Confusion reigns in cashew nut business

Dar es Salaam. Agricultural Marketing Co-operative Societies (Amcos) and other cooperative unions in the cashew nut sub-sector are facing a serious financial crisis due to unpaid cashew nut levies for the 2018/19 farming season.

The outstanding levies amount to over a staggering Sh18 billion.

Over and above the overdue levy, the Amcos and cooperative unions are also overwhelmed with other debts.

In such a dire financial situation, the implementation of cashew nut development projects by the two institutions has stalled, while the purchasing and distribution of packaging materials for the 2019/20 harvest season have been adversely affected.

Amcos leaders say that, up and until Wednesday, October 2, 2019, they had on average received only Sh14 out of the Sh70 levy on a kilogramme (kg) of the commodity that is intended to support their activities.

Likewise, cooperative unions have received only Sh3 out of the Sh30 per kilogramme fee with which to support their operations.

During the last harvest season, more than 222,000 tonnes of cashew nuts that were all purchased by the government at Sh3,300 per kilo. This was after private buyers had offered unacceptably low prices during initial auctions.

This means that Amcos received only Sh3.11 billion out of the more than Sh15.54 billion expected, while the cooperative unions received a relatively measly Sh666 million out of the Sh6.66 billion due to them.

Agriculture Minister Japheth Hasunga said the government is aware of the concerns of the cashew-related Amcos and cooperative unions. “They will be considered after we have completed paying all cashew farmers,” he said in a telephone interview.

Last week, Mr Hasunga told a press conference that cashew nut farmers are owed Sh50 billion by the government – and stressed that the payment exercise was progressing in accordance with the availability of funds.

The Tandahimba and Newala Cooperative Union (Tanecu) chairman, Mr Shaibu Aifai, said they secured a Sh7.5 million loan from the CRDB Bank with which they purchased two million sacks for cashew nuts packaging in the 2018/19 harvesting season.

“We expected to use the unpaid money in servicing the loan, and to purchase 500,000 additional sacks for this season to supplement the 750,000 sacks bought for the 2019/20 season,” he said. But, only Sh1.74 million out of Sh1.74 billion had been paid for the 58,000 tonnes of cashew nuts collected last season, he lamented.

In the event, he called on the government to pay them soonest to avoid the collapse of cashew nut cooperatives in the country.

The chairman of the Ruangwa, Nachingwea and Liwale Cooperative Union (Runali), Mr Hassan Mpako, said the construction of a warehouse with the capacity of storing 10,000 tonnes of cashew nuts in Ruangwa District had been suspended for lack of funds.

Also, suppliers of cashew nuts packaging materials (sacks) are owed over Sh2.8 billion by the co-operative union, Mr Mpako ruefully noted that the union was facing legal challenges, and faces possible liquidation.

“Our workers have not been paid for months. The project to procure laptops for our clerks in order to reduce cheating, as well as the provision of capacity-building training to increase nut-grading efficiency, have all stalled for lack of funds,” he revealed – adding that only Sh120 million had been disbursed to the union, out of the Sh1.26 billion that is rightfully due to them.

The Masasi and Mtwara Cooperative Union (Mamcu) general manager, Mr Protence Rwiza, said service providers, supervisors and transporters owe the union over Sh150 million.

“We are currently facing difficulties in the procurement of services for the 2019/20 farming season. This poses the threat of paralyzing the union’s operations this season,” he said.

The Tandahimba Amcos secretary, Mr Juma Namang’anyula, said the Amcos owes Mkaka Investment Company Sh12 million for building materials it purchased on loan for the construction of a storage facility with a capacity of 200 tonnes.

“We were charged 50 per cent interest for not meeting the December 2018 payment deadline. This raised the amount to about Sh12 million, up from the original bill of Sh7.95 million,” he told The Citizen.

The Mlingoti Amcos secretary in Tunduru, Ruvuma Region, Mr Alai Alai, said a project to construct an office for the Amcos has stalled and the Amcos owes salary arrears to its permanent workers and casual laborers.

In another development, the stakeholders’ meeting that was slated to take place in Dar es Salaam today has been shifted to Mtwara.

“The new date for the meeting which could be either October 7, 8, 15 or 16 would be known later today (yesterday), said the acting director general of the Cashewnut Board of Tanzania, Mr Francis Alfred, adding that “these changes aim to accommodate stakeholders’ demands.”