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Govt should rescue cashewnut industry

27th March 2012
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Editorial Cartoon

Tanzania`s cashewnut industry looks most interesting, puzzling and quite prosperous, all at the same time.

It is most interesting because its history is characterised by ups and downs; it is puzzling in the sense that it has always moved forward and backward; and it’s quite prosperous in that this is the second time it is doing the country proud economically.

Bad, however, that this gives little hope of the great and memorable achievements the industry has made being sustained.

The industry, once the most prosperous in the country, is in serious trouble with little precedent even as this year’s produce stands at 155,000 tonnes, the highest ever recorded.

The Cashewnut Board of Tanzania says the quixotic part of the story is that, despite this attractive figure, the industry has over 85,000 tonnes lying in godowns owing to problems with the warehouse system. The consignment cannot be disposed of simply because there are limited markets for raw cashewnuts.

That aside, one would have expected the raw cashewnuts to have been added value to at home and thus earn the country more foreign exchange and create jobs for our people.

But CBT reports that value addition has not been possible even at this time when the industry needs it most, the major reason being that only two of the 12 processing factories built with a USD184m World Bank loan in the 1970s, only two are still in operation.

The fact that these factories can process only 4,000 tonnes of raw cashewnuts a year, leaving the rest of the lot rotting, points to a disaster. This is because, should this ugly situation continue unabated, the industry will surely collapse.

Yet, this seems to have always been the case, according to reliable sources. Once the fourth most valuable export crop after coffee, cotton and tea, some decades ago cashewnuts registered a steady rise in both production and monetary value. Thereafter, it witnessed a dramatic decline - from 145,000 tonnes in 1973 to 16,500 tonnes in 1986.

The major causes of the drop included socio-economic factors such as low producer prices, inefficient marketing and the impact of villagisation. Among the other causes were biological factors such as cashew powdery mildew disease, low tree yields and overcrowding of trees.

Recently, higher cashew prices and liberalised marketing policies have created favourable conditions that have encouraged farmers to tackle several of the biological constraints on production.

This has made production rise from 16,500 tonnes in 1986, to 70,320 tonnes in 1994, to 120,000 tonnes last year and to a projected 155,000 tonnes this year.

The point is that privatisation alone cannot move this industry forward; intervention in terms of appropriate policy measures is a must.

The owners of the factories see no reason to continue processing cashewnuts in Tanzania, which makes it difficult to sensitise middlemen into buying more of the crop from farmers. This makes farmers also see no reason to continue cultivating a crop whose market is shaky, at best.

Deliberate efforts must be made to ensure that, in the absence of ready buyers locally, as much of the crop as possible is processed in Tanzania. Short of this, the industry will surely crumble.

SOURCE: THE GUARDIAN
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