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Economics of Production, Processing and

Marketing of Cashew nut in Lateritic zone of
West Bengal

A
Thesis submitted to the
Bidhan Chandra Krishi Viswavidyalaya
in partial fulfillment of the requirements of the degree of
Master of Science (Agriculture)

in

AGRICULTURAL ECONOMICS

By

Somenath Kundu

Department of Agricultural Economics
BIDHAN CHANDRA KRISHI VISWAVIDYALAYA
Mohanpur, Nadia
West Bengal-741252
2007
APPROVAL OF EXAMINERS FOR THE AWARD OF THE
DEGREE OF MASTER OF SCIENCE (AGRICULTURE)
IN
AGRICULTURAL ECONOMICS

We, the undersigned, having been satisfied with the performance of

Mr. Somenath Kundu, in the Viva-Voice examination, conducted today,

the 2007, recommended that the thesis be accepted for the

award of the Degree of Master of Science (Agriculture) in Agricultural

Economics of Bidhan Chandra Krishi Viswavidyalaya.

Name Designation Signature

Chairman
Prof. A.K. Giri (Advisory Committee)
.. ...

.. External Examiner

Member
Prof. B.N. Banarjee (Advisory Committee)
....

Member
Dr. Abhijit Nandi (Advisory Committee)

Member
Prof. Sankar Acharjee (Advisory Committee)
.
Bidhan Chandra Krishi Viswavidyalaya
Faculty of Agriculture
Department of Agricultural Economics
P.O. Krishi Viswavidyalaya
From:- Mohanpur, Nadia (W. B)
Prof. (Dr.) A.K. Giri India. PIN-741252

Ref. No . Date:-

Certifícate
This is to certify that the work recorded in the thesis entitled Economics of
Production, Processing and Marketing of Cashew nut in Lateritic zone of West
Bengal by Sri Somenath Kundu, in partial fulfillment of the requirement for
degree of Master of Science (Agriculture) in Agricultural Economics of Bidhan
Chandra Krishi Viswavidyalaya, is the faithful and bonifide research work
carried out under my personal supervision and guidance.

The results of the investigation reported in the thesis have not so far been
submitted for any other Degree or Diploma. The assistance and help received
during the course of investigation have been duly acknowledged.

Prof. A. K. Giri
Chairman
Advisory Committee
Acknowledgement
For a finding type of research work, one even could not complete the very first
stage, if helping hands from several individuals and organisations don t come forward.
This is not in line of exception in this work, too words can hardly do justice to express
my deepest sense of indebt ness and thankful gratitude to all time personalities who
renders both physical and mental guidance and support during the whole course of this
journey.
I am overwhelmingly delighted to pronounce honour and gratitude to the
chairman of my advisory committee, Prof. A.K. Giri, Bidhan Chandra Krishi
Viswavidyalaya, Mohanpur, Nadia for his ubiquitous circumspection, ever motivating
inspiration, keen interest, constructive criticism and tireless effort throughout the
tenure at the experiment and during the preparation of the manuscript.

I must sincerely express my feeling of indebtedness and honour to Prof. A.K.
Giri, Dept. of Agricultural Economics for his powerful boosting to keep myself mentally
strong in every stage of the investigation. I am also whole heartedly thankful to him for
his valuable suggestion throughout the period of research work in order to make my
thesis work more perfect and compact.

I shall be failing in my duty if I don t express my deep respect and gratitude to
other members of my advisory committee namely Prof. B.N. Banerjee, department of
Agricultural Economic, Dr. Abhijit Nandi, Sr. lecturer in department of Agricultural
Economics and Prof. Sankar Acharjee, department of Agricultural Extension, Faculty of
Agriculture, Bidhan Chandra Krishi Viswavidyalaya for their keen interest, valuable
advice and handful suggestions regarding this dissertation work. I am feeling wave of
joy to disclose my thankfulness to them for giving me moral support during the period of
the investigation.

