Handicraft industry is one of the traditional industries of Kerala. Kerala has the tradition of making beautiful handicrafts with ivory, bamboo, palm leaves, seashells, wood, coconut shells, clay, cloth, coir, metals, stone, lacquer ware, and so on. Many old handicraft classics can be seen in palaces, old heritage homes and museums in the State. A vast majority of the traditional artisans belong to socially and economically backward classes.
Importance of Handicraft Industry
Kerala State Handicrafts Apex Co-operative Society (SURABHI), Handicrafts Development Corporation, and Artisans Development Corporation are the major agencies for the promotion of the handicraft industry in Kerala.
Kerala State Handicrafts Apex Co-operative Society(SURABHI)
SURABHI is the apex organization of primary handicrafts co-operatives established with a view to uplift the artisans by marketing their products and implementing welfare schemes with the assistance from State and Central Governments. There are 46 Co-operative societies under SURABHI. The turnover of the society in 2016-17 was 280.83 lakh. The Apex society received an amount of 255.50 lakh in 2016-17 as assistance from the State Government. This was primarily used for conducting exhibitions and repair works of showrooms. SURABHI made a profit of 1.25 lakh from 11 exhibitions and fairs in the year 2016-17. The total employment provided during the period was 30,000. Details are given in Appendix 3.1.31.
Handicrafts Development Corporation of Kerala (HDCK)
Handicrafts Development Corporation of Kerala (HDCK) is engaged in procuring and marketing handicraft products, and thereby ensuring fair returns to artisans. The show rooms of HDCK include Sree Moolam Shashtyabdapurthi Memorial Institute (SMSMI) in Thiruvananthapuram and Kairali emporia spread all over India. At present it is having a network of 19 such sales emporia other than SMSMI. Moreover with the support of Government of India, HDCK has been implementing welfare schemes for artisans and also conducting of exhibitions/craft bazars at important places and tourist centres.
HDCK has been running a Common Facility Service Centre (CFSC) at Thiruvananthapuram for artisans who engage in development of wood crafts. Establishment of Common Facility Service Centres and Assistance to Apex Organisation in the Handicrafts Sector are the Plan schemes implemented through HDCK in 2017-18. Total turnover of the Corporation in 2016-17 was 1,229.35 lakh. Details are given in Appendix 3.1.32.
The Kerala Artisans Development Corporation (KADCO)
The Kerala Artisans Development Corporation (KADCO) is one among the State agencies providing assistance to artisans for establishing production units, promoting marketing of products and providing employment opportunities through trade fairs and marketing centres.
Bamboo is a highly productive renewable and eco-friendly resource and has several applications. It is widely used in environment protection, as a nutrient food, high-value construction material and in about 1,500 other applications. It is estimated that about 2.5 billion people use bamboo in one form or the other at the global level. Advanced research activities are conducted to utilize bamboo for efficient fuel generating system.
In Kerala, 28 species of bamboo are found. Bamboo from the Kerala forest are being supplied mainly to the pulp and rayon units under concessional rates. It is estimated that there are about one lakh people in the State dependent on bamboo for their livelihood. A unique feature of Kerala is that 67.3 per cent of the extracted bamboo comes from home gardens rather than from the forests. (Source: http://www.keralabamboomission.org).
Kerala State Bamboo Mission
Kerala State Bamboo Mission (KSBM) was constituted in the year 2003 to act as the Bamboo Development Agency (BDA) of the State. The interventions initiated after the formation of KSBM under K-BIP includes promoting cultivation of bamboo, creation of new designs for innovative products in the handicrafts sector along with appropriate skill development, and the promotion of bamboo based modern industries supported by technology adaptation and development.
The major activities of KSBM in 2016-17 were:
The Kerala State Bamboo Corporation
The Kerala State Bamboo Corporation was incorporated in 1971 as a Government of Kerala undertaking to promote the welfare of the traditional bamboo workers in the State. The main objective of the Corporation is to develop and promote industries based on bamboo, reed, cane and ratton, and to undertake manufacture and trading of the above products, provide financial, technical and other assistance and guidance to the traditional bamboo workers. The Corporation is serving about 10,000 bamboo workers families of Kerala with a low capital base of 900 lakh. Majority of the workers are living Below the Poverty Line (BPL) and belong to socially and economically backward, SC/ST Communities.
The main activities of the Corporation are to generate employment and means of livelihood to the traditional bamboo workers attached to the Corporation. The Corporation collects good quality reeds from the Government Forest land and distributes the reeds to the traditional bamboo weavers of the Corporation on a subsidized rate on credit basis. It then procure the woven mats from the weavers. The main products of the Corporation are Bamboo Mats, Bamboo Ply, Flattened Bamboo Boards, Bamboo Flooring Tile, Bamboo Furniture etc.
Problems and Issues in the sector
The government, whose role has changed to a facilitator rather than a provider, should intensify its interventions in creating adequate infrastructure, creating appropriate climate to attract private investment, technical upgradation, diversification and modernisation etc. for the revival and strengthening of the sector.
The Indian textile industry plays a significant role in the economic growth of the country through its contribution to industrial output, employment generation, and export earnings. The growth and all-round development of this industry has a direct bearing on the improvement of the economy.
Handloom, Powerloom and Mill Sectors
In India, handloom weaving is one of the largest economic activities after agriculture, providing direct and indirect employment to more than 43 lakh weavers and allied workers. This sector contributes nearly 15 per cent of the cloth production in the country and also contributes to the export earnings of the country. In fact, 95 per cent of the world’s hand woven fabric is produced in India. The textile industry contributes to 10 per cent of manufacturing production, 2 per cent of India’s GDP and 13 per cent of the country’s export earnings. (Source: Annual report 2016-17, Ministry of Textiles)
The powerloom sector is one of the most important segments of the textile industry in terms of fabric production and employment generation. It provides employment to 64.36 lakh persons and contributes 60 per cent of total cloth production in the country.
The organised textile sector has more than 3400 textile mills both in the small scale industry and non-small scale industry sectors. The mill sector produces nearly 2,500 million square million kgs of man-made fibre and man-made yarn. The share of Kerala in the national handloom industry remains relatively small. (Source: Annual report 2016-17, Ministry of Textiles).
