New Kenya cashew sector revival plans revealed

Kenya's once lucrative cashew sector has been struggling under various problems for years. Now there is a new plan to try to revive it. The sector earned $3 million in 2010, compared to $35 million in 1992.

180,000 cashew seedlings are to be distributed annually to farmers for the next five years, along with other kinds of support. The Nut Processors Association of Kenya hopes the current annual production of 10,000 will go up four-fold by 2015.


However, as other African cashew producing countries like Guinea Bissau and Mozambique have discovered, breathing new life into the sector is easier said  than done. Most of their nuts are exported raw by Indian traders who process them in their country and on-export the final product from there. Attempts to discourage or ban exports of raw nuts have often simply driven away buyers, leaving farmers without markets for their produce. 

African Agriculture

Oil, mining investment contributing to decline of Mozambique cashew sector

A sudden new influx of external investment in oil exploration and mining has strengthened the value of the Mozambican currency, the metical, against the U.S. dollar, causing the country's cashew nuts to become too expensive for foreign buyers, who now go to cheaper markets. With a steep decline in buyers, the fortunes of cashew farmers have also declined

From 113,00 tonnes harvested in 2010, only 63,000 tonnes of cashew were harvested in 2011.
 
more...

Olam International to invest $202 million in Ivory Coast cashew, cocoa, cotton

by Baudelaire Mieu

Olam International Ltd. (OLAM plans to spend 100 billion CFA francs ($201 million) on Ivory Coast investments including two cashew factories and a cocoa- processing plant.

The agricultural commodity trader based in Singapore has just opened a cashew factory with 30,000 tonne capacity in the central town of Bouake, the first of three planned in the county for coming years.

Olam also plans to invest 30 billion CFA francs in a cocoa- processing plant in the western town of San Pedro and double cotton growing in the north to 50,000 hectares (123,500 acres).

Ivory Coast’s cashew output grew to 350,000 tons in 2010, according to the latest data from growers’ group Intercajou.

Bloomberg

Tanzania cashewnut farmers demand revival of processing plants

by Felix Andrew

The government has been urged to restore the non-operating cashew nut plants so as to increase the percentage of processed exports of the crop. At present, more than 70 per cent of cashew nuts grown mostly in the country’s coastal regions is exported in raw form.

Farmer Musa Ndunduma said that all the government owned plants are lying idle due to the country’s privatisation policy.

Tanzania’s earnings from cashew nut exports went up 208 per cent in February, the Bank of Tanzania said in its March 2011 ‘Monthly Economic Review,’ bringing a ray of hope to thousands of Tanzanians who engage in small-scale cashew nut farming. During the same period, the volume of cashew nut exports went up by 106.9 per cent from 60,300 tonnes to 124,800 tonnes.The success is attributed to good weather and sufficient rains in the last year's season.

Experts say a viable processing industry could create 30,000 direct jobs and generate USD40 million in incremental processing revenues annually.

Tanzania's cashew industry generates 5 per cent of the country's export earnings - approximately USD70m annually - from raw cashew nut exports.

IPP Media

Mozambique province surpasses cashew marketing target

The northern Mozambican province of Nampula, which is the country's largest producer of cashew nuts, surpassed its marketing target for the 2010/2011 campaign by six per cent, according to the Provincial Governor, Felismino Tocoli.

 Tocoli said that the province has marketed 49,820 tonnes of cashew nuts, against a target of 47,000. This result did not only beat the target by six per cent - it was also a 75 per cent increase on the disappointing figure from the 2009-2010 harvest.

Tocoli added that in order to grant priority to supplying nuts to the local cashew processing industry, and avoid uncontrolled export of raw nuts, staff from the National Cashew Institute (INCAJU) are ensuring that credentials are only granted to exporters who have first supplied sufficient amounts of nuts to the Mozambican procesisng factories.

Tocoli added that 302,231 cashew saplings were distributed to households, schools and associations producers in 2010 - which was 0.7 per cent more than planned. The schools are in a programme entitled "Let's plant more cashew trees."

allafrica.com.

Tanzania seeks to revamp cashew nut sector

by Leonard Magomba

Tanzania is seeking to revamp its defunct cashew nut processing factories to boost production of the crop which brought home $133 million in the year ending February 2011.

Government will also construct more factories, said Hemedi Mkali, the acting Chairman of Tanzania Cashewnut Board (CBT). Most of the former factories that were privatised are not functional in what could be hurting productivity of the sector.

Tanzania’s earnings from cashew nut exports went up 208 per cent during the year ending February 2011, the Bank of Tanzania said in its March 2011 “Monthly Economic Review,” bringing a ray of hope to some 500,000 Tanzanians who engage in small-scale cashew nut farming.

The volume of cashew nut exports went up by 106.9 per cent from 60,300 tonnes to 124,800 tonnes.

“Farmers can no longer export all their nuts, forcing them to sale at low prices. Through value addition, Tanzania will be able to reduce the amount of raw cashew nuts exported and also fetch higher prices,” said Mr Mkali.

