The cashew industry, which has flourished for hundreds of years in Vetapalem village near Chirala town in Prakasam district, is beginning to show the first warning signs of a slump.
Cashew units are reportedly struggling to sustain operations in the wake of a shortage of raw material and a skilled workforce, with fingers being pointed at the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) for the lack of manpower.
Only those plantations owned by the Forest Department, spread over 1,000 acres in and around Vetapalem, are now surviving, with plantations in the private sector reportedly making way for real estate ventures.
As a result, the processing units are heavily reliant upon import of raw nuts from countries like Nigeria, Tanzania, Ivory Coast and Ghana in order to avoid having to shut the units down.
The fluctuating market price in the international market price is eating into our profits, said Vetapalem Cashew Manufacturers Association president Atmakuru Sudhakar.
Irrespective of the price prevailing in the international market, we keep importing raw nuts an year in advance. But the fall in local demand this year has hurt our margins, he said.
The Centre should considering withdrawing not just import duty on raw cashew nut but also impose hefty import duty on processed cashew from countries like Vietnam where processing is fully mechanised, industry stakeholders said.
The industry needs support from the government for mechanising the process of shelling, drying and grading to compete with units in Southeast Asian countries, said Andhra Pradesh Cashew Manufacturers Association president M. Phani.
Subsidy on machinery and soft loans for the units are the need of the hour to overcome the present crisis, said a nut processing unit owner P.V. Subba Rao. The unauthorised units located near plantations avoid payment of GST, which is adding to the woes of registered processing units, he said.