How cashew buyers will fund crop's development

Wednesday September 15 2021
Cashew pic
By Louis Kalumbia

Dar es Salaam. Buyers of cashew nuts could contribute up to Sh30 billion to the development of the crop in Tanzania if the goal of producing 280,000 tonnes of the nuts this year will be realised.

Buyers agreed at a stakeholders’ meeting in Mtwara late last month to pay Sh110 per kilogramme of the cashew nuts they buy as their contribution to developing the crop ready for the 2021/22 trading season.

According to the new rules and regulations governing the business, the pledged payment is over and above the Sh64.48 per kilogramme contributed as gunny packaging charges; Sh38 payable as storage charges, and $160 per tonne of nuts– or 15 percent – as an export levy payable to the Tanzania Revenue Authority (TRA) on free-on-board (f.o.b.) value, whichever is the higher.

For its part, the government will contribute Sh110 per kilogramme. Earlier on, this was paid by cashew nut farmers for the provision of subsidized agricultural inputs. This change in the obligation to pay the subsidy starts this trading season.

The rules and conditions of cashew nut sales for the 2021/22 crop were released by the Cashewnut Board of Tanzania (CBT) shortly after the launching of the 2021/22 trading season, whose formal auctions are scheduled to commence on September 24.

The CBT acting director general, Mr Francis Alfred, told The Citizen in a telephone interview that the arrangements for funding sustainability of cashew nuts production in the country were officially agreed to by the respective players in the business.

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“Buyers agreed during our meeting that they would pay Sh110 per kilogramme as their contribution to the procurement of agricultural inputs. Also, the government would pay a similar amount – doing so for and on behalf of farmers,” Mr Alfred explained.

He stressed that the amount should not be confused with the crop’s export levy that will continue to be collected at the place of export.

According to him, CBT is in the process of compiling the costs incurred by the government this farming season in preparations to subsidise inputs for cashew nut farmers.

This season, the government distributed agricultural inputs free of charge to the farmers, he said – adding that CBT is confident that the projected harvest of 280,000 tonnes of cashew nuts will be attained, as “the situation in most growing areas for the new season is most promising.”

For example, preparations for the new farming season are going on well, while about 78 percent of the required packaging materials (gunny sacks) have already been distributed to the cashew-growing areas.

“About 3.5 million sacks are required for the packaging of 280,000 tonnes of the projected harvests. Already, 2.75 million sacks – enough to package about 216,000 tonnes of the crop –have been distributed to different Cooperative Unions for onward distribution to their respective Agricultural Marketing Cooperative Societies (Amcos),” Mr Alfred revealed.

“We are closely cooperating with the Mtwara Port officials to coordinate export preparations – and, apparently, they are able and ready to handle the produce for export,” he said.

The Ndanda Parliamentary Constituency legislator Cecil Mwambe had earlier said that the Sh220-per-kilogramme charge was to be equally paid by buyers and farmers.

“We (MPs) rejected the setup because the Sh210 billion that was in the Cashewnut Industry Development Trust Fund (CIDTF) wasn’t refunded to the cashew farmers. Instead, the government accepted to carry the Sh110-per-kilogramme burden instead of the farmers,” he said.

“However, during the stakeholders’ meeting in Mtwara, we reminded the government on the need to refund the Sh210 billion to farmers – which they promised to work on.”

For his part, Lulindi MP Issa Mchungahela urged the government to work on the challenges recorded during the distribution of subsidized agricultural inputs to farmers this farming season.

He named the challenges as suppliers delay to distribute inputs to the Cooperative Union and the Amcos, as well as the need to cement their commitment in the supply of inputs to farmers on a sustainable basis.

According to Mr Mchungahela, there were complaints that some agricultural inputs were diverted by unscrupulous leaders of the Cooperative Union and Amcos.

“Suppliers’ trust and patriotism should be improved instead of them focusing on huge profits. This problem also led to the supply of low-quality inputs in some places,” he said.

The government disbanded the CIDTF on December 21, 2016, and shifted its mandate to CBT.