Government now rules out Sh18bn pay to cashews cooperatives

Wednesday October 9 2019

Deputy minister for Agriculture Omary Mgumba.

Deputy minister for Agriculture Omary Mgumba. Photo |File 

By Louis Kolumbia @Collouis1999

Mtwara. Deputy minister for Agriculture Omary Mgumba told Agricultural Marketing Cooperative Societies (Amcos) and cooperative unions yesterday that the government will not pay them outstanding levies.

The outstanding levies for the 2018/19 farming season stand at more than Sh18 billion.

Amcos leaders disclosed that until last Wednesday, they had received Sh14 only out of the Sh70 per kilogram levy, which was meant to support their operations.

Likewise, cooperative unions have received Sh3 only out of Sh30 per kilogram fee.

During the 2018/19 season, over 222,000 tonnes of cashew nuts were produced and bought by the government at Sh3,300 per kilogram after private buyers had offered low prices during initial auctions.

Statistics show that while Amcos had an outstanding balance of Sh12.4 billion, cooperative unions had unpaid balance, which amounted to Sh6.02 billion, thus making the total of Sh18.42 billion.


Speaking during the cashew nut stakeholders meeting yesterday, Amcos and cooperative union leaders demanded answers from the government on when the funds would be paid to them.

Responding to their demand, Mr Mgumba said Amcos and cooperative unions should forget about the payment and focus on the 2019/20 season. “The government has been so kind enough to Amcos and cooperative unions by paying them what they received. Due to circumstances that surrounded the season, other stakeholders including district councils received nothing during the season,” he said.

“Currently, we are striving to pay some of the farmers and service providers who have not yet received their payments, so nothing else will be paid to Amcos and cooperative unions.”

The government’s response means Amcos and cooperative unions are now supposed to look for other sources of income to execute their operations, which include distribution of packaging materials, implementation of stalled projects that include construction of warehouses and servicing debts that have overwhelmed them in order to make the 2019/20 season a success.