Kerala Excise Minister K Babu revealed that the state government will be promoting the coconut water-based drink, Neera, as a non-alcoholic health drink.
An expert committee that studied the potential of "Neera" submitted a report to the minister, who said the government will certainly take a positive view of it.
Neera has a lot of body-building proteins and, despite being sweet, can be consumed even by diabetics. Neera turns into toddy after it is fermented four hours after being taken from the coconut tree and has an alcohol content of five to eight percent.
There are 29,536 toddy tappers in Kerala.
State Excise Commissioner Anil Xavier said rules have to be amended and the Abkari Act has to be revamped to promote Neera.
"With the ASEAN agreement all set to be in force from the April 1st next year, if our Neera has to compete with similar products of our neighbouring countries, then the sanction has to come," said Xavier.
Kerala has 180 million coconut trees and 93 of the 94 coconut-growing countries in the world make Neera-type drinks.
In Thailand, a 330 ml can of coconut water is sold at around Rs.160.
"On an average, one litre of Neera can be sold at Rs.100," said V.K. Raju, a member of the committee and associate director of research at the Kerala Agricultural University.
He said it has been found that from one coconut tree a farmer will be able to generate a monthly income of Rs.1,200.
"The recent state budget that was presented has earmarked funds for setting up of 10 plants that will process Neera," Raju added.
"The Coconut Development Board has suggested that at the grassroot-level coconut farmers should form cooperative societies and at the next level there should be a federation and at the district-level a new company should be set up to take up production," said Xavier.
The report would now be placed before the state cabinet.