In the tribal villages of Andhra Pradesh’s Anakapalle district, cashew farmers belonging to Particularly Vulnerable Tribal Groups (PVTGs) are grappling with a recurring problem. They are frequently forced to sell their produce to non-tribal middlemen at arbitrary, inadequate prices, as there is no Minimum Support Price (MSP) or regulated procurement system in place. Despite keenly promoting cashew farming in these villages for decades, farmers say the government has failed to intervene to ensure that they are adequately paid for the produce. Cashew farmers across the country have been urging the Union government to fix the MSP of raw cashew nuts for years. While farmers’ groups in north Andhra Pradesh are currently seeking an MSP of about Rs 200 per kg, in Narsipatnam, they are currently forced to sell the cashews for Rs 100-130 per kg.
With the exploitative middlemen also often doubling as moneylenders, farmers say that they are being pushed into huge debt. In some cases, tribal farmers even risk losing their farmlands pledged as collateral, despite some of these lands being protected under the Andhra Pradesh Assigned Lands (Prohibition of Transfers) Act, 1977, and the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 (RoFR).
The absence of MSP and the unregulated procurement process have given rise to wide price fluctuations, leaving the farmers vulnerable to exploitation by the moneylenders who operate without official registration or licenses. Speaking to TNM, K Mosuru Raju (35), a cashew farmer from Cheemalapadu mandal belonging to the Kondadora tribe, said, “We sold a bag of cashews weighing 82 kg (including kernels) for Rs 11,000 (Rs 134 per kg) last year, but this year, we are compelled to accept a meagre sum of Rs 8,00 (Rs 100 per kg).” Such disparities in pricing reflect the unscrupulous practices of middlemen.
According to M Venkateshwarlu, Additional Director of the Andhra Pradesh horticulture department, cashew cultivation in the region was promoted since the 1980s by organisations such as the Union government’s National Bank of Agriculture and Rural Development (NABARD) and the state government’s Integrated Tribal Development Agency (ITDA) due to favourable soil conditions in hilly areas, as part of afforestation efforts. To date, the horticulture department provides free or subsidised saplings to cashew farmers.
Farmers too embraced cashew cultivation due to low investment requirements as it is a rain-fed crop that can yield harvests for several years. The investment needed per acre is about Rs 15,000 to Rs 20,000 each year, which the farmers usually borrow from the middlemen who are also the local moneylenders in these villages.
The exploitative practices of the middlemen extend beyond pricing issues, as they often act as loan sharks, taking advantage of the farmers' vulnerability and charging exorbitant interest rates. P Ajay Kumar, national secretary of the All India Agricultural and Rural Labour Association, highlighted cases where moneylenders heavily inflated the debt of tribal farmers, sometimes leading to the loss of their lands. After the plight of Gangamma, a resident of Ruchupanukula village in Ravikamatham mandal, was brought to light by BBC Telugu earlier in May, revenue officials intervened to get her debt waived and her land returned from the control of the moneylender, Gali Sanjeeva Rao.
“The middlemen are readily available to give out high-interest loans, in order to seize tribal people's lands,” Ajay alleged. “There are 35 Kondadora tribal families living in the village of Ruchupanukula. The moneylenders used false compound interest calculations to unfairly inflate the debt owed by around 30 tribal farmers. They also acquired 11 acres of land from three of them.”
According to BBC Telugu, Gangamma borrowed Rs 2 lakh from the local middleman cum moneylender Sanjeeva Rao at 2% monthly interest for the construction of a house under the state government’s housing scheme in 2019. Last year, the moneylender claimed that the loan amount with interest had gone up to Rs 7.5 lakh and took away the land documents related to two acres of D-Form patta land Gangamma owns. These are government-assigned lands meant for the poor and hence not transferable, as per the AP Assigned Lands Act.
The family members were asked to sign lease documents for a period of 99 years. Gangamma was not only unable to complete her house construction but also lost her land. The family alleged that they were not allowed to use or even see the land as the middleman employed other farm workers after taking over the land, and also staked ownership of the produce. Gangamma and family members were forced to work as farm labourers in others’ farmlands.
After Gangamma's case was resolved, Ajay and other activists undertook an awareness rally on June 24 in a few villages, asking tribal farmers to come forward to share their grievances. In one case the same moneylender, Sanjeeeva Rao, had allegedly grabbed seven acres of land from a farmer over non-repayment of a Rs 60,000 loan, in Rayapadu village of Cheemalapadu panchayat. The activists intervened and helped her get her land back.
Ravikamatham Mandal Revenue Officer (MRO) Umamaheswara Rao said that he took action in Gangamma’s case based on news reports and ensured that her land was returned. “We inquired into six complaints of such cases of forceful occupation of land within the span of a week, and ensured that the land was returned to the tribal complainants,” he said.
