India: Efforts to set up cashew board hit roadblock

Some lobbies are reportedly hindering the setting up of a cashew development board (CDB) before the new Union Council of Ministers assume office, and they are alleged to have managed to make the Planning Commission to come out against the proposal on May 4.

The Planning Commission in its letter No. N-14071/2/2009 -PAMD dated May 4 addressed to Mr Sudhir Garg, Director, Department of Commerce, has said: "This proposal cannot be considered by the Commission. I gather from memo that the consent of the Ministry of Agriculture has not been obtained for merger of DCCD (Directorate of Cashew and Cocoa Development) with Cashew Export Promotion Council (CEPC)."

The Planning Commission, which is said to have agreed to the setting up of the Cashew Development Board earlier, has now come out saying, "in Planning Commission's view merging of a directorate (DCCD), which is a government department outfit, and a council (CEPC), which is an autonomous organisation (not paid from the consolidated fund), is not possible".

The Commission has, therefore, suggested that for creating Cashew Board by merging CEPC with DCCD an inter-departmental meeting involving Department of Commerce and Ministry of Agriculture may be held. "In case a consensus does not emerge, then this matter could be taken to the Committee of Secretaries."

Mixed views

The Union Commerce Ministry has, in fact, been trying to create a cashew development board on almost similar lines of other commodities boards, such as for rubber, coir, coconut, coffee, tea and so on, and the only opposition was from the Ministries of Agriculture and Finance at the later stage.

"The Ministry of Finance says it has no money for the Board, while the Agriculture Ministry wants the cashew sector under the National Horticulture Mission (NHM)," Mr G.K. Pillai, Union Commerce Secretary, told Business Line early this year.

The Commerce Ministry is interested in setting up of the Board considering the importance of the crop, which is an input for the export processing industry, providing employment to around five lakh workers mostly women in the rural areas, he said.

The export earnings range between Rs 2,500 and Rs 2,800 crore a year.

Given its importance as a major cash crop, with high potential for diversification and commercialisation, its development in a comprehensive manner is inevitable, he said.

"When the other crops/commodities can have Boards why can't cashew," he asked. Fully realising its importance, the Planning Commission has already approved the creation of a Cashew Development Board, Mr Pillai pointed out.

According to official sources, the Planning Commission's latest finding now that CEPC is an autonomous organisation needs to be read along with the fact that the Council (a no-loss no-profit organisation limited by guarantee, registered under Section 25 of Indian Companies Act) was established by the Union Government on August 17, 1955, with active co-operation of the cashew industry to promote exports of cashew and allied products from India.

Export promotion schemes

The Centre has been allocating huge funds under export promotion schemes for implementation through the CEPC during each five-year plan. The allocation for the Eleventh Plan is Rs 19.36 crore. Besides, the Union Commerce Ministry under Assistance to States for Developing of Export Infrastructure and Allied Activities (ASIDE) scheme has financed the construction of CEPC Laboratory and R&D centre at Kollam at an estimated cost of Rs 6.06 crore from the Central Component Fund.

Considering the flow of public money into "autonomous bodies allegedly controlled by vested interests" might have compelled the Union Commerce Ministry, the fund provider, to bring it under a Commodity Board to ensure proper monitoring of the fund utilisation, and to ensure transparency in all its activities, said the official sources in Union Agriculture Ministry.

In fact, creation of a Board was initiated after a Committee of Ministers had agreed in principle earlier aimed at achieving self-sufficiency in cashew production, taking research findings to the farmers' field, improving quality of products, processing, marketing and exports, they said.

Creation of the board is unlikely to entail any huge expenditure on the part of the Centre, as it has been proposed to be created by merging the Cashew Development Directorate under the Union Ministry of Agriculture, Cashew Export Promotion Council and its technical division and laboratory supported by the Commerce Ministry. Currently, the Kochi-based Directorate with a mandate to implement certain schemes apart from monitoring the implementation of some of the schemes by State governments is functioning with 50 per cent staff strength.

It is evident from the slow pace of progress achieved in cashew cultivation, even after spending hundreds of crores of rupees in several five-year Plans, that systematic cultivation using scientific methods is still lacking in this sector for want of proper co-ordination and extension services, a growers group said.

Recommendations

Given this situation, official sources said that department-related Standing Parliamentary Committees on Commerce in their 42nd, 46th, 50th, 58th, 65th, 70th and 77th reports recommended formation of a Cashew Board. Others who had made such recommendations are department related Standing Parliamentary Committee on Agriculture; raw nut Committee of Ministry of Commerce in 1960s; Indian Cashewnut Development Council (ICDC) during its functioning period from 1966-1986, in which, the DCCD was functioning as its Secretariat.

Besides, the Indian Institute of Foreign Trade, in its study report on Indian Cashew Industry conducted as part of World Bank aided Multi-state Cashew Project (MSCP) during the period from 1981-86, also recommended the setting up of the Board. Another premier institute which had recommended its creation was the Indian Institute of Management, Calcutta, in its report on evaluation of cashew development programmes sponsored by the DCCD.

Despite all these recommendations and reports, formation of a unified agency for cashew so far remained a non-starter. "The attitude by certain Ministries in this matter under the pretext of economy in expenditure carry little weight in comparison to the revenue and employment this sector generates," they added.


Source: thehindubusinessline.com

Publication date: 5/25/2009