Among traditional industries of Kerala, handloom sector stands second only to the coir sector in providing employment. Kerala’s textile industry comprises traditional handloom sector, power loom and the spinning sector. The handloom industry in the State is mainly concentrated in Thiruvananthapuram and Kannur District and in some parts of Kozhikode, Palakkad, Thrissur, Ernakulam, Kollam and Kasaragod Districts. The industry is dominated by the co-operative sector, covering 96 per cent of total looms. The remaining 4 per cent of handloom units are owned by industrial entrepreneurs.
The major varieties of products produced in the handloom sector of the State are dhothis, furnishing material, bed sheets, shirting, saree and lungi. Considering the traditional value and heritage, the following products of the State are registered under the Geo Indication Act of India.
Directorate of Handlooms and Textiles and Agencies in Handloom Sector
The Directorate of Handlooms and Textiles, Kerala, which is functioning under the Department of Industries and Commerce, aims at evolving polices for the promotion and development of handloom and textile sector in the State. The Director heads the office and also acts as the functional registrar of Apex Co-operative Weavers’ Society and Co-operative Spinning Mills in the State.
Kerala State Handloom Weaver's Co-operative Society (Hantex)
Kerala State Handloom Weaver's Co-operative Society (Hantex) was registered in 1961 under the Kerala Co-operative Society Act of 1961. Hantex is the apex body of handloom co-operatives established for distribution of required inputs to primary co-operative societies. It is involved in procurement, processing, marketing of goods, processing of high quality yarn and raw materials for societies,exploring new business opportunities, and promoting handloom products through exports. Currently, Hantex comprises 518 primary co-operative societies as members. Out of this, 350 are engaged in production and procurement processes with most modern infrastructure to produce hand crafted fabrics, garments, furnishings, made-ups, sarees and traditional wears in tune and harmony with eco friendly norms for internal and export market. Currently, there are 92 sales outlets in Kerala. The accumulated loss of Hantex decreased from 1,998.48 lakh in 2015-16 to 1,837.87 lakh in 2016-17. Details of Hantex are given in Appendix 3.1.33.
The co-operative sector consists of factory type and cottage type societies. The number of registered Primary Handloom Weavers Co-operative Societies in the State as on September, 2017 is 625 as against 600 in March 2016. Of this, 185 are factory type and 440 are Cottage type societies. Of these 625 societies, 409 are in working condition as on September 2017. The number of factory type co-operative societies functioning at present is 99 (24.2 per cent) and cottage type societies is 310 (75.8 per cent). Details are given in Appendix 3.1.34.
Kerala State Handloom Development Corporation (Hanveev)
Hanveev, which started functioning in 1968, is another agency for the upliftment of traditional handloom weavers in the unorganized sector. Its registered office is at Kannur. It is engaged in the manufacturing and marketing of wide range of handloom products. At present, Corporation has 49 own showrooms, 7 exclusive agency showrooms and 32 production centres. Details of Hanveev are given in Appendices 3.1.35 and 3.1.36. In 2016-17 (provisional), Hanveev’s sales turnover was 1,558.87 lakh, but it incurred an accumulated loss of 8,277.16 lakh.
Indian Institute of Handloom Technology (IIHT)
IIHT, Government of Kerala, is the nodal agency in the State for providing technological inputs to the handloom sector. The Institute was established and registered under the Societies Registration Act of 1860 in the year 1987 in the name of Institute of Handloom and Textile Technology (IHTT). Now the Institute of Handloom and Textile Technology, is amalgamated to the Indian Institute of Handloom Technology, which is working on the guidelines of the Ministry of Textiles and Government of India.
Performance of the Handloom sector
The total Plan outlay and expenditure for the handloom sector during the 12th Five-Year Plan period (2012-17) was 349.9 crore and 404.4 crore (115.6 per cent) respectively. The total outlay provided in the Annual Plan 2017-18 for the sector is 71.9 crore and the expenditure up to October 2017 was 9.6 crore (13.3 per cent). Outlay and expenditure for major schemes in 12th Five-Year Plan (2012-17) and Annual Plan 2017-18 are given in Table 3.1.8.
|Sl. No||Schemes||12th Five-Year Plan||Annual Plan 2017-18|
|Plan Outlay||Plan Expenditure||per cent||Plan Outlay||Plan Expenditure||per cent|
|1||Modernisation of Handloom co-operative societies and promotion of value added products||49.0||33.0||67.3||10.0||0.22||2.2|
|2||Training and skill development programme||13.5||12.8||95.0||2.3||0.34||15.0|
|3||Capital support schemes||50.2||48.6||96.8||9.1||4.5||49.0|
|4||Incentive and welfare Schemes||49.3||39.8||81.0||1.1||0.32||29.0|
|5||Marketing and trade promotion scheme||14.9||12.5||84.0||4.0||0.59||15.0|
|Source : Budget 2012-13 to 2016-17, State Planning Board and Planspace|
Physical Analysis of Major Schemes in the Handloom Sector, 2016-17
Overall performance of Handloom Industry in Kerala
Government assistance extended for the development of handloom industry was 74.31 lakh as loan and 565.00 lakh as grant in 2016-17. The details are shown in Appendix 3.1.37. The total value of production in the handloom sector showed a decrease of 31 per cent from 339.25 crore in 2015-16 to 233.58 crore in 2016-17. The total number of weavers employed declined by 4 per cent, from 20,135 in 2015-16 to 19321 in 2016-17. The number of women employed decreased from 15,093 in 2015-16 to 13,780 in 2016-17. The total employment generated in the sector also decreased from 67.37 lakh man days in 2015-16 to 65.34 lakh man days in 2016-17. Total turnover for the handloom industry in 2016-17 was 78.94 crore, which includes money, man, and material costs. The average wage rate prevailing in the industry ranges between 150 to 200 per day, which is very meagre. Details regarding production in handloom industry in Kerala are given in Appendix 3.1.38 and in Figure 3.1.8 and Figure 3.1.9 shows employment generated (lakh man days) in the handloom sector.
