Economics of Cashew

Cashew (Anacardium occidentale L.) is one of the most valuable plantation crops cultivated across the coastal belts of India, with Kerala, Maharashtra, Andhra Pradesh, Odisha, and Karnataka accounting for a major share of the country’s production. As per the Directorate of Cashew and Cocoa Development (DCCD), India produced approximately 7.42 lakh metric tonnes of raw cashew nuts (RCN) from 10.11 lakh hectares in 2022-23, with an average productivity of around 760 kg/ha. However, productivity varies significantly depending on agronomic practices, plant variety, input use, and environmental management.

In recent years, the growing consumer preference for chemical-free and environmentally responsible food products has catalysed a shift toward organic cashew farming, particularly in states like Kerala, where agro-ecological conditions and farmer readiness align with the organic farming ethos. This model of cultivation integrates sustainable practices like organic manuring, bio-pesticide application, mulching, water conservation, and minimal mechanical disturbance of soil.

The below framework captures a 10-hectare organic cashew plantation established with a spacing of 7m x 7m, allowing for 200 plants per hectare (2,000 plants total). The initial establishment cost is calculated at ₹1,50,000 per hectare, mainly covering land preparation, pit formation, planting material, and initial labour operations. With labour wages standardized at ₹800 per day, the model assumes a phased labour deployment approach, focusing intensively on the first year (165 labourers) and stabilizing to approximately 50 labourers per year in subsequent years.

Yearly operations include manuring, plant protection measures, intercultural operations, and irrigation where needed. Organic inputs such as farmyard manure (FYM) at ₹8,000/ha and bio-based pesticides at ₹4,000/ha are used annually. Irrigation cost is incurred only in the first year, given the perennial nature of the crop and rainfed compatibility. Miscellaneous expenses covering field tools, boundary maintenance, and supervision are also accounted for.

Cashew yield typically begins from the third year, initially low at 2 kg per tree (400 kg/ha) but gradually increases with canopy development and physiological maturity. By the seventh year, trees are expected to yield up to 10 kg per tree (2,000 kg/ha). For the 10-hectare model, this equates to a cumulative production of 20,000 kg of raw cashew nuts by the seventh year. The pricing trend with reference to the current pattern is anticipated to be ranging from from ₹150/kg in 2024-25 to ₹200/kg in 2028-29, aligned with APEDA export statistics and domestic demand cycles.

The economic assessment reflects the following key outcomes:

The Cost-Benefit Ratio (CBR) improves significantly over time:

The investment recovery occurs by the end of the fourth year, and subsequent years deliver strong returns, making organic cashew cultivation a financially sound long-term venture. The profitability also improves further when intercropping systems (e.g., legumes or medicinal herbs in early years) or value-added cashew products (kernel, butter, apple-based syrup) are introduced.

The cost-return framework aims to support decision-making by farmers, agricultural officers, project implementation agencies, and financial institutions. It serves as a practical reference for those planning to invest in organic cashew cultivation on a medium to large scale, while ensuring ecological integrity, food safety, and long-term income security for farming communities.

Cost of Cultivation of Organic Cashew

Unit Area- 1 Ha No. of plants per Ha- 200
Spacing - 7mx7m Labour Cost - Rs.800/- per head

Sl.
No.		 Particulars 1st Year
2018-19		 2nd Year
2019-20		 3rd year
2020-21		 4th year
2021-22		 5th year
2022-23
Labour Cost (Rs.) Labour Cost (Rs.) Labour Cost (Rs.) Labour Cost (Rs.) Labour Cost (Rs.)
1 Land Clearing 25 20000
2 Cleaning & Levelling 25 20000
3 Terracing 40 32000
4 Pit making 20 16000
5 Cost of planting material
& Transportation charges		 Rs.50/- 10000
6 Planting & staking 10 8000
7 Manuring 3 2400 3 2400 3 2400 3 2400 3 2400
8 PPC Application 2 1600 2 1600 2 1600 2 1600 2 1600
9 Irrigation 20 16000
10 Intercultural Operation 20 16000 40 32000 40 32000 40 32000 40 32000
11 Cost of manure Rs 40/- Ha 8000 Rs 40/- Ha 8000 Rs 40/- Ha 8000 Rs 40/- Ha 8000 Rs 40/- Ha 8000
12 Cost of plant protection
chemical		 Rs.20/ 4000 Rs.20/ 4000 Rs.20/ 4000 Rs.20/ 4000 Rs.20/ 4000
13 Harvesting - - - - 5 4000 5 4000 5 4000
14 Miscellaneous 10400 12000 10000 10000 10000
15 Year wise Total 165 labourers 150000 45 labourers 60000 50 labourers 62000 50 labourers 62000 50 labourers 62000

Cost for Establishment of 1 Ha of land under cashew in the 1st year – Rs. 1,50,000/-

Income & Yield Analysis (Anticipation)

Population of cashew tree in a Hectare - 200 Nos.
Year of Planting – 2018-19

Sl.
No.		 Year Yield/tree Yield /Ha Proposed area (Ha) Total Yield (Kg) Rate/Kg (Rs.) Total Income (Rs.)
1 3rd year (2020-21) 2 Kg 400 Kg 10 4000 170 6,80,000
2 4th year (2021-22) 5 Kg 1000 Kg 10 10000 180 18,00,000
3 5th year (2022-23) 6 Kg 1200 Kg 10 12000 190 22,80,000
4 6th year (2023-24) 8 Kg 1600 Kg 10 16000 200 32,00,000
5 7th year (2024-25) 10 Kg 2000 Kg 10 20000 200 40,00,000

Profitability Statement

Proposed Area- 10 Ha

Year Cost Expenses (Rs.) Benefit (Rs.) Net Income (Rs.)
2018-19 Fixed (Establishment of group) 15,00,000 - -
2019-20 Variable (Maintenance of crop) 6,00,000 - -
2020-21 Variable (Maintenance of crop) 6,20,000 6,80,000 60,000
2021-22 Variable (Maintenance of crop) 6,20,000 18,00,000 11,80,800
2022-23 Variable (Maintenance of crop) 6,20,000 22,80,000 16,60,000
2023-24 Variable (Maintenance of crop) 6,20,000 32,00,000 25,80,000
2024-25 Variable (Maintenance of crop) 6,20,000 40,00,000 33,80,000

Cost Benefit Ratio

;