Tanzania is Africa’s largest cashew nut grower after Nigeria and Ivory Coast, and the world’s eighth biggest producer. Tanzania’s cashew industry generates at least five per cent of the country’s export earnings.

This is the first time in about four years that production of the nuts has increased. Production has been on the decline since 2007, due to the ageing of the cashew nut trees, a reason given by the Agriculture, Food Security and Co-operatives ministry.

Beno Mahagama, director general of CBT said the revival of the factories and better global nut prices could improve earnings from the crop further.

Tandahimba district in Mtwara was the leading producer during the season. Regions known for cashewnut growing include Mtwara, Lindi, Coast, Ruvuma and Dar es Salaam. Production in Coast region has, however, been dwindling over the years as farmers seem to lose interest in the crop.

According to the Africa cashewnut dossier, Africa’s production share in the world stands at 30 per cent; world production currently stands at close to 1.2 million tonnes.

Following nationalisation of the cashew sector in the 1970s and investment in large-scale production plants utilising inefficient technology in the 1980s, the industry has experienced troubled times.

Analysts say a viable processing industry could create 30,000 direct jobs and generate $40 million in incremental processing revenues annually.

Africa was producing 70 per cent of world cashew nuts between 1950 and 1970, but problems in the industry that during the time led to India’s take over of the position.

The East African

Coconut, cashew projects offer hope for small scale Mozambican farmers

A colonial-era coconut plantation is being revived in southern Mozambique to provide small incomes to a largely cashless rural community, and is being viewed as a pilot project that could be rolled out across poor isolated communities to generate work for hundreds if not thousands of people.

A year after winning independence from Portugal in 1975 the country descended into a 16-year-long civil war, and emerged from the conflict as one of the world’s poorest.

Some colonial-era plantations have survived charcoal burners or other methods of destruction, but remain under-utilized through a lack of investment or the handicaps of poor road and transport infrastructure.

South African farmer Graham Ford has teamed-up with US NGO TechnoServe, with the consent of the Inhambane provincial government – as all land in Mozambique is owned by the state – to revive an abandoned coconut plantation, about 10km from Maxixe.

A small processing factory in the community extracts the meat and oil from coconuts collected by local people and is then transported to the highway by 4WD vehicles where it is loaded onto trucks bound for South Africa.

Coconut products have a ready market in the food and healthcare sectors.

The factory accepts two sacks of coconuts – stripped of their husks – from one person a week, which translates into a monthly income of about 1,000 meticais (US$33.50)

“Until now the local people have not really availed [themselves of] the natural resources around them on a commercial level because they had to take them all the way to the highway [about 10km away]. Here they were only given small sums of money by men who took the coconuts to Maputo,” TechnoServe agricultural consultant Rizwan Khan told IRIN.

He said the key to replicating such an initiative, so the poor derived greater commercial benefit, was to situate factories in or near communities.

Khan said the long-term plan was to support the establishment of similar factories across Inhambane Province that would mirror the Maxixe pilot programme – such is the international demand for coconut oil.

A 2002-2003 government survey identified Inhambane as the poorest of the country’s 11 provinces, with about 80 percent of the population living below the poverty line. However, a survey conducted in 2008-2009 found poverty levels had decreased to 60 percent in the province which was rated as the seventh poorest.

Cashew nuts

Mozambique’s cashew nut industry was severely affected by the civil war and outbreaks of fungal infections among its ageing cashew tree population led to a decline in both quality and quantity.

NGO CARE International is attempting to revive the cashew trade in Inhambane Province through its SEED (Sustainable Effective Economic Development) programme.

CARE’s acting project manager based in the Inhambane coastal town of Vilankulos, Michaela Cosijan, told IRIN cashew nut production was one of the focus sectors, as the resource was being under-utilized.

In partnership with the provincial authorities, a campaign has been launched to plant a new generation of cashew trees across the province, and an insecticide programme introduced to protect the remaining productive trees.

The NGO is also organizing cooperatives for farmers to achieve greater value for their products.

Paulo Johaui Murrouibe, a cashew nut farmer in the Inhambane village of Tsumbo, which has about 3,500 residents, told IRIN: “Previously we sold things as individuals at a low price, and had no ability to negotiate a better deal with the buyers. But now, with CARE’s help, we have become organized as a community, negotiating better sales prices and using better farming techniques.”

Filomena Maiopue, director of the Mozambican Cashew Institute, told local media recently: “Over the last five years, the average amount of cashew nuts marketed has fluctuated between 70,000 and 90,000 tons. But this year’s figure of 112,000 tons is a great victory for the country, since it is the highest figure attained since independence.”

IRIN

Guinea-Bissau cashew trade halted in tax protest

by Alberto Dabo

Cashew traders in Guinea Bissau, the world's seventh biggest supplier of the cocktail snack, went on strike on April 21 to protest a new tax.

Cashews are the biggest revenue earner in the tiny 1.6 million people West African state and the industry employs 250,000 families, mostly through small-scale farming operations.

