Palasa cashew operators put riders on starting fresh operations

The Palasa cashew processing operators have decided not to commence the 2005-06 season operations, which begin from April 15, until they get proper clarifications from the state government on the new VAT regime, apart from assurances on the Pollution Control Board staff's harassments.

"Cashew manufacturers at the Palasa cashew market have closed their processing plants four days back due to the end of the 2004-05 cashew season. While we have been facing unbearable harassment from the Pollution Control Board on one hand, the workers are demanding a hike in their wages on the other. Apart from this, the government machinery is not in a position to clarify the doubts about how much burden will be laid on the cashew industry in the new VAT regime. So, we will not start the operations from mid April unless we get proper assurance on these issues," Malla Nooka Raju, president of Palasa Cashew Manufacturers Association, told Business Standard.

"There are about 200 cashew manufacturing units in and around Palasa and these units processed about four lakh bags (each bag contains 80 kg of cashew nuts) during the 2004-05 season. The Pollution Control Board's staff are troubling us frequently in the pretext of air pollution," he alleged.

"Compared to the manufacturers in our neighbouring state, Palasa cashew manufacturers are paying an additional wage of Rs 200 to the workers for processing a bag of cashew nuts. We are not in a position to compete with the Orissa traders because of this. These hardships notwithstanding, workers are again demanding a hike in their wages," he said. In addition to this, the commercial tax officials are not announcing the rate of tax on cashew kernels in the coming VAT system," he added.

During the 2004-05 cashew season, the manufacturers have paid higher prices for cashew nuts. "During the 2003-04 season, we purchased nuts at Rs 2,300-2,700 per bag, whereas in 2004-05 we have paid Rs 3,600-4,100 per bag. Owing to this, our margins declined significantly during this," he added.

"The farmers are expecting a shortfall in cashew nuts' production in the coming season. Because of this, the purchasing prices are expected to continue in the same range during next season. At this juncture, it is not possible for us to run the cashew processing units without the government support," he said.