According to Anakapalle district horticulture department officer Prabhakar Rao, nearly 27,600 hectares of farmland are being cultivated with cashews in the district, yielding about 23,000 metric tonnes of produce every year. About 3,000 hectares of this is protected either under the Assigned Lands Act or RoFR Act, he said.
“The middlemen lend money to the tribespeople because they are eyeing their lands. They accept cashew produce as a form of repayment, which will never be enough to repay the loan along with compounded interest. This way, people get stuck in a vicious debt cycle and risk losing their lands,” said K Govind Rao, a tribal activist from Narsipatnam.
Govind Rao is also the district president of the Girijana Sangam Fifth Schedule Sadhana Committee which seeks the inclusion of several tribal-dominated villages into the state’s Scheduled Area, so they can benefit from special protective measures under the Fifth Schedule of the Constitution. He believes the long-pending demand would help protect tribal lands.
In the absence of a proper procurement system, cashew farmers are left at the mercy of middlemen, who allegedly employ various tactics to cheat them. “Farmers often find themselves short-changed when middlemen claim that their bags of cashews weigh less than the standard 82 kg. Additionally, middlemen prevent other buyers from entering the market, thus stifling competition and keeping prices low. Climate conditions such as unseasonal rains or pests are disregarded, further exacerbating the challenges faced by the farmers,” said Govind Rao.
Cashew is usually harvested after winter, in the month of February. In the hilly areas, the crop is prone to pests due to fog and mist, which reduces the market price of the yield. Hence, farmers demand an MSP (of about Rs 200 per kg of raw cashew) for their produce. Once the raw cashew is processed, its price varies depending on its quality. There are various grades of processed cashew nuts (depending on the shape, size and colour of the nuts), with high-quality cashew fetching as much as Rs 700-800 per kg. An 82 kg bag of raw cashew yields about 22 to 25 kg of cashew nuts after processing.
In 2021-2022, Andhra Pradesh was the nation's second-largest producer of cashew nuts after Maharashtra, accounting for 16.44% of the market share. Yet, despite decades of the government promoting cashew cultivation, there is no reliable mechanism in place to procure cashews effectively.
“How did the departments which promoted cashew cultivation think the tribals from interior places would access the free market? Even after three to four decades, why is the problem not addressed?” asked tribal leader Govind Rao.
The horticulture department maintains that the farmers are free to sell their produce to anyone, including middlemen. Additional Director of the Horticulture Department M Venkateshwarlu suggested that farmers can store their yield and sell it when prices rise. However, the lack of storage facilities and the necessity to transport raw cashews to buyers within a specific timeframe often leads to losses for the farmers. “A majority of the farmers sell their yield to the middlemen. It is a free market. As far as the prices are concerned, it depends on the production. When production is high, procurement price is low and vice versa,” M Venkateshwarlu, Additional Director, Horticulture Department told TNM.
While the horticulture department claims to support cashew farmers by providing grafted saplings and promoting good agricultural practices, Venkateshwarlu insisted that for procurement, the cashew farmers could turn to other venues. While the official stated that the state government’s Girijan Co-operative Corporation (GCC) Limited too could procure cashew from Anakapalle, data from the GCC website indicates that the corporation hasn’t procured cashew at all since 2021. An official of GCC confirmed the same to TNM.
Venkateshwarlu also said that there were various Farmer Producer Organisations (FPOs) that could help with procurement. Farmers in Narsipatnam, however, said that they were not aware of any other avenues to sell their produce, and were also hesitant to seek them out due to their dependence on the local moneylenders for any financial emergencies.
In the Palasa region of Srikakulam district, non-tribal cashew farmers are also demanding MSP from the government, and the establishment of a state cashew board similar to that in Kerala to regulate the procurement process and ensure fair pricing. “The boom of the cashew industry was also one reason for several small and marginal farmers to plant cashew. The government provides support to the industries by providing power subsidies, tax deductions etc. But for us, middlemen decide everything,” alleged Madhava Rao, a non-tribal farmer and activist from Palasa in Srikakulam.
The lack of resources and opportunities for education and employment is one of the reasons tribal youth are returning to their villages in these remote areas. Ulli Somaraju (33) returned to his village Kadigadda in Ravikamatham mandal after working in different factories in urban areas. He now takes care of a three-acre cashew plantation. “There is little pay outside for people like me who have only studied till Class 10,” Somaraju said.
Recalling how his father once had to sell their livestock to repay a loan, and still had to give up his cashew produce without pay to the moneylender for four to five years, Somaraju said, “It would be a great relief if an MSP is fixed by the government.”
This reporting is made possible with support from Report for the World, an initiative of The GroundTruth Project.