How did the Kerala Cashew Development Corporation make losses for years?

When former Kollam district panchayat president S. Jayamohan, a CPM man, assumed charge as the Kerala State Cashew Development Corporation (KSCDC) chairman, the word ‘profit’ seemed a hard nut to crack. The workers of the 30 factories of the KSCDC were in perpetual doldrums as the units sustained losses year after year. However, after a few years into Jayamohan’s captaincy, KSCDC has a different story to tell. KSCDC has announced profits for the first time in its 45-year-old history. What made the ailing enterprise tick back to life is something Jayamohan, an enigmatic leader, shared with Onmanorama in a chat.
How did the Kerala Cashew Development Corporation remain a loss-making company for years?

KSCDC, which provides employment to thousands of people, has been sustaining losses from the outset. The reasons were inefficiency and lopsided management efforts. Deals were fixed with vested interests. So, there were no quality checks on the cashew procured. A brief survey showed that the corporation incurred a loss of Rs.2 crore by staying in operation for 10 days. This meant a loss of Rs.20 crore when the factories were operational for 100 days. That loss used to be compensated by the government. We found irregularities in the whole system – right from procurement of raw cashew to the sale of processed kernels.

What steps did you take to change the system?

First, we brought about transparency. We introduced the e-tendering system. We asked all factories to ensure the pre-decided output. We ranked 30 factories according to the output and the onus was solely on the management concerned. We made the management pay for the losses too. We wanted the efficiency of workers raised. We introduced e-tendering in the sale of cashew kernel. Once these measures were put in place we saw a change – a reversal from losses. And early this year, for the first time in the history of KSCDC, we recorded some profit, though on a minor scale. Within a short span of time, we recognized that KSCDC can be turned into a profitable and self-reliant corporation even while providing benefits to workers.
What challenges did you face in driving your mission?

Our prime concern was the shortage of good quality raw cashew. A lion’s share of the raw cashew produced in the country was procured by the private factory owners and they made the profit. We decided to buy those raw cashew from farmers and government plantations by giving a reasonable prices. This threw up some issues. Some private factory owners wanted KSCDC in the red always. This would help them cite our case and desist from providing benefits to employees and workers. The vigilance probes and complaints were part of a ploy to dent the corporation’s image. But we are putting up a brave face and will be cleared of all charges as the public and the trade unions support us.

How do you intend to further the prospects of KSCDC?

The corporation’s kernel is much in demand everywhere. We get good prices in the domestic market and it is called Indian kernel abroad even if it is from Kerala. But countries like Vietnam are trying to dominate the cashew market. So, we can pose a challenge to them by providing quality kernels. In our state, we are now trying to market them through various centres like Triveni super market, Milma, etc. We have also submitted a proposal to the government to provide cashew products to Anganwadi children once a week as it is good for their mental and physical health. We have also started making brisk strides in domestic production of the raw cashew. As part of this, we have distributed 2 lakh saplings to farmers and provided them with required assistance.


We are planning to make use of the cashew fruit to produce jam, vinegar, and wine to support cashew growers. We plan to provide an ambulance for cashew workers. Besides, we have earmarked Rs.25,000 to support children of workers pursuing entrance coaching for MBBS. Special training programmes for children of workers pursuing civil service examination are also being envisaged.

What are the pitfalls you see; what more needs to be done?

Around 15,000 people work in 30 KSCDC factories. Only 10 of these factories are fully owned by KSCDC. The rest are leased out. We have made a proposal to take over the 20 twenty factories and the requirement is Rs. 69 crore. If the government sanctions that amount, the KSCDC can provide employment to 5,000 people. By then, KSCDC will be in a position to accommodate skilled workers who are being exploited by private factory owners.