Kerala Sets Record ₹150/kg for Raw Cashew Nuts – Implications for Farm‑Gate Pricing and Procurement Policy

Overview On 20 February 2026 , the Kerala state government announced an unprecedented farm‑gate price of ₹150 per kilogram for domestic raw cashew nuts (RCN). The decision was taken by a high‑level price‑fixing committee chaired by B. Ashok , Principal Secretary, Agriculture, and Agricultural Production Commissioner. Key public‑sector bodies – the Kerala State Cashew Development Corporation (KSCDC) , the Kerala State Cashew Workers Apex Industrial Co‑operative Society (CAPEX) and the Cashew Board – have been tasked with procurement, aiming to shield farmers from market volatility and ensure a steady supply to factories. Key Developments Development 1: Fixed price of ₹150/kg for RCN, the highest ever recorded by the government, effective for the entire harvest season. Development 2: Mandatory compliance for all buyers – they must pay the full announced price, eliminating middle‑man exploitation. Development 3: Creation of a robust procurement network through KSCDC , CAPEX and the Cashew Board , with the Board handling larger volumes via a specialised tender process. Important Facts Fact 1: The price ceiling will remain unchanged from the start to the end of the season, as stated by S. Jayamohan , Chairperson, KSCDC. Fact 2: The procurement model seeks to bypass intermediaries, directing the entire harvest to state‑run entities for maximum economic benefit to farmers. UPSC Relevance This case study touches upon multiple UPSC syllabus areas: GS Paper III – Agriculture and Food Processing (price support mechanisms, procurement reforms), GS Paper II – Governance and Public Policy (role of state‑run corporations, committee‑based decision‑making), and GS Paper I – Indian Economy (commodity pricing, market stabilization). Questions may probe comparative analysis with other commodity price‑support schemes (e.g., sugar, tea), the effectiveness of public procurement in rural development, or the constitutional basis for state intervention in agricultural markets. Way Forward For sustained impact, the government must ensure transparent tendering by the Cashew Board, strengthen farmer‑to‑corporate linkages, and monitor price transmission to downstream processors. Periodic review mechanisms could adjust the price in response to input cost fluctuations, while capacity‑building for farmer collectives would reduce dependence on intermediaries. Successful implementation could serve as a template for other high‑value horticultural crops.