There was a steady increase in production and value of production in the handloom sector from 2012-13 to 2015-16, and a decline in 2016-17. The employment generated in this sector was relatively high in 2012-13 and 2013-14, but declined considerably in the next three years.
The challenges faced by the handloom sector include the shortage of workers mainly due to low wages in this sector, low productivity, lack of technological interventions, competition from power looms and competition from textile units from other states. Other issues include the lack of product diversification in accordance with new trends, shortage of working capital and fluctuations in prices of hank yarn and cotton. The strengths of the handloom sector are in its ability to produce intricate woven fabric, its versatility and wide variety, diverse design base and ability to switch to new designs. Workers in the handloom sector have specific skills. The sector makes use of eco-friendly technologies and processes.
Textile Sector – Spinning and Weaving Mills
The textile industry in Kerala is organized into public sector units, co-operatives, and units that are jointly owned by public and co-operative sectors. There are 17 spinning mills functioning in the public/co-operative sector under the State Government.
Kerala State Textile Corporation Limited (KSTC)
KSTC, a Government of Kerala undertaking, was incorporated in 1972 with the main objective of setting up and running textile mills in the State. The Corporation has four mills and one research and testing centre. Mills under KSTC are, Prabhuram mills, Kottayam Textiles, Edarikkode Textiles, and Malabar Spinning and Weaving Mills. Two other units, Sitaram Textiles and Trivandrum Spinning Mills Limited are now under the administrative control of KSTC. In addition to the above, Corporation has under its fold a research and testing division (CARDT- Centre for Applied Research and Development in Textiles), located at Balaramapuram (Thiruvananthapuram).
Kerala State Co-operative Textile Federation Limited (TEXFED)
TEXFED was established in 1992 as a body to plan, assist and supervise the setting up and management of co-operative textile units in Kerala. TEXFED is the apex body of Co-operative Spinning Mills and Integrated Power loom Co-operative Societies in the State. It integrates all the segments of the textile industry including spinning, weaving, processing and garmenting. There are seven co-operative spinning mills as members of TEXFED. Five of them are administered by the State government and two by elected boards.
Mills involved in spinning and weaving in Kerala have been facing problems of both demand and supply. Out-dated machinery, stiff competition, high cost of raw material, low productivity, decreasing profits and lack of working capital are also issues of concern for the textile sector in Kerala. A majority of textile spinning mills in the State are over 25 years old and they use obsolete technologies and equipment. Partial modernization was attempted incertain units, but it was not at par with the industry standards.
Modernisation of Co-operative Spinning Mills
The State Government has taken steps to revive the co-operative spinning mills in Kerala. Assistance was provided for upgrading existing machinery and improving technology in the following units: K. Karunakaran Memorial Spinning Mill at Mala, Priyadarsini Co-operative Spinning Mill (Prico Mills), and Malabar Co-operative Spinning Mills.
During the 12th Five-Year Plan, an amount of 93.4 crore was provided for spinning mills in the co-operative sector, and expenditure incurred was 179.2 crore. The outlay provided for spinning mills under co-operative sector in Annual Plan 2017-18 is 27.00 crore. These spinning mills are currently facing a crisis due to high cotton prices and low realisation from the sale of yarn, leading to huge loss. This erodes the available working capital support given by Government in every year leading to reduction of capacity utilization for want of raw material. Hence concrete measures are required to strengthen these mills to overcome the crisis.
The weaving sector is relatively less developed in Kerala, especially given the production capacity of the yarn sector in the State. To promote the weaving sector, government provided budgetary support to set up four integrated power loom co-operative societies in the State. Currently there are 32 power loom co-operative societies in the State. The co-operative sector owns 545 looms out of a total of 637 power looms in the State. Total value of production in the powerloom industry in 2016-17 was 19.0 crore and productivity was 7,022.0 metre/loom. Total turn over in the period was 827.3 crore. The year-wise details of production and productivity under power loom industry for the period from 2012-13 to 2016-17 are given in Appendix 3.1.39. Outlay and expenditure for major schemes in power loom sector during the 12th Five-Year Plan and Annual Plan 2017-18 is shown in Table 3.1.9.
|Sl. No||Schemes||12th Five-Year Plan||Annual Plan 2017-18|
|Plan Outlay||Plan Expenditure||per cent||Plan Outlay||Plan Expenditure||per cent|
|1||Development of Powerloom Industry||4.3||3.0||69.4||1.4||.0002||0.01|
|2||Modernisation of Powerlooms||201.4||16.8||82.4||3.5||.06||1.7|
|Source : Budget 2012-13 to 2016-17, State Planning Board and Planspace|
Problems related to marketing and lack of finance, raw material, technological upgradation, fabric processing facilities, awareness among the weavers about the facilities are some of the problems faced by the powerloom industry.
Several measures are needed to modernize the textile sector. Technology needs to be upgraded to ensure improvements in product quality and productivity. The sector should make use of the possibilities of information technology to improve the production and marketing of value added products in national and international markets. To improve the productivity of weavers, productivity linked incentives may be provided. With modernisation/mechanisation and value addition, wages in the sector may improve, which will prevent the exit of workers from this sector. As part of the handloom innovation programme, production of organic cloth with "Made in Kerala" branding can be promoted. Showcasing the rich traditions of the handloom sector will promote other sectors like tourism also.
Khadi and Village Industries Sector in India
Khadi and village industries have the potential to create employment for rural artisans with a very low capital investment. Khadi and Village Industries Commission (KVIC), Government of India is a statutory organization tasked with the role of promoting the production and sale of Khadi. At the national level, over 12 lakh people are engaged in production activities under KVIC, a majority of which (over 70 per cent) are women. Khadi production and sales have grown consistently over the past five years in India, from production of 811.0 crore in 2013-14 to 1,066.0 crore in 2015-16. Similarly, sales of Khadi have shown growth from 1,081.0 crore in 2013-14 to 1,510.0 crore in 2015-16. Total employment provided by Khadi industries in India was 11.1 lakh as of 2015-16. In 2016-17, Khadi and Village Industries (KVIC) have provided cumulative employment to 130.7 lakh persons and produced goods worth 34,211.6 crore at the national level (Source: Annual Report 2016-17, Ministry of Micro, Small and Medium Enterprises, Government of India).
