Cashew farming in india
India is the second largest exporter of Cashew Nuts. in reality, the highest production of cashew nuts happens in the african continent. Unfortunately, processing of cashew nuts is a tedious process and the availability of machinery is limited in most african countries. The cashew (raw) produced in most african countries are exported to vietnam which has the technology to process cashew nuts. Today vietnam is the largest exporter of cashew nuts in the world standing at 2,500,000 Metric Tonnes per year. Thats 2 and a half million metric tonnes per year as compared to India which exports 750,000 metric tonnes in the same period. The cashew exported from India to Europe gained a margin of 250% and most of the raw cashew came from Ivory Coast, which is the world’s largest producer of cashews.
The numbers in the cashew industry show a grim reality. Countries like ivory coast which produce the highest volume do not actually make the most amount of money. Countries like Vietnam and india are importing raw cashew from african countries and exporting finished products to european countries at a margin of 250% !
The scenario in India itself is no different when it comes to farmers. Farmers with small and medium land holdings who cultivate cashew are turning to other crops due to various factors. From manpower, processing and price, farmers find it difficult to get the desired price for cashew nuts in the local market. Finished produce is often highly priced, but processing raw cashew to finished nuts suitable for consumption requires manpower and labour, if not machinery.
The question eventually is, “is cashew farming profitable?” . Like many business and farming practices, there are many sides to this question. India is still one of the largest producers and exporters of cashew nuts. That’s good but most of the products which are produced and exported from india does not mean that the farmers take a good benefit from them. Everyone knows that the margin of price from the farmer to the end user is steep. Cashew nuts which are sold in the local market as raw products by the farmers fetch a price of 90-100 rs per kilo. The end user price for the same produce is 1000 Rs. 10 times the price which the farmer sells for.
The processing from raw cashew to final kernels is intensive and requires manpower and skills. Machinery has been effective to take part of the process away from manual labour but the cashew industry still relies a lot on manual labour to achieve most of the processing today.
With that said, the price from raw to finished cashew rising at a 10 times from the price the farmer sells to the end user is often not justifiable. Many farmers do try to process the cashew locally at their farms but there are limitations to the same and quality concerns which can reduce the price of cashew nuts if not processed properly. For instance a whole nut costs 1000 Rs per kilo but the nut if split costs 150 rs. The price drop is significant.
Nuts are often graded by size too and the larger the nuts, the better the price. All these factors make it hard for farmers to produce finished nuts by themselves and rely on companies or people who do these activities as a full time job.
is cashew farming profitable
Cashew farming is reasonably profitable but farmers could take it a step ahead to increase profit by over 200% with effort. Raw cashew fetches a lower price. From 70-90 Rs per kilo. With an average yield of 1600 Kilo per acre, the farmer can expect nothing more than 144000 Rs per acre in the 10th year. The yield per acre increases by 178 KG Every year till the 10th year after which the yield is stagnant. A good variety tree can yield up to 20 KG in the 10th year, but a reasonable calculation of 50% drop in yield is counted for. Most trees do not yield 20 KG per year and this yield is usually dependent on location, weather, soil conditions among others. Even with the basic price for raw product and the minimal yield, it is possible to get a decent revenue for cashew nuts in its raw form.
But with a processed product, the price could go up to 600 rs per kilo.
But there are a few factors to consider.
- 3.5 KG of raw cashew nut produces 1 Kg of consumable cashew nut. The farmer already is set to lose on the quantity side once processed when it comes to quantity. This is of concern to most farmers but consider the profits after processing.
- Quality of the cashew determines the price. Whole nut graded as W-180 (meaning one pound of cashew nut has 180 counts of cashew.) costs approximately 900 Rs and could go a bit higher. Cashew Graded W-210 (meaning one pound of cashew has 210 cashews in number) costs 800Rs average. Generally speaking, the larger the cashew the price increases. If the farmer is producing good quality cashew which has a good size, the farmer can expect a great revenue.
- Broken and split cashew prices drop drastically. When processing, farmers should consider the best processing units. Processing 1 kg of cashew usually costs up to 20 KG per kilo. This price is extremely feasible if the farmer is willing to go the extra step. Once processed, the nuts need to be graded and separated depending on its quality. The split and broken cashew should be minimal to increase revenue. This depends on the processing unit.
- Packaging and storing. Cashew is a seasonal produce. Once the season is gone, the prices tend to rise. If farmers can pack and store raw cashew, the produce can be sold in the market at a later period for a better price. Of course storing and packaging comes with its own caveats. The cost involved could depend on the quantity and the packaging.
To take the analysis lets consider the same in numbers
|Total Yield per Acre (Raw)||1600 KG|
|Yield Per acre (Processed)||460 KG|
|Processing Costs||32000 Rs (20 Rs per KG)|
|Storing and Packing||30000 Rs (18.5 Rs per Kg)|
|Total Expenses||72000 Rs|
|Gross Profit on Finished produce||276000 (@600 Rs per kg Average price)|
|Net Profit||204000 Rs|
The profit margin increases by 60,000 Per acre just by processing the cashew. Also note that the price is slightly inflated in the storing and packaging costs. If this was to be completely removed an additional profit of 30,000 Rs can be accounted for per acre.
Clearly, Cashew farming is profitable but it does not stop by selling raw cashew and the farmer should be willing to take it a step ahead.
