The cashewnut nightmare

Saturday November 10 2018


By Louis Kolumbia @TheCitizenTZ

Dar es Salaam. The cashew nut saga took a dramatic twist yesterday with the government giving buyers a four-day ultimatum to purchase the crop or face deregistration.

Prime Minister Kassim Majaliwa gave the ultimatum in an address in Dodoma, underlining the tough stance that the government was willing to take to force a farmer-buyer deal.

Mr Majaliwa cried foul and accused the buyers of sabotage. He said the government will not tolerate a situation in which the traders reneged on a commitment made recently before President John Magufuli.

“Registered companies, including those that have purchased small amounts of cashews, should submit their letters of intent to my office by Monday,” Mr Majaliwa said in an address televised by the Tanzania Broadcasting Corporation. This was followed by a statement issued by his office.

Representatives of some of the buying companies yesterday remained apprehensive in their views following Mr Majaliwa’s directive. Mr Zawadi Mohamed of OM Agro Company said consultations and market survey was still critical to his clients before fulfilling the government’s demands.

“This is because the amount of cashews purchased, for instance, is determined only after the bill of lading has been issued to decision makers who are outside the country,” he said, noting that he had communicated to the company owners in India about the latest development.

The owner of Mkemi Cashews Company located in Mkuranga, Mr Salum Mkemi, said companies would have to abide by the government’s directives if they are to continue doing business in the country. “I will submit my letter applying to purchase cashews enough to feed my factory, which has a processing capacity of 5,000 tonnes. Hopefully, other companies will do the same,” he told The Citizen. He, however, said he did not take part in the auctions.

Farmers along the coast, especially in Mtwara and Lindi regions, are stuck with tens of thousands of cashew nut harvest after buyers failed to match a farm gate price of Sh3,000 per kilo set by the government.

The Cashewnut Board of Tanzania (CBT) has called off auctions twice over the last two weeks as traders failed to bid for the produce, citing price volatility in the international market.

The traders want to buy the crop for between Sh1,700 and Sh2,500 per kilo but farmers have boycotted, citing last season’s earnings of Sh4,000 per kilo, and a promise by the government for a higher return this year. President Magufuli held talks with the buyers at the State House during which he offered concessions in forms of fees and revenues to convince the traders to buy the produce for a minimum of Sh3,000 per kilo.

However, the meeting did not yield the desired end as only 2,500 tonnes of cashews out of 78,000 tonnes on offer were bought by about half of all the 35 registered buyers.

With a near-no-show by the buyers, and mounting frustration among farmers, yesterday’s intervention was to forestall a snowballing of the stand-off into a fully blown out crisis.

In his statement, Mr Majaliwa was categorical that the traders were on a go-slow. “The government is not impressed with the ongoing trend because it is committed to improving the crop’s production starting with preparation of farms, provision of better agricultural inputs and reliable markets that will benefit farmers,” he said.

The PM said because production this year is expected to be 200,000 tonnes, the firms which last season bought the more than 350,000 tonnes are able to buy all the cashews. Neither Majaliwa nor his office would say what transpired in a reported meeting between the Agriculture minister and foreign companies invited to look at the possibility of buying the crop.

Yesterday, Agriculture deputy minister Omary Mgumba said the government wanted to first provide the private sector the opportunity to prosper, dismissing claims the government was walking away from a promise to buy the cashews should there be no buyers.

“Nobody has publicly invalidated the decision, the government will purchase the product as the last resort,” he said, adding that even big countries like US and China intervened to protect their farmers.