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$550m lost in raw cashew nut sales

11th February 2013
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Agriculture Non Sector Actors Forum (ANSAF)

 At least US$ 550m was lost by the country between 2008 and last year, equivalent to US$ 110m annually, due to low levels of value addition for the cashew nut crop.

Agriculture Non Sector Actors Forum (ANSAF) said this during a meeting with Members of the Parliamentary Committee on agriculture, livestock and water in Dodoma last Friday.

According to the research report commissioned by ANSAF, the country’s cashew nut sector has over the years failed to perform to its potential, which if harnessed can help create over 45,000 jobs in the country and make a significant contribution to the economy.

Through the single marketing approach and opaque auctioning system, the sales prices and analysis is also opaque. Ultimately, the payment farmers receive is diluted, due to the high level of costs at the cooperative union and warehouse level. 

Audax Rukonge, the ANSAF Executive Secretary said the research revealed that the cashew sector is the most regulated in the world, and yet Tanzania remains largely a producer of raw cashew nuts for processing in Asia.

According to Rukonge the constraints in processing cashew nuts in Tanzania largely arise from the economic environment, structure and regulation of the sector in Tanzania. 

“We cannot transform agriculture when the farmer is receiving between 57% and 65% of the sale price and approximately 15% less than the Cashewnut Board of Tanzania (CBT). This does not motivate farmers to tend their crop,” says Rukonge.

CBT was urged to ensure the sector is well coordinated, principles of cooperatives adhered to and all the decisions regarding marketing to be based on clear information that is widely shared.

Although MPs were advising the government to recover the privatised processing industries, ownershave not renovated them, Rukonge said, adding: “You do not have to encourage people to take loans and reinvest in a very old technology. That cost will never be recovered,” he said, adding that the private sector should be encouraged to invest in new processing plants.

Possible incentives could include working with financial institutions to lower interest rates for purchase of plants; extend repayment periods as well as reduction of taxes on importation of new processing plants.

The committee chairman Prof David Mwakyusa urged ANSAF to work together with the Ministry of Agriculture and Food Security to solve the problems of cashew farmers. 

He said the committee will make sure the findings are forwarded to the government.

Farmers from Mkuranga, Mtwara, Masasi and Lindi said the cashew nut crop is being used for political ends, adding that it is viewed by some as a way of extracting money from the system with farmers as pawns in the game. 

Makaburi Babtista who is a farmer from Mtwara who attended the meeting faulted the cooperatives for serving the interests of a few and that although the warehouse receipt system is good, it is highly politicised.

The institutions charged with management of the sector were not listening to the market, but to short term political factors, especially from local politicians, he said.

“Without a coordinated execution, the sector might continue to be weak and open to overcharging and profiteering. For example, compared to other countries growing cashew nuts in Africa, the crop’s inputs in Tanzania are very expensive,” he said.

Hon Mansoor Sharif, Kwimba MP said farmers have not been benefiting much from the cashew nut farming as the traders buy according to grades 1, 2 and 3, but in India the nuts are all sold as grade one.

“The farmer sells to the trader according to grades, but when they are taken to India they are all accounted for as grade one. I think farmers should be given information concerning the international market to help them set the local price,” he explained  

Last week in parliament the government 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 kilo of grade one cashew nuts, while the grade two sells for 960/-.

SOURCE: THE GUARDIAN