A better understanding of the expenses involved in cultivation of cashew is available on https://agricoop.nic.in/sites/default/files/Cashewnut%20Cultivation%20%281%29.pdf
Cashew import export Business
While cashew nuts in India seem to be abundant, there are reasons to import cashew from other countries. For instance, the cashew in Africa is known to be far superior in size and quality when compared to those by local cultivars in india. The prices too are reasonable. Even after import, you could see that the price is 5-7% less than that of the local price. While raw cashew can be imported with minimal duty , tax and charges, it is not a feasible model to sell raw cashew in the market in India, once imported. Most importers do so to process the cashew and then export the produce to Europe and other countries where the prices are a lot higher. This is a great model and it’s been done by a lot of people in india. Cashew being a seasonal produce, it’s important to keep cashew processing units running and imported products keep these businesses running throughout the year even after the season in India is over. Check out the video below for details on cashew import and export business.
is cashew farming sustainable
When it comes to sustainability, cashew farming is free from pesticides and chemicals in most areas. The plant is hardy and can weather most problems without much attention after the first few years. The maintenance is minimal and the harvesting is time consuming but easy. Harvesting usually is picking fruits which fall naturally from the tree in most cases and requires no special equipment or skilled labour.
The processing on the other hand is a different story and is of concerns in certain states and areas. Women are the most employed in the cashew industry with 80% of the cashew workers. Processing cashew required manual work and the raw cashew is toxic. Many women were not provided with gloves and used their hand to separate the kernels from the cashew in the past. Plastic covers were used in many cases. Today the processing is much more standardised and with machinery, most of the work is much easier and safer. Ethical concerns do exist in several parts of the cashew industry but are limited.
In general, the cashew industry and farming is a sustainable farming model. The profits are moderate, the use of chemicals and pesticides are minimal and intercropping of other plants is possible for the first few years when the trees are not in full growth.
cashew nut yield per acre in india
Yield of cashew nuts varies from plant variety. Grafted plants are known to have higher yield if taken from a good parent plant. Plants from normal seedlings often give an average yield of 1600 Kilos per acre a year in the 10th year. With grafted plants, the yield can go as high as 2500-3000 Kilos per year in the 10th year. The drawback to grafted plants is its life. Apart from the fact that they have a high mortality rate in the first year, they also have a shorter lifespan overall when compared to the trees germinated from good seeds.
The yield also depends on the total number of plants per acre. While some farmers accommodate 170 plants per acre, it’s also common to see up to 70 plants per acre, allowing a lot of space between each tree. With larger spacing, the total yield per acre is much lesser. High density plantation in cashew is not common but can be practiced with a bit of care and knowledge which will effectively increase the total yield per acre.
cashew cultivation in india
Cashew nut is cultivated in the eastern and western coastal areas of india. Maharashtra, Goa, Karnataka, Kerala, Tamil Nadu, Andhra Pradesh, Orissa and West Bengal are the major producers of cashew nuts in india. The highest cashew producing state is Maharashtra followed by Andhra pradesh, Orissa and karnataka. India Produces approximately 23% of the world’s cashew which is exported and India is the second largest consumer of cashew nuts.
80% of the cashewnut exported came from Kerala at one point of time. Today, Maharashtra leads in cashew export. Lack of manpower, change in policies etc has changed the trend in cashew production and exports over a period of time. These changes are common in businesses and the trends change.
cashew farming in tamilnadu
While cashew nut farming trends deteriorated in kerala, Tamil Nadu , the neighbouring state embraced cashew to its benefit. While labour laws became stringent in kerala, Laws in Tamil nadu became a lot more favourable for cashew farmers and workers in tamil nadu, creating a large shift of cashew produce to be transferred to various locations in tamil nadu. Apart from planting new trees, tamil nadu setup a range of cashew processing units and employing people to produce more cashew in the state and exporting them.
Today tamil Nadu exports over 71000 Metric tonnes per year, while kerala exports around 88000 Metric tonnes of cashew. Tamil nadu stands sixth in cashew export while kerala is the 5th largest exporter of cashew in the country.
what is organic cashew farming
Very rarely do we come across foods which are organic. Most of the foods are already adultered by the time they reach the packing stage. Cashew nuts is one of the few exceptions. Most farmers in india do not fertilize the land when it comes to cashew farming. While there are chances that the yield increase on adding fertilizers, most farmers find it comfortable with the yield in the cashew farm which comes without chemical fertilisers. Added effort and investment in the farm is often a measure most farmers in india are not willing to take.
Apart from fertilizers, even pesticides are usually rare when it comes to cashew farming. The fruits , though susceptible to pests, the nuts usually are free from any form of pest, thanks to the hard shell and the toxic chemicals in it. The fruit is rarely used in india. Apart from home consumption, the fruit is used for making feni , a local Alcoholic drink in india. Manufacturing Feni is prohibited outside Goa and requires licences for production. Most of the fruit which comes from cashew farming are dumped. The fruit itself has very poor shelf life and is not easily transportable.
When the fruit is of no importance, when the nuts are safe from pests and diseases, the plant itself is the only concern to farmers. The plant, once established, will live up to 80-100 years without any intervention. Adding fertilizers or pesticides are simply not needed for a normal production of cashew.
Thats probably one of the few reasons why cashew is still one of the best nuts, safe and organic.