The Karnataka-based All India Cashew Growers Association (AICGA) has urged the Centre to implement minimum import price (MIP) on cashew kernels used in the units coming under SEZs (special economic zones) and EOUs (export-oriented units).
In a memorandum to the Prime Minister, the president of AICGA, Nanya Achyutha Moodathaya, said that the members of the association appreciate the measures taken by the Government in protecting the interest of the farmers and the industry by implementing MIP on cashew kernels, imposing 70 per cent duty on import of cashew kernels, and the like.
The memorandum said the January 1 notification suspending the license to import shelled cashew was a welcome move that helped the industry to revamp from the current crisis and the farmers were also getting the benefit. “However, the DGFT has on February 14 2020 came up with a clarification under reference above, making MIP not applicable for units under SEZ and EOU,” it said.
The memorandum explained that due to low raw cashew prices and mechanized processing, the cashew kernel prices in other countries are less than the cost price in India. However, due to high quality of nuts and processing in India, Indian cashew kernels enjoy a premium price in both domestic and overseas market.
“When SEZ/EOU are allowed to import cashew kernels at less than MIP, the low quality / low priced cashew kernels (especially ‘brokens’) so imported are being sold in the domestic market under the pretext of job works and substituted with ‘wholes’ kernels to fulfil the export obligations,” it said.
This lowers the kernel prices in India. Even when low priced cashew kernels are re-exported from SEZ/EOU as ‘Indian Cashew’, the domestic processing units that cannot compete with them are affected and hence forced to lower the raw cashew prices they buy from farmers to compete with SEZ/EOU units in the international market. This reduces the farmers income drastically, it said.
When the farmers are delighted with the efforts and commitment of the Government to double the income of farmers, such decisions of DGFT will drag them into debt pits, it said, and requested the Prime Minister to direct DGFT to withdraw the above notification.
The association memorandum said that the DGFT should place the import of all types of processed and semi-processed cashew kernels under the ‘prohibited’ list as a permanent measure to protect the interest of cashew farmers in India.
It also requested the Prime Minister to increase the import duty on raw cashew nuts. This will help cashew farmers to accrue more benefit, the memorandum said.