Cashew nuts: Warehouse operators pay the price for poor performance

Dar es Salaam. The 2022/23 Raw Cashewnut trading season is expected to kick off on October 14, 2022 in the crop producing regions. The Citizen’s Louis Kolumbia interviewed the acting managing director of the Warehouse Receipt Regulatory Board (WRRB), Asangye Bangu, who among other things, talks about the board’s hard decision to deny licences to seven warehouse operators.

 How prepared is the WRRB for the 2022/23 cashews trading season?

WRRB has denied licences to seven warehouse operators who underperformed in the 2021/22 trading season according to the board’s analysis. During the analysis, 22 companies licensed to operate warehouses during the 2021/22 were grouped according to their performance, with the seven being among the poor performers.

The underperforming operators have been directed to work on their weaknesses in order to be re-evaluated next season so as to establish whether they should be re-licensed. Currently, five companies have been registered for the licensing process, hopefully, the number of new firms will increase as the process progresses.

WRRB preparations also include the plan to improve warehouse business operations by digitalising the entire system from cargo receipt to their adequate release from warehouses. These improvements include instructing warehouse operators to install CCTV cameras in their respective go-downs, a move that will enable us to closely monitor what is going on inside.

Also, we have strategised to ensure presence of inspectors throughout the year who will ensure warehouse operators conduct their duties to the board’s expectations. Therefore, warehouse operators who have been committing crimes in person or through their executives should be careful because this system will uncover everything.

We have emphasised insurance mechanisms on cargoes received in warehouses to increase their safety, despite the fact that some buyers haven’t been paid money owed for last year. We are working closely with insurance agencies to ensure the obligations are fulfilled. I would like to commend the National Insurance Corporation for accomplishing up to 99.7 percent payment to cashew buyers.

For the 2022/23 cashews trading season, we are also planning to replace the old analog weighing scales with digital ones following numerous complaints from farmers.

During my visit to the southern regions, most farmers raised concern that the accuracy of information provided by operators using analog weighing scales was doubtful. They proposed the introduction of digital weighing scales and since we have seen how they have transformed businesses in warehouses in Kagera Region, we have resolved to start introducing the new scales in the 2022/23 season.

We will start by procuring 200 weighing scales, that we will distribute to some Agricultural Marketing Cooperative Societies (Amcos) out of the 680 operating in cashew growing regions. The process will continue until all Amcos are reached. This will enable us to experience how the digital scales will improve data management in the processes that will be accompanied with issuance of electronic receipts.

Electronic receipts will provide us with important information about crops available in warehouses that will help buyers in making informed decisions. Also, WRRB in collaboration with the Cashewnut Board of Tanzania and the Tanzania Cooperative Development Commission (TCDC) has issued a guideline that will enable us to timely resolve identified challenges.

Last but not least, a strengthened Warehouse Receipt System (WRS) will enable Local Government Authorities to easily and efficiently collect the three percent fee mandated by the law as farm gate prices. Also, vibrant WRS will enable buyers to stop losing money as their demands will be met through one shop, the Tanzania Mercantile Exchange (TMX) in collaboration with cooperative societies. These are responsible for ensuring smooth collection, storage and sales of products.

What are the major challenges facing the WRS and how are they addressed?

The first major challenge is farmers’ desire to be paid shortly after crops have been received in warehouses, mainly due to lack of awareness on the WRS functioning. Ongoing awareness raising initiative has started changing their understanding, including the knowledge that the system provides better prices than what they get when buyers follow them in their farms. Education to stakeholders will continue because apart from enabling farmers to get better prices, buyers are assured of easily getting as much produce as they want. This has been witnessed in cocoa trading in Morogoro Region, Kyela, Busokelo and Rungwe districts in Mbeya Region.

Also, sesame farmers have also received better prices in different parts of the country as well as cashew farmers in Morogoro Region. Apart from better prices, the system assures councils of enough revenue for implementation of development projects.

Horticulture is considered to be a liberator of women and youth economically. How does WRRB support the sub-sector in achieving sustainable development?

 This is a very important sub-sector for the country. WRS can also be introduced in horticultural crops.

Farms could be considered as warehouses after experts have confirmed that estimated crops in tonnes could be provided to TMX for buyers to compete even before harvesting. Prospective buyers will then be required to deposit money in a special bank account until the harvesting season when the actual tonnage will be confirmed.

WRRB will collaborate with the Tanzania Horticulture Association (Taha) for the realisation of this strategy as well as building cold rooms for preserving horticultural crops. We will register such warehouses countrywide and link them with players in fish, ocean and lakes products as well as horticultural crops dealers.

What are WRRB’s strategies in assisting the sixth phase government in revolutionising agriculture?

We are cooperating with development partners and the government in identifying warehouses that are available across the country. This will enable us to know our strengths and weaknesses and evaluate the country’s capabilities in meeting demand. Recognised warehouses will be connected through the Information Communication Technology (ICT) so that foreign players, including those who expressed interest to invest in the sector during the Dubai expo will have access to accurate information. Identified warehouses will then be registered with the International Organisation for Standardisation (ISO) for certification.

This will enable all products passing through the warehouses to be recognised and respected globally. The WRRB in collaboration with the TMX and TCDC has strategised to ensure that crops grown in different districts and regions are entered into the formal systems.

We are aware of traders who have lost their money through middlemen and we aim at ensuring we hold frequent auctions on different crops so as to attract players and large quantity buyers.

WRRB will register warehouses in all areas producing legumes in order to facilitate and simplify collection of the produce.

The information on the quantity of the produce available in the warehouses will enable TMX to communicate and attract domestic and foreign buyers. We therefore call upon agriculture stakeholders to provide WRS with the required support.