Kerala’s share in production, sales and employment in India has been smaller than Kerala’s share in India’s population (Table 3.1.10).
|Year||Production (crore)||State's Share||Sales (crore)||State’s Share||Cumulative Employment
(in lakh mandays)
|National||Kerala||Per cent||National||Kerala||Per cent||National||Kerala||Per cent|
|Source: Annual Report 2016-17, Ministry of Micro, Small and Medium Enterprises, Government of India &Khadi and Village Industries Board, Kerala *Provisional ** Figures from Khadi and Village Industries Board, Kerala|
Kerala Khadi and Village Industries Board
The Khadi and Village Industries Board is a statutory body vested with the responsibility of organizing, developing and promoting khadi and village industries in Kerala. In 2016-17, fully owned units of Khadi and Village Industry Board in Kerala produced goods valued at 171.7 crore.
Total employment in Khadi and Village Industries in Kerala declined from 1.3 lakh in 2011-12 to 1.1 lakh in 2015-16. Production increased during the period but sales of the sector within the State showed a downward trend. A major reason for decline in the number of workers engaged in the sector in Kerala is the migration of workers to better paying jobs in other sectors or for higher education. Non-availability of sufficient raw-material for large-scale production, boom in the growth of the power looms industry in the country, shift in the nature of demand for clothing and the use of low productivity charkhas, looms and other accessories are the other major reason for the poor performance of this sector.
The allocation of funds from various sources to Khadi and Village Industries Board and the expenditure incurred by the Khadi and Village Industries Board in 2015-16 and 2016-17 are shown in Table 3.1.11.
|State Government Grant – PLAN
1. Administrative Expenses (Budget provision)
2. Income Support Scheme (Fund through DIC)
|State Government Grant – NON-PLAN
1.Non- Plan – Administrative Expenses
2.Non- Plan - Special Rebate
PMEGP - Margin Money Grant
Grant for District Awareness Camps and District Level Exhibition of PMEGP
Grant for stationery, Publicity, TA, Expense for the Scheme PMEGP
|Source: Khadi and Village Industries Board, GOK.|
Plan Outlay and Expenditure during 12th Five-Year Plan
The outlay provided for the sector during 12th Five year Plan is 6,735.2 lakh and the expenditure is 6,236.2 lakh. The Plan expenditure was higher than Plan outlay in 2012-13 and 2013-14 periods. However, in 2014-15 the expenditure was only 24 per cent against the outlay of 1,397.6 lakh. This was because of the delay in release of funds by the Government. In 2015-16 and 2016-17, expenditure increased to 80 per cent and 72 per cent respectively of Plan outlays. The financial details during 12th Five-Year Plan are given in Table 3.1.12.
|Source: Budget 2012-13 to 2015-16, Accounts and Planspace|
The outlay provided in the Annual Plan 2017-18, for the sector is 1,691.0 lakh and the expenditure up to October 30, 2017 is 488.6 lakh (28.9 per cent). The number of schemes implemented in the sector is 11, which include a new scheme ‘Khadi Gramam Programme. This programme aims at providing 3,000 charkhas and 2,000 looms at household levels to provide employment to 5,000 people in five years. The scheme-wise details of outlay and expenditure are provided in Appendix 3.1.40.
Some of the major schemes implemented by Khadi and Village Industries Board in Kerala are the following:
Expansion and Modernisation of Silver Project at Etukudukka in Kannur District
The scheme intends to enhance the production of sliver products by developing the existing sliver project at Etukudukka in Kannur District. It aims to supply quality sliver at affordable price required for the spinners in the departmental production centres. The scheme includes purchase of machinery, procurement of raw materials and provision of infrastructure facilities, etc.
Production/Festival Incentives to Khadi Spinners and Weavers
The scheme aims to provide production incentives to spinners and weavers in the Khadi sector. In addition to this, festival allowance is also given to khadi artisans during Onam season.
Establishment and Strengthening of Departmental Village Industries Units
The scheme is intended to strengthen the activities of handmade paper unit, studio pottery unit, oil units and readymade garments units.
Special Employment Generation Programme
It proposes to provide margin money subsidy to small entrepreneurs and traditional artisans for bank linked projects (based on appraisal of the project by competent authority).
Development of Bee-keeping Industry
This scheme aims to promote bee-keeping activities by supplying bee boxes with colony at subsidized rate to motivate bee keepers. It also imparts training in bee keeping. The scheme also envisages establishing 2 permanent bee keeping centres with a bee nursery in two districts in 2018-19.
Khadi Gramam Programme
This programme aims at providing 3000 charkhas and 2,000 looms at household levels which would create employment opportunities for 5000 people in five years.
Moreover, goods worth 582.0 crore has been produced through the aided units of the K&VI Board and goods worth 596.0 crore has been sold including the closing stock of previous year, thereby providing employment to 1,47,355 persons. It is observed that the productivity per person is much higher in K&VI aided units than in K&VI departmental units. The production, sales and wages paid and employment generated in 2015-16 and 2016-17 is provided in Appendix 3.1.41. District-wise details of departmental sales outlets and sales under K&VI Board for 2015-16 and 2016-17 is provided in Appendix 3.1.42.
The Prime Minister’s Employment Generation Programme (PMEGP) has been launched for generating employment opportunities through establishment of micro enterprises in rural as well as urban areas. Under the scheme, the government subsidy will be distributed to the beneficiaries/entrepreneurs in their bank accounts. The small scale entrepreneurs and traditional labourers, who did not get the benefits under PMEGP, were put under Special Employment Generation Programme (SEGP) scheme, in which financial support has been given to the small scale entrepreneurs and traditional labourers. Khadi and village Industries Board implemented the scheme as “Ente Gramam” in 2016-17. The total project cost for the programme in 2016-17 was 556.0 lakh. The programme helped the creation of 245 units and generation of employment for 737 people. The details of district-wise achievement under self-employment generation programme for the year 2016-17 are provided in Appendix 3.1.43.