Greateful acknowledgement is due to Prof. Kalyan Vattacharya, Prof. Arabinda
Mitra, Dr. Hasrat Ali, Dr. Sanjib Mukharjee, and Prof. A.K.Maity, Head, Deptt. of
Agricultural Economics, Bidhan Chandra Krishi Viswavidyalaya for their active co-
operation during this study.
I sincerely express my deep appreciation to all the non-teaching staff, Dept. of
Agricultural economics, for their valuable help and full cooperation as and when
required.

I thankful acknowledge the support, suggestions, encouragementand assistance
that I received from Dr. Milan Besra (D.H.O. Bankura), Dr. Subrata Manna
(A.D.H.O. Bankura), Dr. Bidyut Das (S.M.S. T&I, Bankura-1) during the
investigation.
My heart full thanks to my classmates Anindya Mukhopadhyay, Utpal Kr.
Ghosh, Agniswar Jha Chakraborty, Sekhar De, Arun Kr. Jana, Bishnu Charan Mahato,
and Gopi Raman Kumar for their cooperation and rendering all helps at the time of
requirement.

I extend my deepest sense of thankfulness to Arup Das, Utpal Ghosh, Nalkishor
Mandal, Biswajit Basu, and Chandan Karak for being so good friends and gifting me a
bucket of so wonderful and precious memories.

I would like express my thanks to Ujjwal Kundu, Keshab Kundu, Rina and
Munmun (Tukai) for extending help and mentally support at the time of need and for
being good friends.

I also feel Elysian pleasure to breathe my deepest respect and gratitude to my
beloved parents for extending their endless lone and blessing, what make it easier for me
to over come every hurdle that I faced. I would like to express my love to my brothers
and sisters as well as respect to all other family members for giving necessary support as
and when required.

I convey my regard to the Iconsys, Kalyani for their meticulous effort in
printing my manuscript.

Date:

Place: Mohanpur, Nadia (Somenath Kundu)
DEDICATED
TO
MY
FAMILY
Chapter Page
Particulars
No.

I. Introduction .... . 1-16

1.1 General overview 1-4

1.2 Economic overview 5

1.3 Cashewnut Production 6-10

1.4 General techniques of Cashew nut Processing 11

1.5 Marketing prospect of Cashewnut in India and abroad 12-15

Objectives 16

II. Review of literature .. .. 17-21

III. Research Methodology .. 22-23

IV. Result & Discussion ... 24-60

4.1 Distribution of Cashewnut orchards 25-26

4.2 Pattern of cashewnut yield over time 26-44

4.3 Cost of cashewnut orchards 45-49

4.4 Cashew nut Processing 50-55

4.5 Marketing of Cashewnut 56-60

V. Summary & Conclusion ... .. 61-62

VI. Future scope of research 63

BIBLIOGRAPHY i-v

APPENDIX a-e
Table No. Title Page No.

1.1.1. State wise varieties 3

1.1.2. Nutritional value of cashewnut 4

1.3.1. Cashewnut production in world in different countries over 8
different years.
1.3.2. Cashewnut production in India in different states over 10
different years.
1.5.1. Export of cashew Kernel from India in different years 13

1.5.2. Export of cashew Nut Shell Liquid from India in different 14
years
1.5.3. Import of raw cashew nuts to India in different years 15

4.1.1. Distribution of cashew nut orchards studied by blocks and 25
year of establishment (Government Orchards).

4.1.2. Distribution of cashew nut orchards studied by blocks and 26
year of establishment (Private Orchards).
4.2.1.1. Distribution of government orchards by year of 31
establishment, location, their plant-density and
productivity variation.

4.2.1.2. Distribution of Private orchards by year of establishment, 32
location, their plant-density and productivity variation.

4.2.2.1. Productivity difference on 7th year yield by plant density of 33
cashew orchards and by years of establishment
(Government Orchard).

4.2.2.2. Productivity difference on 10th year yield by plant density 34
of cashew orchards and by years of establishment
(Government Orchard).

4.2.2.3. Productivity difference on 5th year yield by plant density of 35
cashew orchards and by years of establishment
(Government Orchard).

4.2.2.4. Productivity difference on 5th year yield by plant density of 36
cashew orchards and by years of establishment (Private
Orchard).
4.2.2.5. Extent of density and 7th year yield by orchard size ( Small, 37
Medium & Large) for three year together (Government
Orchard).

