG State Gov. Plant care is very essential as we have seen that each year plants are dying due to

blast disease. The farmers do not have knowledge about the disease neither about its

control. Each plant death causes a loss of almost Rs 1500 to the farmers. In the section IV.b, description is available about training of farmers & line department functionaries

together with the PRI. Incentives of PRI members down to the GP level should be ensured through concerned departments or on royalty basis from production, otherwise their motivation will come down to continue support. Gram Sabha can be used to

disseminate access information about plant care through representatives of horticulture

dept. There is one District Panchayat Officer in Charge of Cashew as a nodal person looks

after 20000 ha area. This person should be used as key person in planning, processing, and market regulation of cashew. Involvement of PRI at various level can bring transparency and certain percentage of incentives should go to them, otherwise their

motivation can no be ensured. Making therefore joint plan of action with the Zila

Sabhadhipati, CEO and the DM with the Horticulture Line Dept is recommended.

2. Segregation of cashew in the field

During harvesting the framers pluck the cashewnut, dry it in the field and sell directly

to the middleman @ Rs 45 per Kg (average price on 2010 as stated by the farmers in

Kanker). Segregation of cashewnuts can be of three types - Cat A, B, C. Category A, B & C has price like Rs 65, 45 and Rs 25 per Kg. From the field, this segregation is possible, and then from the field should be done to maximize profit of the farmers. This

single intervention can enhance profit by 25%. How is this possible? As described above, if the PRI is assigned the responsibility, they can help framers in group to collect

their cashewnut in the local market and fix price category wise. Category A, B, C &

wastage counts 25%, 35%, 35% & 5% respectively. At present they sell 100 Kg in Rs 4500. Category wise total collection will be Rs 4725 i.e. Rs 225 more per 100 Kg simply by this intervention (if rates of Category A, B & C

are Rs 35, 45 and 65 per Kg.

3. Promotion of cashew processing units

The horticulture department could not successfully manage processing units those were established earlier in Bastar & Kanker. Problems were lying in supply of cashewnuts and

operational management of the unit. The Horticulture Dept has a plan to open few small units and the forest dept has also plan for one central Processing Unit with field level 4-

5 small processing unit in Bastar as pilot. There should be coordinated plan between

departments. If the state promotes plantation & plant care; production will be high; therefore processing units should be more. Field observations from Bastar revealed out poor quality adherence in cashew processing in a private unit. The Food Safety

measures according to the UN norm of Hazard Analysis & Critical Control Point (HACCP)



System should be maintained. The Dept of Horticulture should take this role. One standard processing unit will generate employment of almost 25 individuals. Therefore

a potential 38646 MT production of cashew in CG will require 7 processing units if each unit can process around 6000 MT and it can create a employment of 175 skilled labours over there. PPP model can be tried also, because of the resource constraints.

4. Managing the raw cashewnut market:

Due to its premium quality, Goa cashewnuts fetch a premium price - the highest as compared to those produced in Kerala, Karnataka, Andhra Pradesh and Tamil Nadu. In Goa the volume of raw cashewnuts & prices are handled by the society and it ranges

between 1600 T to 2000 T. The procurement prices are notified on a daily basis. The

raw cashew market is regulated by a cooperative society in Goa. This can be a mode for Chhattisgarh. Co-operative is an intermediary between producer and processor,

which is best model compared to other models.

During the 2004 harvest season, the procurement price offered by the society varied from Rs. 35 to Rs. 36 per Kg and now in 2009 it is around Rs 45/kg. The sales price is

fixed at Rs. 1.50 per Kg above the procurement price. Processors had to lift the produce

from the society/collection centre and have to bear the transportation cost from society/collection centre to the processing centre.

Another co-operative set up viz., Adarsh Krishi Sahakari Kharedi Vikri Prakriya Samstha Maryadit directly procures cashewnuts from producers. This cooperative Society at Balli,

South Goa also runs a processing unit on lease. Through this mode, the Supply chain is further shortened.

One of the models based on growers' co-operative, functioning in the state is the Goa

Bagayatdar Cooperative Society Ltd. This Primary Co-operative Society in which the producers are the stakeholders, plays a key role in cashew procurement and trade in Goa. The society's prime motto is to protect farmers' interest. With 8500 horticulture

farmers as members, the society covers around 50% of the agrarian population in the state. It has 24 collection centers located in the production centres. The society

procures cashew from 5000 growers. In 2002-03, the society traded 1193 MT raw

cashew and realized Rs. 416.54 lakhs. Presently the volume of raw cashewnuts handled by the society ranges between 1600 T to 2000 T. The procurement prices are notified on a daily basis.