Technology and Value Addition
Readymade garments are produced using Khadi cloth. Khadi industry employs traditional technology. The Board aims to improve the production capacity of its existing facilities with the assistance of IIT Madras. The Board proposes to create 10,000 new employment opportunities in the Khadi sector during the 13th Five-Year Plan period.
The Board has 209 sales outlets for Khadi and Village Industries goods. (42 Khadi Grama Soubhagya, 51 Khadi Soubhagya, 116 Grama Soubhagya (GS Depot) and 3 mobile sales van). The Board has conducted Onam Melas in 2016. Sales through Onam Mela 2016 were 30.4 crore against the target for 27 crore. The State level Onam Melas 2017 was held at Thiruvananthapuram and the sales target was 36.5 crore. District-wise sales achievements for the year 2016-17 (Up to March 31, 2017) are given in Appendix 3.1.44.
Constraints and Strategies of Khadi and Village Industry
As already noted, a major challenge for the Khadi& Village Industries sector in Kerala is the migration of its workers to more attractive and remunerative opportunities in other sectors. Other causes for the stagnancy prevailing in this sector are, surplus stock of unsold Khadi, shortfall in availing credits and loan from banks, lack of adoption of new marketing techniques, lack of product innovation, low quality of products and high cost of production. Effective steps will be taken for the extension of marketing facilities and strengthening of research and development through other support institutions.
The Board will take effective steps to promote entrepreneurship and employment creation in the Khadi and Village industries sector, encourage mechanization in the pre-processing stages, and implement welfare measure for the workers in this sector.
India is the largest producer of coir in the world, accounting for more than 80 per cent of the production of coir fibre globally. Coir and coir products have been exported to 116 countries including China, USA, Netherlands, South Korea and Spain etc. Coir industry first emerged in Kerala in the 19th century. The State’s long coast line, lakes, lagoons and backwaters provided natural condition required for retting, an important part in coir processing. With the expansion of coconut cultivation, coir industry has picked up in Tamil Nadu, Karnataka, Andhra Pradesh, Orissa, West Bengal, Maharashtra, Assam and Tripura.
Kerala accounts for major portion of the total production of coir in the country. The coir industry comprises four sectors. They are: retting and fibre extraction sector, spinning sector, manufacturing sector and export sector. This agro-based rural industry provides sustenance to around 2 lakh families in the coastal belt of Kerala. There are estimates which suggest that 3.75 lakh persons are employed in this industry (both in co-operative and private sector) in the State, and 80 per cent of all workers are women. (Source: Directorate of Coir Development Department).
The co- operative sector plays a major role in the coir industry in Kerala. The private sector too has a large presence in the industry as, coir yarn producers, product manufacturers and exporters.
Directorate of Coir Development and Agencies in Coir Sector
The activities and programmes of the coir sector in Kerala are co-ordinated by Directorate of Coir Development, Government of Kerala. The Directorate also acts as a facilitator for the promotion of the coir industry in the State. Kerala State Co-operative Coir Marketing Federation (COIRFED), Kerala State Coir Corporation Ltd (KSCC), Foam Mattings India Limited (FOMIL), National Coir Research and Management Institute (NCRMI), Central Coir Research Institute and Coir Board are the other important institutions for the promotion of coir industry. Coir Board with its head office at Kochi, Kerala is the arm of the Central Government for development and promotion of Coir Industry.
The Kerala State Co-operative Coir Marketing Federation (Coirfed)
Coirfed is the apex federation of primary coir co-operative societies spread all over Kerala. It is entrusted with the task of procuring products from co-operative societies and marketing them. At present Coirfed has two factories engaged in the manufacture of value added products – one producing rubberized coir products and the other rubber backed coir mats. Coirfed has four defibering units.
Co-operatives in Coir Sector
Coir co-operative societies play substantial role in collecting husk, defibring and producing varieties of coir products in Kerala. There are 1,001 co-operatives registered in the coir sector as on March 31st 2017. As per the report of the Coir Directorate, number of registered societies decreased by 7 in 2016-17. But the number of working societies increased from 544 to 564. Details of the societies are shown in Appendix 3.1.45.
Kerala State Coir Corporation (KSCC)
KSCC was set up in 1969 for the systematic development of coir industry in the State. It caters to the needs of the small scale coir manufacturers by providing them facilities for manufacturing and marketing. It’s diversified operations include curled coir manufacturing and allied products sectors. KSCC has been implementing the Purchase Price Stabilization (PPS) scheme in the coir sector. Under the scheme, the KSCC directly procures coir products from small scale producers, mats and mattings co-operatives and alike thereby avoiding middle men. The value of export by the corporation has increased from 8.14 crore in 2015-16 to 10.16 crore in 2016-17.
Foam Mattings India Ltd. (FOMIL)
FOMIL was established in 1979 to help the development of value-added coir products. It has emphasised the use of technology and machinery in coir industry. The company started a modern dye house in 2000 mainly to support the needs of exporters and powerloom. The value of exports from FOMIL was 13.05 lakh in 2015-16 and 56.41 lakh in 2016-17.
The National Coir Research and Management Institute (NCRMI)
NCRMI is a State Government institution set up to strengthen the R&D activities in coir sector to enable the industry in producing more value – added products and products with new designs at reasonable cost. Also NCRMI has been conducting studies for the development of new coir technologies in collaboration with similar research organizations across the country and even at the international level.
The Central Coir Research Institute
The Central Coir Research Institute is an important research centre of the Coir Board (Recognised by the Department of Science and Technology, Government of India), which was established in 1959. It implements all the S and T programs for the development of the Coir Industry, at Kalavoor, Alappuzha.
Kerala State Coir Machinery Manufacturing Company Ltd.(KSCMMC) Alappuzha
KSCMMC has been set up in Alappuzha to provide machineries needed in coir sector in Kerala and the company was commissioned in February 2014.
