2019 was a tough year for Tanzania cashew industry

Friday December 27 2019

A farmer at Mtua village in Nachingwea district

A farmer at Mtua village in Nachingwea district Lindi region Halima Chinguile wait to sale cashew nuts at the sales point in the village last year.  On Sunday Prime Minister Kassim Majaliwa said he was not satisfied with the performance of the present management of the cashewnut board which has failed to revive the crop. PHOTO|FILE 

Dar es Salaam. The cashew industry in the country is still struggling to regain its place in Tanzania’s economy after experiencing price setting battles during the 2018/19 season.

As a result, the government had to lock out private buyers and opted to buy over 222,000 tonnes out of over 225,000 tonnes produced.

The government felt that buyers intended to exploit farmers after offering low purchasing prices at the beginning of the season and intervened for what it said was to protect producer’s interests.

On November 12 2018 ,President John Magufuli directed the Tanzania Agricultural Development Bank (TADB) to collaborate with other government institutions to purchase all cashews from farmers at Sh3,300 per kilo.

TADB was directed to collaborate with the ministry of Agriculture, the ministry of Industry and Trade, the ministry of Finance and the Tanzania People’s Defence Forces (TPDF) and a number of other stakeholders.

But the decision met several challenges including a significant decline in production in some places such as Tandahimba and Newala districts.

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Other challenges include low cashew prices as compared to Sh3,300 per kilo offered by the government, delayed payment and inadequate packaging materials.

The year saw the suspension of the online cashew trading system and the sacking of the Industry and Trade minister Mr Joseph Kakunda for failure to secure market for cashews bought by the government.

Low production

The Cashew nut Board of Tanzania (CBT) director general Francis Alfred told The Citizen early about 151,574.164 tonnes of cashews worth over Sh406.330 billion had been auctioned by December 8, 2019.

He expressed fears that the 290,000 tonnes projected for the 2019/20 season will hardly be reached due to abrupt change of weather that damaged 5,000 tonnes of the produce in Coast Region.

Cooperative leaders in Masasi and Mtwara Cooperative Union (Mamcu) reported to have sold over 68,000 tonnes and the Tandahimba and Newala Cooperative Union (Tanecu) has auctioned 51,914 tonnes out of targeted 80,000 tonnes reaching the eighth auction.

Others are the Tunduru Agricultural Marketing Cooperative Union (Tamcu) which has traded 17,000 tonnes out of 23,000 tonnes projected and Ruangwa, Nachingwea and Liwale Cooperative Union (Runali) 25,000 tonnes out of 45,000 tonnes anticipated.

Farmers have attributed the decline to delayed payments for cashews sold during the 2018/19 season.

“Even when the CBT decided to help farmers to get agricultural inputs on loan, the process was marred by unnecessary bureaucracies,” said Mr Ally Kaisi from Mitondi ‘A’ Agricultural Marketing Cooperative Society (Amcos).

Apart from denying farmers income to improve their social and economic wellbeing, the government was also be denied income in terms of export levy.

In the 2017/18 season, the government earned $575million which is equivalent to Sh1.3 trillion from cashews exports.

Last season, Sh722 billion used to purchase Raw Cashew Nut (RCN).

Low prices compared to last season

Last season, RCN was sold at Sh3,300 per kilo which hasn’t been reached as the country held its sixth auction in December 8, 2019.

The minimum price of Sh2,047 per kilo was recorded by Coast Region Cooperative Union (Corecu) while maximum price of 2,857 was registered by Runali in an auction held in December 1, 2019.

The price offered by buyers this season was less by between Sh443 and Sh1, 253 compared to the price offered by the government in the 2018/19 season.

Delayed payments

The 2019/20 season which started in November 31, 2019 began amid farmer’s complaints over delayed payments.

Most farmers told this paper they had not received payments for cashew sold during the second and third auctions when they entered the sixth round.

But the assistant registrar of cooperatives in Mtwara Region, Mr Juma Mokili said the matter had been amicably addressed through a collective meeting between the Bank of Tanzania (BoT) and banks engaged in the cashew business.

“The challenge was that most banks have no branches in remote areas. Also, most farmers provided inaccurate information to banks, ” he told this paper.

Shortage of packaging materials

The sector was reported to face a serious shortage of packaging materials, a situation that threatened to damage the product in the hands of farmers and Agricultural Marketing Cooperative Societies (Amcos).

Though the problem was reported by cooperative leaders in Tandahimba, Newala, Masasi and Mtwara, reports said Tunduru was worst hit.

Some leaders in the cooperative unions attributed the shortage to the government’s failure to pay about Sh7.9 billion for packaging materials used in the 2017/18 and 2018/19 seasons respectively. However, Agriculture minister Japhet Hasunga refuted the claims, saying the debt had nothing to do with the ongoing shortages. He accused the cooperative unions of failure to timely engage the government on the matter.

Online cashews trading suspended

Mr Hasunga announced in September Tanzania cashews would be sold online during the 2019/20 season through the Tanzania Mercantile Exchange (TMX) to increase transparency and give farmers the opportunity to choose the highest bidder.

However, the system was suspended by Prime Minister Kassim Majaliwa on October 2, 2019, few weeks before the commencement of the 2019/20 season.

His decision aimed to ensure stakeholders, including farmers and buyers, get better understanding of the system before starting to use it.

Industry and Trade minister Kakunda sacked

June 8, 2019, President Magufuli sacked the then minister for Industry and Trade Joseph Kakunda over cashews fallout and revealed why he sacked him.

“We purchased over 200,000 tonnes of cashews, how much have been sold? Being the minister for Industry and Trade, how much cashews business have been done?” questioned the President, adding.

“The army and the ministry of Agriculture have fulfilled their responsibilities to collect all cashews and preserve them in godowns. But, what has been done by the ministry for Industry and Trade?”

What stakeholders say

The Tandahimba Farmers Association (Taffa) chairman, Faraji Njapuka said 2019 was a tough year to most cashew farmers due to low prices.

He blamed low harvests in some places to delayed payment to farmers and provision of agricultural inputs. Mamcu general manager Protence Rwiza said the year was good because they managed to break sales even after selling over 68,000 tonnes in the eighth auction.

“Farmers are also receiving payments on time. Inadequate supply of packaging materials was the only challenge that was, however, addressed,” he said. The Runali general manager, Mr Hassan Mpako, said transparency had increased during the 2019/20 trading season, eliminating a possibility of buyers to collude and offer low prices.

“Poor capacity of buyers to collect purchased cashews to cooperatives’ warehouses has however slowed down trading speed.,” he said. Tamcu general manager Imani Kalembo said a shortage of sacks remained the only challenge facing the union, noting that after everything had been put on track, the target to auction 23,000 tonnes remained there. Tanecu chairman Shaibu Aifai said delayed payments subjected members into social and economic hardships. “The government should increase trust to cooperatives. It should reduce declarations which confused both farmers and other players this year,” he said.