4.2.2.6. Distribution of government orchards by orchard size and 38
plant density.

4.2.2.7. Distribution of Private orchards by orchard size and plant 38
density for Private Orchards.

4.2.2.8. Average yield in Kg/ha (7th year fruiting) by orchard size 40
and density for Government Orchards.

4.2.2.9. Average yield in Kg/ha (5th year fruiting) by orchard size 42
and density for Government Orchards.

4.2.2.10. Average yield in Kg/ha (5th year fruiting) by orchard size 44
and density for Private Orchards.

4.3.1. Table NPV, B/C and Rate of return on investment 48-49
4.5.2.1. Price of raw cashewnut in different channel 58

4.5.2.2. Price of graded processed nuts in different channel 59

Figure No. Title Page No.

4.2.A. Production in first 10 year fruiting (Kg/ha) in different 27
year and different orchard which is planted in 1990.

4.2.B. Production in first 10 year fruiting (Kg/ha) in different 28
year and different orchard which is planted in 1991.
4.2.C. Production in first 10 year fruiting (Kg/ha) in different 29
year and different orchard which is planted in 1992.
4.4.1. Cashewnut processing steps 50
4.5.1. Diagram of marketing channels 57
Author : Somenath Kundu
Title of the thesis : Economics of Production, Processing and
Marketing of Cashewnut in Lateritic zone of
West Bengal
Degree to which it is submitted : M. Sc. (Ag.)
Faculty : Agriculture faculty, B.C.K.V., Mohanpur, Nadia
Chairman of the Advisory committee : Prof. (Dr.) A. K. Giri
Year of submission : 2007

Abstract
Cashewnut production and their marketing prospects have been studied in Lateritic zone
of West Bengal. The study area covered Khatra, Chhatna, Barjora and Simlapal blocks of
Bankura. It covered 28 government orchards and 9 private orchards. The specific objectives of
the study ware - I) To examine the various costs involved in cultivation and production of
cashew nut and returns thereof over time. II) To analyse the break-even point, NPV, B/C ratio,
annual rate of return of the cashewnut orchards. III) To identify the channels of marketing and
processing of cashewnut, and price formation at each stage leading to ultimate retail price at
consumers’ end. Cost and return flow overtime for private orchards and government orchards
were generated by interview method. The orchards were categorised on the basis of density of
planting (Low, Medium and High) and on the basis of orchard size (Small, Medium and Large).
Orchard size varied from 0.4 ha to 35 ha and plant density per ha varied from 40 to 960. Nine
orchards established in 1990, 7 orchards established in 1991 and 12 orchards in 1992 – totaling
28 orchards under government setup were covered. Another 9 private orchards established in
1996, 1997 and 1998 also covered. Productivity trend, costs and returns analysis for estimating
break-even point, estimation of discounted cost and return flow for arriving at NPV, B/C ratio,
annual rate of return on investment have been attempted. Processing and marketing aspects have
been covered to elicit the process of price formation at different stages and thereby to estimate
producers’ share in consumers’ rupee. Productivity of the orchards was found to increase at
increasing rate upto 7th year of fruiting. Thereafter, it increased but at a decreasing rate.
Productivity of the orchard, depend upon the size and density of planting. Analysis of variance
has shown that plant density was able to explain productivity variation sufficiently than by the
orchard size. Rise in plant density may increase productivity if there is simultaneous
proportionate increase in input. Break-even analysis has shown that the 7th year volume of
output was sufficient to cover up total cost by its return. NPV, B/C ratio was favorable for the
cultivation of cashewnut. Annualised return from the cashew cultivation appeared not only to
be similar to that of other crop cultivation in the area, but in many cases, its returns were very
much lucrative. The producer- seller was able to sell raw cashewnut at a price of Rs. 35 per kg to
wholesaler or processing agent. After processing and marketing through different channels, retail
prices were found to prevail at Rs. 220 to Rs. 320 per kg depending upon the various grades of
nuts. The producers’ share in consumers’ rupee was estimated to vary from 10 percent to 15
percent. The above findings show a very bright possibility of cultivating cashewnut in the red
and lateritic zone of West Bengal which so long remained unearthed.