The main aim behind the setting up of KSCMMC is the speedy mechanisation in coir sector in Kerala by providing electronic ratts, automated spinning machines, defibering machine, willowing machine and allied machines required for the coir industry.
Performance of Coir sector in Kerala
The total Plan outlay and expenditure for the coir sector during 12th Five-Year Plan period (2012-17) was 562.95 crore and 448.6 crore (79.7 per cent) respectively. The total outlay provided in the Annual Plan 2017-18 for the sector is 128.1 crore and the expenditure up to October 2017 is 14.1crore (10.9 per cent). Outlay and expenditure for major schemes during 12th Five-Year Plan (2012-17) and Annual Plan 2017-18 are given in Table 3.1.13.
|Sl. No||Schemes||12th Five-Year Plan||Annual Plan 2017-18|
|Outlay||Expenditure||Per cent||Outlay||Expenditure||Per cent|
|1||Mechanization and Infrastructure Development of Coir Industry||325.4||162.7||50.0||45.0||1.3||2.8|
|2||Marketing, Publicity, Propaganda Trade Exhibitions and Assistance for Setting up of Showrooms||33.5||28.7||85.7||8.8||0.03||0.3|
|3||Price Fluctuation Fund intended to stabilize the price of coir fibre, and yarn||95.0||148.9||156.7||48.7||2.6||5.3|
|4||Coir Geo Textiles Development Programme||1.5||5.0||333.0||0.30||.15||50.0|
|5||Production and Marketing Incentive scheme||20.0||23.9||119.5||5.5||5.4||98.2|
|6||Market Development Assistance for the Sale of Coir and Coir Products||30.0||30.0||100.0||8.8||3.3||37.5|
Physical Analysis of Major schemes implemented by Directorate of Coir Development in 2016-17
Procurement of Husk and Production of Yarn and Fibre in Co-operative sector
In 2016-17, coir co-operatives in Kerala procured 1.13 crore quantity of husk by spending an amount of 1.42 crore, purchased 11,745.08 tonnes of fibre at a cost of 22.34 crore and produced 10,740.06 tonnes of coir yarn worth 42.96 crore. In 2016-17, there were 436 coir co-operative societies in Kerala in the production of coir yarn and 93 co-operative societies in the coir products sector. Total wages paid in the coir yarn sector and coir products sector were 28.94 crore and 7.53 crore respectively. It is clear that actual wages paid to each worker in the coir sector is very meagre. Details of activities of coir co-operative societies for the last 6 years are shown in Appendix 3.1.46.
Export of Coir and Coir Products
The export of coir and coir products from India in quantity in 2016-17 was 9,57,045 MT valued at 2,281.65 crore against 7,52,020 MT valued at 1,901.43 crore in the previous year. Exports of coir and coir products recorded an overall increase of 27.3 per cent in quantity and 20 per cent in value over the export of previous year. Coir pith, coir fibre, curled coir, coir rugs, coir rope, coir yarn, coir geo-textiles, handloom mats, handloom matting, power loom Mats and rubberized coir constitutes the major export items of the industry in 2016-17. The details of export of coir and coir products during last 5 years by public sector undertakings/COIRFED in Kerala are given in Appendix 3.1.47 and Figure 3.1.10.
The export of coir and coir products of Public Sector Undertaking in Kerala shows a positive trend from 2012-13 to 2016-17. As compared to the previous years, export shows a hike of about 25 per cent in 2016-17. At national level, growth in production and export of coir and coir products is positive, although has been fluctuating over the years. Figure 3.1.11 provides a comparison of the growth of exports of State PSUs and at the national level.
Mahila Coir Yojana
The Mahila Coir Yojana is the first women oriented self- employment scheme in the coir industry which provides self- employment opportunities to the rural women artisan in regions producing coir fibre. The conversion of coir fibre into yarn on motorized ratt in rural households provides scope for large scale employment, improvement in productivity and quality, better working conditions and higher income to the workers. The scheme envisages distribution of motorised ratts to women artisans in rural households provides scope for large scale employment, improvement in productivity and quality, better working conditions and higher income to the workers.
Coir Udyami Yojana
The Ministry through Coir Board is implementing a Central Sector scheme of Rejuvenation, Modernisation and Technology Upgradation of Coir Industry (REMOT), to facilitate sustainable development of the coir industry in the country. This will in turn generate more employment opportunities especially for women and the weaker sections of people in rural areas.
This scheme aims at all round sustainable development of coir industry through enhanced raw material utilisation, development of skills and employment of rural people, especially women, and marketing the coir products within the country and abroad.
Since coir is natural fibre and ‘return to nature’ is the slogan of the recent times, the industry has a better prospect in future years. The constraints facing the industry include weak procurement of coconut husk, increased cost of production, shortage of coir fibre, pollution in traditional method of ratting and husk beating, competition from synthetic materials, lack of professional management and migration of workers to other areas. These constraints will have to be addressed through innovative, scientific, and cost effective solutions.
India’s cashewnut, the world favourite, is the third widely consumed edible tree nut (Source: www.cashewinfo.com/cashew_facts.html). In 2014, India’s production of raw cashewnut was 7, 37,000 metric tonnes, which accounted for 18 per cent of the total cashew production of 4,092,241 metric tons in the world. India continues to be the largest producer of raw cashew nut in the world. The other main producing countries are Vietnam, Brazil, Tanzania, Ivory Coast Guinea Bissau, Mozambique and Indonesia. According to the estimates by Directorate of Cashew nut and Cocoa Development (DCCD), the production of raw cashew nuts in India in 2016-17 was 779,335 MT as against the estimated production of 670,000 MT in 2015-16. Production of cashew nut in selected countries, 2011 to 2014 is given in Table 3.1.14 and Shares of selected countries in total cashew nut production in the world is shown in Figure 3.1.12.
|Source: Cashew Export Promotion Council, Kollam|
In India more than 50 per cent of cashew processing is carried out in the unorganised sector. There are nearly 1,800 medium to large and 2,200 on-farm level processing units, engaging mostly women workers. The major centres of cashew processing in India are in the States of Kerala, Karnataka, Goa, Maharashtra(all along the West Coast); Tamil Nadu, Andhra Pradesh, Orissa (all along the East Coast), West Bengal, Chhattisgarh, Gujarat, Jharkhand, and the North Eastern States. At present, the area under cashew is 10.4 lakh ha with a production of 7.8 lakh MT and productivity 753 kg/ha. India needs about 16.00 lakh tons of raw cashewnut to meet the requirements of nearly 1,800 medium to large and 2,200 on farm level processing units. The balance requirement to the tune of 8.9 lakh MT of raw cashew nuts is being met by importing rawnuts from African and South East Asian countries. In 2016-17, India imported 7.7 lakh MT of raw cashew nuts.(Source: DCCD, Kochi).
