Starter Kit. Idea 286 of 500. Cluster 14
Cashew-processing units in Puttalam owned by the growers, not by the traders
The mechanism, from the book
The smallholder sells raw to a collector at the gate and the collector sells to a packer who puts his own name on it. Denmark's farmers got rich the day they owned the creamery.
The first step
Compare what the trader pays around Puttalam per kilo of raw cashew with the shelf price of processed cashew in a supermarket, and work out the difference per kilo. Take that figure to a meeting of growers and ask how many would put their harvest and a small share into a jointly owned processing unit. Names and pledged kilos are the proof.
- Who pays first
- A supermarket or wholesaler buying processed cashew, who will buy from a grower-owned unit that can guarantee grade and volume.
- What leaves today
- Raw cashew leaves the growers through traders, and the shelling, grading and packing that multiply its price are done by someone else.
Ask first
- Department of the Registrar of Companies. Ask which company or co-operative form lets growers own the processing unit.
- the area Medical Officer of Health. Ask what a cashew processing unit needs before selling to shops.
Check before you spend
Whether growers sign supply contracts before the unit borrows to build, and whether the unit meets food-safety rules for export.
Find out these three numbers
- What does the trader pay per kilo of raw cashew?
- What does processed cashew sell for per kilo in a shop?
- How many tonnes would growers commit each season?
A comparison from the book
Denmark. Chapter Eleven
"And because the supply was guaranteed, the creameries could borrow to build."
Guaranteed supply from the growers is what lets their own unit borrow to build.
The test
Does it keep value that now leaves the island, or build the proof that lets somebody else do so?
From the appendix of Why Not Sri Lanka? by Dr Maheshika Halbeisen. The idea and the mechanism are the book's; this kit was written for the site.