Role of PRI here as a Facilitator is very crucial to avoid corruption and bring distributive justice, equity and fairness. We propose involvement of the PRI on incentive basis. So

we propose to form farmers cooperative, bring raw cashew in the market through PRI

involvement and price fixation with the middleman by PRI to maintain fairness 5. Resource tapping:

Tapping resources from the departments like NABARD for plantation; NREGA for

plantation & processing for payment of daily labours under 100 days work scheme, will

manage resource constraints. Defining the contribution of line departments is important; if plantation comes from NABARD, processing can be from NREGA like this. This will ensure consistent value chain.



REFERENCES

1. Review Committee, Subsector Study in Chhattisgarh, TOR of the Chhattisgarh State Institute of Rural Development, 2009

2. Sustainable development of Tribals in Chhattisgarh, through Tribal Development

Fund Marching ahead in tandem, a document of NABARD, CG 2009-10 3. David Williams West African Cashew Sector Study: Supply-chain Analysis and Needs

Assessment

4. Small Enterprise DevelopmentWorkshop 2007, Gerzensee Center, Switzerland, Choosing Between Strategies: Adapting Industry, Approaches to Specific Value Chain Analysis, Using Three Comparative Commodities, 11-12 January 2007, Tim

Piper

5. Dr. T.Vilasachandran, Supply chain analysis of cashewnuts in Goa, ISSUE 10, 2007 6. NABARD, PLD 2010-11, Chhattisgarh

7. Directorate of Horticulture, Govt of Chhattisgarh, Annual Action Plan 2009-10 8. DD of Horticulture, Bastar, Annual Action Plan 2009-10 9. DD of Horticulture, Bastar, MIS report 2004-05, 05-06, 07-08, 08-09

10. DD of Horticulture, Package of Practice, Raigarh and Bastar, 2009-10



Annexure 1:

Level Respondent Place – block,

village

No

State Dr R K Sing, Director, CGSIRD Nimora, Raipur 1

Raipur Mr Aloke Katihar, Director, Dept of Horticulture, CG

Raipur 1

Mr Niraj Agarwal, Technical

Officer, Dept of Horticulture, CG

Raipur 1

Manoj Chala, NFS Officer, NABARD Raipur 1

Khalid Ansari, WADI Project In-charge, NABARD

Raipur

Wholesalers, Dipak Mewala & Mr Lakhan

Raipur market 2

Middle size wholesaler, Mr

Jaganath

Raipur market 2

Small retailers, Sanjeev & Pawan Raipur market 2

District

Raigarh D R Karrah, Asst Director,

Horticulture

Raigarh 1

Dadu Lal Patel, Care taker of the

cashew garden

Raigarh 1

Three farmers of the Cooperative Lehengapali, Pusaur, Raigarh

3

Bilaspur SHDO, P K Sharma Bilaspur 1

M K Gupta, In Charge Garden

Superintendent

Bilaspur 1

Shib Bahadur Kashyap Market, Bilaspur 2

Outlets, Sanjeevani Shatri Market, Raipur

2

Bastar Consultant, Block Level, Mr Khilabon Sahoo

Faras Gao, Kondagao, Bastar

1

R K Mishra, Rural Horticulture Extension Officer, C L Shoniswar- Staff

Jagdalpur, Bastar 2

Mr Pandey, D D, Horticulture Jagdalpur, Bastar 1

Owner of a Private Cashew

Processing Unit- Rajpreet Industries, Harjinder Singh, and

one staff Paramjit Kaur

Markel,

Jagdalpur, Bastar

2

Labours of the Cashew Processing Unit

Markel, Jagdalpur, Bastar

6

Mr Vikram Singh, ACF Jagdalpur, Bastar 1

Kanker Charama,Kanker 1



Dr A K Towari, Tech Officer,

Horticulture Dept & staff

Kanker 2

Dhruman Lal Dhrub, Prochar Sochib

Zila Parishad, Kanker

1

Yusuf Bahi, Middle Man Nuri Rice Mill, Kanker

11

Mamood Bahi, Trader & Middle Man

Sitala Chowk, Kanker

8

Mr R P Minj, NABARD

representative

Kanker 1

Six Farmers (Subhas, Parboti,

Basonti, and others)

Nathiya Naw

Gao, Kanker

6

Dibakar Mandobi, Sarpanch Nathiyagaon,

Kanker

1

Harkit Sing, Vice President- Janpath

Charama, Kanker 1

Mr B L Patel, Charama, Kanker

Mr Basanta Yadav –President and

Kalaboti Devi- Secretary of Sahabhagi Samaj Sevi Sangstha

Charama, Kanker 2

Dhamtari Mr G R Churendra, CEO, ZP Dhamtari Zila Panchayat

1

Small Retailer of cashew Dhamtari Market 1

Total 70

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