According to DGCI&S figures (Source: CEPCI, Kollam), cashew kernels exported from India in 2015-16 and 2016-17 were 96,346 MT and 82,302 MT respectively and they were valued at 4,952.1 crore and 5,168.8 crore respectively compared to 2015-16. Exports in 2016-17 decreased by 15 per cent in quantity and increased by 4 per cent in value. The major international markets for cashew kernels processed in India in 2016-17 were United States of America, United Arab Emirates (UAE), Japan, Saudi Arabia, Netherlands, France, Korea Republic of Germany, Belgium, Spain etc. Foreign exchange earnings of India from cashew industry, for the period from 2007-08 to 2016-17 is given in Appendix 3.1.48.
Among the major raw cashew producing states, the production and productivity is the highest in Maharashtra. Majority of plantations in Maharashtra make use of clones of high yielding varieties, adopt good management practices and provide irrigation facilities. According to DCCD figures, as on 2016-17, Kerala ranks 5th in the production of raw cashew nuts. The State wise estimated area and production of cashewnut in India is given in Appendix 3.1.49.
Cashew Industry - Kerala scenario
The cashew industry in Kerala is mainly concentrated in Kollam District. The Central Government recognises Kollam as a “Centre of Cashew Industry”. The industry is highly labour intensive and employs more than 1.5 lakh workers, a majority of them women (above 90 per cent). Thus the industry provides a source of income for a large number of low-income families.
In 2016-17, the export of cashew and cashew kernels through Cochin port was 38,054 mt. Kerala accounts for 11 percentage of cashew production and 35 per cent of all cashew processing units in India.The State needs around 6 lakh mt of raw cashew in a year for catering to its 800 factories. As per the estimates of DCCD, Kochi, the area under cashew in Kerala is 90,870 Ha with a production of 83,980 MT and the productivity is 962 Kg/Ha. (Source: DCCD, Kochi). However, as per statistics of Directorate of Economics and Statistics, the area under cashew in Kerala is 41,660 Ha with a production of 27,944 MT and the productivity is 671 Kg/Ha. In case of Directorate of Cashew Nut and Cocoa Development, Kochi, basic data survey was carried out in 1990 to find out the exact area under cashew. Based on the data arrived in 1990, area expansion by the developmental departments in subsequent years is added to arrive at the current area under cashew. The production data is collected based on research parameters on sample survey basis. The data from both these directorates needs reconciliation.
With respect to production of raw cashewnuts, Kerala had the top rank among Indian states in the early 1990’s, but its position has now dropped to the 5th, behind Maharashtra, Andhra Pradesh, Orissa and Karnataka. Area as well as production of cashew for the period from 2010-11 to 2016-17 are depicted in Figure 3.1.13.
During the 11th Five-Year Plan, the State government allotted an amount of 186.50 crore for the cashew sector and the expenditure incurred in this sector was 179.10 crore (96 per cent).
The overall allocation by government for the cashew sector as part of the State’s 12th Five-Year Plan programmes was 281 crore and expenditures incurred over the Plan period was 261.49 crore (93.06 per cent). Table 3.1.15 provides the Plan outlay and expenditure during 12th Five-Year Plan and Annual Plan (2017-18).
|Departments||12th Five-Year Plan||Annual Plan 2017-18|
|Outlay||Expenditure||%||Outlay||Exp upto 9.10.2017||% (upto 9.10.2017)|
|Source: Accounts and Planspace, State Planning Board|
Agencies in Cashew Processing in Kerala
The Kerala State Cashew Development Corporation (KSCDC) and Kerala State Cashew Workers Apex Co-operative Society (CAPEX) are the two agencies of the State engaged in cashew processing sector in Kerala. The other agencies involved are Kerala State Agency for the Expansion of Cashew Cultivation (KSACC), Cashew Export Promotion Council of India (CEPCI),Directorate of Cashew nut and Cocoa Development.
The Kerala State Cashew Development Corporation (KSCDC)
The Kerala State Cashew Development Corporation (KSCDC) has 30 factories with about 11,000 workers. The Corporation processes raw cashew nuts and produces value added products.The Corporation provided average man days of employment of only 75 days in 2016-17 as against 106 days in 2015-16. The Corporation provided employment to 8,07,675 persons in 2016-17 and to 11,26,992 persons in 2015-16. The total turnover achieved was 8,499 lakh, which is 119.8 per cent higher than turnover of 3,866 lakh in the previous year. The Corporation incurred a loss of 1,944 lakh, which was 18.59 per cent less than the losses made in the previous year (2,388 lakh.) The performance of KSCDC over the last 9 years is given in Appendix 3.1.50. Modernisation of cashew sector and brand building, modernisation and upgradation of facilities and international brand building are the schemes implemented through KSCDC.
Lack of working capital, high raw material costs, high cost of processing rates in Kerala, high proportion of wages to total costs and highly competitive industry (both within India and internationally) are the major challenges faced by KSCDC.
Cashew Workers Apex Co-operative Society (CAPEX)
CAPEX with its headquarters in Kollam is the apex body of cashew workers primary societies. It is engaged in the procurement of raw cashew nuts and marketing of the processed kernels. The main objective of CAPEX is to organize cashew industry in the State on a commercial basis, render assistance to affiliated societies, in procurement and distribution of raw-nuts, make available funds for processing and marketing of kernels and other items produced in the factories of the affiliated societies. CAPEX commenced its commercial activities in the middle of 1985. The society owns 10 factories and one packing centre.
