Ex-minister faults govt's handling of cashew crisis

12Dec 2018
By Financial Times Reporter
Financial Times
Ex-minister faults govt's handling of cashew crisis
  • >>Says farmers are needlessly suffering from payment delays

A former cabinet minister, Nape Nnauye, has roundly criticised the government's handling of the ongoing cashew nut buying exercise, saying it was needlessly affecting innocent farmers.

Nape Nnauye.

Nnauye, who is a Member of Parliament of the cashew-growing Mtama constituency in Lindi Region representing the ruling Chama Cha Mapinduzi (CCM) party, publicly faulted the government yesterday over the cashew crisis.

In a much circulated tweet, Nnauye said the ongoing payment delays being experienced by farmers as a result of the government's verification exercise to weed out middlemen, were causing unnecessary suffering to innocent cashew growers.

"The solution ... is to change the payment system by enabling cooperative unions through TADB (the Tanzania Agricultural Development Bank) to make down payments to farmers for their cashews immediately after they deliver their harvests at warehouses," Nape said.

"What's happening now cannot solve the problem ... it's just torture to farmers."

Nnauye's comments come amid complaints from farmers over the slow pace of implementation of the government's cashew-buying plan.

The government kicked out all private buyers of cashew nuts last month and instead decided to purchase all the crop at 3,300/- a kilo after buyers offered farmers lower prices.

Authorities have also insisted that anyone who delivers cashew to the government for sale must first show proof that they are bona fide farmers and not middlemen, otherwise they will not be paid.

The Nachingwea District Commissioner, Rukia Muwango, was this week quoted as saying that people who have delivered their cashew to the government for sale but have no proof of cashew farms “should prepare themselves psychologically” for non-payment of their crop.

On the other hand, farmers’ complaints about delayed payments have been rising, occasioned by the government’s verification exercise to ensure money is paid directly to farmers -- not middlemen.

Speaking to the Financial Times last week, the Minister for Agriculture, Japhet Hasunga, said the government expects to conclude its cashew purchases before the end of this month.

As payment delays are still lingering, there is also concern over the lack of capacity for in-country processing of the country's entire cashew produce, estimated at around 200,000 tonnes this season.

Last month, President John Magufuli ordered the army to process all the raw cashew being purchased from farmers at the Bucco Limited factory so Tanzania can add value to its raw materials and boost export revenues.

However, an assessment of the factory with installed capacity of 10,000 tonnes a year recently revealed that it has obsolete technology, hence cannot process any raw cashew.

Faced with that setback, the government is now looking for ways of reviving the Bucco Ltd cashew processing plant by importing new machinery.

In last week interview the newly-appointed Minister for Agriculture, the government intends to implement a 'plan B' that will involve exporting the raw cashew now being purchased from local farmers for processing abroad in case the revival of a factory that was recently repossessed by the state from private owners flops.

“We basically have two alternatives ... First we are going to look into local capacity to process the raw cashew nuts. But if our capacity falls short, we are going to look for a contractor outside the country to do the cashew processing work for us and we will take our kernel (processed nut),” Hasunga told the Financial Times.

As the government mulls with local processing of raw cashews, some bankers have warned that the country's shilling could depreciate due to a halt of cashew exports.

"Exports of raw cashews between October and February are one of the biggest sources of foreign exchange to Tanzania,” a foreign exchange trader at a commercial bank in Dar es Salaam told the Financial Times.

“The fact that raw cashews have now been stopped means there will be a shortage of US dollars in the market and this will put a lot of pressure on the shilling."

Tanzania earned close to $542 million from cashew nut exports last year, which is double the $271 million fetched by the country's Number 1 cash crop in 2016, due to both an increase in production and higher prices at the world market.

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