Cooperative procurement and processing of cashew

Supported by BAIF-DHRUVA, Wadi-owning tribal families in remote villages of South Gujarat have been successfully engaged in cashew production, procurement, processing and marketing for over a decade.

The need emerged in 1998-99, when cashew trees in Wadi plots in Vansda and Kaprada talukas of Navsari and Valsad districts started bearing fruits. This part of South Gujarat was not traditionally known for production of cashew, so no system of procurement and marketing was in existence then.

In February 1998, a team from DHRUVA was sent to participate in a 15-days training programme on cashew processing at Mangaon, in the Konkan area of Maharashtra. The team included supervisors and food technologists of the Vasundhara cooperative, set up earlier at Vansda.

Women constitute over 50% of work force in cashew unitsWomen constitute over 50% of work force in cashew unitsMachinery required for cashew processing such as a boiler, dryer and cutters were procured and cashew processing was initiated on a pilot scale in March 1998.

Around 600kg of raw cashew were procured at the rate of Rs 20/kg from Wadi plot-holders, through people’s organisations (POs) known as gram vikas mandals (GVMs), and  processed in the pilot plant. Around 80kg of cashew was sent to Dahanu, for comparative trial processing in an outside unit.

The entire finished product was sold at Rs 240/kg.  A detailed techno-economic feasibility study was undertaken after this trial and the results were found to be encouraging.

In 1999, four cooperatives for decentralised cashew procurement and processing were set up with project funding, in villages in the Karjun, Sutarpada, Dixal and Mandava clusters. Total investment on building and machinery for each processing centre was around Rs 10 lakhs.

Male and female heads of Wadi-participant families are members of  each cooperative, at a nominal entrance fee. Wadi families do not have to compulsorily become members of cooperatives and members are not required to compulsorily sell their produce to the cooperatives. The cooperatives are free to source produce from farmers who do not own Wadi plots; the cooperatives also engage in other businesses (see Wadi cooperatives offer diverse benefits).

As more Wadi plots started yielding cashew, more cluster-level cooperatives were set up. As on March 31, 2009, there were 11 cashew cooperatives covering over 13,500 Wadi plot-owning families in DHRUVA’s work area (Navsari, Valsad, and Dangs district of Gujarat, and the union territory of Dadra and Nagar Haveli).

Each cooperative has a staff of  around 20 at its processing unit, including male and female workers, one supervisor and an accountant. Women are preferred for activities like peeling and grading, and constitute over half the total work force. Workers are mainly youth of landless families from nearby villages.

After selection, workers are given a few days of skill-training, followed by on-the-job training. During the training period, they are paid a stipend. Once they develop expertise, payment is made on a piece-rate basis. In 2009-2010, workers earned Rs 60 to Rs 110 per day.

The entire system of cashew procurement and processing is standardised. 

Village-level GVMs act as primary producer groups and procure raw cashew from farmers, for transportation to the nearest cooperative. GVMs do primary grading and sorting, according to laid down guidelines.

The cooperatives buy the sorted raw cashew at a pre-announced price and pay GVMs accordingly on a fixed date, with a commission per kg of procurement. The GVMs disburse payments to farmers, according to quantities sold.

After procurement of raw cashew from Wadi plot-holders and others at a predetermined price, processing is done in cluster-level cooperatives as follows.

  • Raw cashew is dried and steam-cooled.
  • The cashew is deshelled by workers using foot-operated cutters.
  • Shelled cashew is dried and peeled, to get cashew nuts.
  • Cashew nuts are graded according to quality.
  • Cashew nuts are packed in tins.

On an average, cashew processing is done for 6-7 months of a year. Every day around 80 kg can be processed at each cooperative.

Inter-cooperative transfer of raw cashew is practiced to ensure that the processing activities continue beyond a few months in cooperatives where procurement has been inadequate, and to reduce the pressure on new processing centres, where labour may not be skilled enough to process the entire stock of raw cashew procured.

Processed cashew is sold by cooperatives directly to wholesalers or marketed through the  Vasundhara cooperative. After deducting marketing charges, it passes on the final price realised to each cooperative.

Vasundhara sells cashew to wholesale traders, through its own retail outlets at Kaprada, Dharampur, Pune, and Sutarpada, and to large buyers like TRIFED, Mumbai Grahak Panchayat and Apna Bazaar.

Based on operational experience and market feedback, changes have been introduced:

  • Heat transfer dryers have installed in all cooperatives.
  • 80-kg boilers have been installed to get better product quality.
  • Grading has been mechanised.
  • Value-added products like salted cashew nuts have been introduced. Cashew nutshell liquid production has been started on a pilot scale
  • Packing with vacuum and nitrogen flushing has been adopted to increase the shelf life of cashew nuts.
  • Different units of packing have been introduced, from 50gm to 10kg.

Following the setting up of the cashew cultivation and processing infrastructure by BAIF-DHRUVA, some private companies have set up processing units in the region, and wholesale traders have emerged in substantial numbers.

As a result, Wadi plot-holders enjoy competitive prices for raw cashew, there is pressure on the cooperatives to maintain quality and costs, and commission paid to GVMs has increased.  Price earned by farmers for sale of raw cashew has risen from Rs 20/kg in 1999, to a little over twice that amount in 2009.

Around 20-50% of raw cashew produce from different clusters in South Gujarat is now sold by Wadi plot-holders to entities other than the cooperatives.

Depending on the average age of cashew trees in a cluster, and presence of competitive procurement entities, each of  the 11 cashew cooperatives processes 8 to 50 tonnes of raw cashew every year.

In 2008-09, total raw cashew procured by the 11 cooperatives was 288 tonnes and net sales income after processing was Rs 33.80 lakhs.

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