CAPEX provided average days of employment of only 120 days for its workers in 2016-17 as against 203 days in 2015-16. CAPEX has appointed 36 active franchisees all over Kerala and 6 franchisees outside Kerala to market CAPEX branded cashews.In 2016-17, CAPEX provided employment to 4,62,160 persons. The total turnover achieved in 2016-17 was 4,588 lakh, which was 37.76 per cent less than in the previous year of 7,371.5 lakh
Modernization and partial mechanization of cashew factories of CAPEX, brand building and market awareness in India and international market are the schemes implemented through CAPEX.The performance of CAPEX over the years is given in Appendix 3.1.51.
Achievements and Future Strategies
Globally, full mechanization has come into effect in a big way. Vietnam has now become the number one exporter of cashew globally, and India has been pushed to second spot. Still quality and taste of cashew from India is rated as supreme, because of the traditional way of processing. So CAPEX is exploring all the possible avenues to enhance productivity through mechanization without compromising quality. The sale, export and turnover of CAPEX are given in Table 3.1.16.
|Year||Domestic Sales||Export Sales||Total Turnover|
|Source: CAPEX, Kollam|
CAPEX is facing shortage of working capital. Given limited assess to bank finance, it is fully functioning with Plan funds. Another problem is the non receipt of Plan funds in time, which slows down the timely procurement of cashew nuts when seasons are on. The raw nuts are seasonal agricultural product, which are to be procured during the season itself. CAPEX and its workers will benefit from ready availability of good quality of cashew raw materials from national and international market and it will also reduce the losses incurred by CAPEX.
A minimum 13,000 mt of raw nuts is necessary for giving continuous employment to the workers for more than 250 days. Continuous supply of raw nuts should be ensured through dynamic procurement strategies from domestic sources and imports. By providing regular employment to workers, traditional sectors of the industry will get rejuvenated.The effort to generate additional export turnover with better margins including that of retail cashew kernels to boost the image of “CAPEX Cashews” will give a much needed competitive edge and better margin to CAPEX in the global market.
Kerala State Agency for the Expansion of Cashew Cultivation (KSACC)
Kerala State Agency for the Expansion of Cashew Cultivation (KSACC) was constituted by Government of Kerala in 2007. The agency, headquartered at Kollam,was formed to overcome the crisis in domestic production of cashew nuts which is largely due to reduction in of area under cashew cultivation in the State. The vision of the agency is to increase the domestic annual raw nut production from 65,000 mt to 150,000 mt in a phased manner through promotion of high yielding cashew grafts and a steady supply of RCN to the industry in Kerala. Since 2008, KSACC has been organizing promotional activities in cashew cultivation and distributing cashew grafts of high yielding varieties and financial assistance to farmers and institutions in the State. The agency has started the project ‘Cultivation of Organic Cashew and Establishment of Raw Nut Bank’ from 2007-08. The main objectives of the project are to enhance production and productivity of cashew by adopting modern technology and high yielding grafts. Accordingly, an additional 33,400 ha has been brought under the canopy of the project by KSACC during the period 2008-09 to 2017-18.
KSACC is the nodal agency for the cashew cultivation activities in Kerala, approved by National Horticulture Mission, Government of India. In the current financial year (30th August, 2017), agency distributed 80,000 nos of grafts (400 Ha approx.) to farmers/plantation under cultivation programme.
Cashew Export Promotion Council of India (CEPCI)
Cashew Export Promotion Council of India (CEPCI), GOI, was established at Kollam, with the object of promoting exports of cashew kernels and cashewnut shell liquid from India. The council operates Plan schemes of GOI, and offers various services to its member exporters. The council has set up a Laboratory and Technical Division of international standards which is recognised as an approved research centre for doctoral research by Kannur University and University of Kerala. The service of CEPC Lab is available to cashew industry as well as entire food processing industry in India and abroad. This Laboratory successfully established a laboratory quality system as per the standard described under ISO-IEC Guide 25 and the same has been accredited by the National Board for Accreditation of Testing and Calibration Laboratories (NABL) under the Department of Science and Technology, GOI.
Constraints in the Cashew Sector
The Cashew Industry in Kerala is operating under multiple constraints like paucity and high cost of raw materials (raw cashew nuts); high operating costs (wages) and a very competitive market for its finished goods (cashew kernels). Kerala, which used to be a dominant player in India and the world, has now fallen behind in cashew cultivation and cashew kernels production. Other states like Maharashtra, Orissa, Andhra Pradesh have taken over as leaders on raw cashew cultivation. These states have also entered into cashew processing in a big way through mechanical processing. Internationally, the African nations are dominant in raw cashew exports and Vietnam is the dominant cashew kernel exporter. The primary issue faced is the paucity and high costs of raw cashew nuts. This is due to lack of initiatives in increasing the cultivation of raw cashew nut in Kerala, which has resulted in the industry depending heavily on imports. Wage rates, welfare, safety and healthy working environment of the workers are also to be addressed. Also the problems like supply-demand imbalance, huge mechanization cost in processing sector and environmental issues are to be tackled, for the sustainable economic development of cashew sector in the State.
In the light of escalating demand for cashew, serious attention is needed to identify the gaps and reorient research and development programmes in the area of cashew cultivation in the State. This is essential to attain self-sufficiency in raw cashew nut production. The State needs to take necessary steps to improve productivity, cultivation practices, loan facilities, warehousing facilities and food safety standards in the cashew processing sector. There is also a need for acomprehensive survey to understand the issues in cashew units, so as to re-focus research and development. Emphasis should be on employment generation with reasonable wage rate, research and development for the development of cashew production, processing, human resources, marketing strategies and development of new value added products of cashew including hand crafted cashew and utilization of cashew apples. Such measures will ensure greater value of Kerala cashew at the domestic and global markets.
To tackle various problems faced by the Cashew Industry in the State, a private Ltd Company was formed with an equity contribution of 49 per cent by Government and balance 51 per cent by KSCDC, CAPEX and similar other agencies and individuals as a special purpose vehicle. The main objectives of the Company are