Summary
· Two years after the new system was implemented to provide local stakeholders with a level playing field, players discuss its success and challenges
Mtwara. Two years on, cashew nut stakeholders share the
success and challenges of the primary marketing system that was introduced to
support local processors.
For a long time, cashew nut trading
has been done through the warehouse receipt system, in which buyers compete in
auctions conducted by cooperative unions.
However, foreign buyers who only
collected raw cashews for export dominated the trading system. This did not
favour local processors, who claimed they could not compete with the exporters
in the auctions.
The government, which plans to see
60 percent of the local cashews processed locally by the 2025/26 season,
introduced the primary marketing system, which allows licensed local processors
to buy raw cashews from the Association of Marketing Cooperative Societies
(Amcos) without competing with exporters in the auctions.
According to the Cashewnut Board of
Tanzania (CBT), the processors must get valid licenses for participating in the
primary market in the particular season and will continue buying in the Amcos
branches even when the main auctions at the cooperative level are ongoing.
Selling cashew nuts through the
primary market is voluntary, the CBT states in this season’s primary marketing
guidelines.
“We are trying to attract investors
in the processing of cashew nuts in Tanzania and allow small farmers to sell
their little produce on time,” says CBT director general Mr Alfred Francis.
Advantages of the new system
The cashews bought in the primary
markets must be locally processed and should not be exported.
The primary market system has had
different impacts on different stakeholders, who narrate both success stories
and challenges in the implementation process.
The CBT plans to increase raw cashew
nut production to 700,000 tonnes in the 2025/26 season, compared to the 236,213
tonnes that were produced in the 2021/22 season.
The board also wants to ensure that
60 percent of the cashews are locally processed by that time. Increased
processing will lead to increased output of other cashew products as well as broaden
the market for cashews grown in the country.
The establishment of an initial
market to allow local processors to buy cashews without competing with
exporters of raw cashews is one of several strategies that have been
implemented to encourage cashew processing in the country in order to achieve
this goal.
The government’s move aims to enable
local processors to get raw materials (cashews) to meet their factories’ needs.
However, there has been a lack of
understanding that has been confusing leaders of major cooperative unions and
the farmers themselves. Ahmed Abbas, the regional commissioner for Mtwara,
expressed disappointment with the farmers’ demand for payment for cashews that
were awaiting sale. He claims that this action could have a negative effect on
the farmers’ ability to make a living.
The RC says it would be wise for
buyers of cashews in the initial market to be known and to make agreements with
growers instead of leaving them in the dark, not knowing where they would sell
their cashews.
“It hurts the farmer, who expends a
lot of energy preparing his farm, harvesting, and then sitting and waiting for
the initial market, about which he is unsure and has no agreement, and now they
start to complain that they have not been paid while their cashews are still
waiting for the initial market and the buyers have fled, this is a problem,”
says the RC.
Small and large-scale processors
The chairman of the association of
large-scale cashew processors, Mr Bahati Mayoma, says the initial market has
not waived the government levies, which are all paid in accordance with the
law.
Mr Mayoma says action would be taken
against buyers of cashews at the initial market, who violate the procedure and
do not pay the legal levies.
“In the last season, for the first
time in a year, through the initial market in Mafia, all cashews were
processed. The auction controls the price to be competitive, but it kills local
industries,” says the chairman.
“The initial market has been
operational for two years. It was introduced after local farmers felt they were
not being treated fairly by the government because cashews are grown in the
country and create jobs here but when it comes to buying the cashews, we are
forced to compete with foreign buyers,” shares Mr Mayoma.
He says more than 10 new factories
have been established, and those that were closed have reopened, bringing new
hope, especially to the locals.
“More than 10,000 tonnes have been
bought in this season, which has never happened in recent years. After the end
of the season, we will add value, but last season 14,000 tonnes were processed
in the country,” he notes.
He says the new system is going to
bring about a revolution in cashew processing as factories have been revived,
jobs have been created, and farmers are now able to sell their cashews at any
time. According to him, this is the right system. He wants action to be taken
against those who violate it.
“So far, more than 23 factories are
processing cashews, whereas in the past there were less than ten factories, but
the initial market has increased investment in the cashew sector in terms of
processing.”
For his part, the chairman of the
Association of Small Scale Cashew Processors, Mr Tumpase Magehema, says they
are yet to benefit from the initial market because many small-scale processors
are processing their own cashews.
“We are yet to benefit from this
market; the procedure is not clear to us as it appears there are two permits,
which means one has to make two applications, something that doesn’t enable
small-scale processors to enter the market,” says Mr Magehema.
Cooperative unions
The manager of the Mtwara Masasi
Cooperative Union (MAMCU) Biadia Matipa, says the cooperative unions support
cashew processing because it adds value to the cashew crop.
He adds, however, that the initial
market has been a problem for them to understand as over 200 tonnes of cashews
are still in primary cooperative societies waiting for buyers at the initial
market.
“In the auctions, we sold 1,400
tonnes of cashews, whereby more than Sh206 per kilo was deducted, but in the
initial market, there is no deduction as the farmer gets his whole money. When
we announced the closing of the auctions, farmers said they would sell their
cashews at the initial market,” says Matipa.
In order to help the farmers, Mr
Matipa urges the Tanzania Cashewnut Board to take immediate action to find
buyers for the unsold cashews.
“Since the value of the unsold
cashews will decrease the following season, many second-grade cashews will have
to be sold at a loss.”
For his part, the manager of
Tandahimba & Newala Cooperative Union (Tanecu), Mr Mohamed Mwinguku, says
the initial market has many challenges and should be improved.
Mr Mwinguku, for example, claims
that they sold 59,000 t last season, of which only 502 tonnes were sold in the
initial market system, and that they were not paid.
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