The government has threatened to revoke permits of all cashew nut buyers, who have been moving around in southern regions buying the produce at 500/- contrary to agreed price of 1,200/- per kg.
Agreed price of a kg of Grade I cashew nut is sold at 1200/- while the Grade II stands at 960/-, but some buyers are reported purchasing the produce at less than half of the set price.
Agriculture, Food Security and Cooperatives deputy minister Adam Malima issued the threat here on Monday when giving the government’s stand on the low price of the crop offered to farmers in Lindi and Mtwara regions.
The deputy minister was responding to question by Mary Chatanda, (Special Seats, CCM), who had wanted the government to increase the prices of maize, cotton and cashew nuts.
“We have already ordered the Cashewnut Board of Tanzania (CBT) to go through all licenses given to buyers and report back to the ministry for further action,” he said.
Malima said that those who will be found operating contrary to the agreed terms, their licenses will be revoked and instead other buyers will be given licenses and start business.
“This is not acceptable. We gave them price caps of 1,200/- per kg, but they go to farmers and buy at 500/- per kg purposely to get more profit,” the minister said, adding: “This is exploiting our poor farmers and the government is going to deal with those involved in that dubious business.”
The minister asked MPs and other stakeholders in the sector to team up in addressing the challenges facing the cashew nut sector in the country.
He further called upon businesses to invest in cashewnut processing to add value to the produce and change farmers’ lives in the country.
According to the minister, large percent of the Tanzania’s cashewnuts are processed in India.
“This trend needs to be discouraged taking into account that our cashewnut is the best in the world. That’s why we want more investors to invest in the sector, so as to brand the crop as produced and processed from Tanzania. I am sure this will fetch more money than what it is today,” Malima said.
At the moment Tanzania exports only 20 percent of processed cashewnuts, denying it the opportunity to earn more foreign exchange.
There are only three working plants located in Mtwara, Dar es Salaam and Newala which can process not more than 20,000 tonnes a year.
Tanzania produces over 150,000 tonnes of cashew nuts annually.
Cashewnut provide an important source of income for some 250,000 smallholder farmers in the southern coastal regions of Mtwara, Lindi, and Ruvuma. It accounts for 80-90 percent of Tanzania’s marketed cashew crop.