"We cashew exporters have decided to boycott the current marketing season to protest the payment of a 50 CFA franc ($0.11) per kilogram export tax," said Mamadou Yoro Djamanca, the head of the exporters' association. "We will start immediately to shut down all trading posts and warehouses in Bissau and the interior," he said.

The country's leading opposition party warned the government of President Malam Bacai Sanha of large demonstrations if the tax was not lifted.

Guinea Bissau, wedged between Guinea and Senegal on West Africa's coast, is among the world's poorest countries and is struggling to contain a growing drugs trade. ($1=449.3 Cfa Franc)

Reuters

Cashew prices double in Nigeria, lifted by Ivory Coast tensions

by Sam Olukoya

Cashew prices doubled in Nigeria in the last few months as political tensions in Ivory Coast, Africa’s second-biggest producer, curbed supply of the nuts, an industry official said.

“The price of a metric ton of cashew from Nigeria to the international market has gone up from about $600 to $1,200 since November,” Olatunji Owoeye, president of the National Cashew Association of Nigeria, said o February 17.

Ivory Coast is in the midst of a standoff as incumbent President Laurent Gbagbo refuses to cede power to Alassane Ouattara, the internationally recognized winner of a Nov. 28 election. Ouattara and the Cotton and Cashew Monitoring Committee, which tracks Ivory Coast’s cashew industry, have called for a halt in exports of the nuts to cut off funds to Gbagbo.

“The situation in Ivory Coast has reduced access to the country’s cashew nuts, so there is pressure on countries like Nigeria,” Owoeye said. “Buyers who fear that the political crisis in Ivory Coast would get worse are quickly scrambling for Nigeria’s cashew.”

Declining production in countries such as Vietnam and higher world food costs also helped to boost cashew prices on the global market, he said.

The nuts are among the main non-oil export commodities from Nigeria, Africa’s top oil producer, along with cocoa, leather and rubber, according to the country’s Export Promotion Council.

Businessweek

Kenya cashew nut farmers brace for losses amid export ban

by Githua Kihara

Kilifi farmers are bracing themselves for substantial losses as the cashew nut harvest gets under way following government delays to provide alternative marketing channels after banning raw exports last year.


Farmers incurred heavy losses last season due to the ban that pushed them into middlemen’s hands, leading to a price collapse.


According to market analysts, exports accounted for more than half of raw cashew nut sales.


The ban was intended to attract investors to set up cashew nut processing units in the country, but the low volumes of nuts produced meant a factory of viable capacity could not be established. Kenya produces only 11,000 tonnes per year.


According to Kenya Cashew Nuts Processors and Exporters Association chairman Samuel Varghese, processors have shifted to Tanzania and West Africa where there is abundant supply of nuts and little local value addition.


The government, however, was betting on Kenya’s high quality nuts attracting processors keen to supplement their operations in Asia with a premium product.


A task force that recommended the ban also proposed that the National Cereals and Produce Board (NCBP) become a buyer of last resort and market regulator as is the case with maize and wheat.


No funds were channelled to NCPB for this task, giving middlemen a field day as they bought the nuts at Sh20 per kilogramme, about a third of the price prevailing before the ban.


“The government must this time round move swiftly to protect farmers from fluctuating prices,” Lake Kenyatta Farmers Co-operative Society chairman Patrick Gikaru said.

The society buys nuts from its 4,000 members, at Sh37 per kilogramme, and delivers about 10 tonnes to processors in Central Kenya.


Farmers in leading cashew nut producing areas of Lamu and Kilifi are still holding some nuts from the previous harvest.


In May, an effort by the government to cushion farmers through a three-month export window flopped when exporters said they had enough stocks from the previous season’s bumper harvest.

Business Daily Africa

US nuts company trains African cashew farmers

by Melanie D.G. Kaplan

Planters, the century-old nut company best known for its dry roasted peanuts, is teaching sustainable farming to cashew farmers in Africa. I talked recently with Steve Dumas, Planters’ senior associate brand manager.

Tell me about Planters’ history of sustainability.

Sustainability has always been embedded in the brand. It’s the reason our name is Planters in the first place: We work with farmers, or the planters.

I never realized that’s why it’s called Planters.

Most people don’t.


When was Planters founded?

1906. Sustainability has always been important to us. We think of the farmers as the original environmentalists. They know that keeping the land healthy is important to their future. In essence, they are living our definition of sustainability, which is meeting the current needs while being mindful of future generations.

We look at this as a sustainability journey. It’s not like “mission accomplished;” we think about it as an ongoing thing.

I understand you’re working with African cashew farmers.

We’re a founding member of the African Cashew Initiative, and we also work with the African Cashew Alliance and the Bill & Melinda Gates Foundation. We’ve all come together to improve the livelihood of African farmers. Africa is the largest producer of cashews in the world. They employ 2.5 million farmers.

Does Planters have a market there?

We don’t sell cashews there.


Do you sell any nuts in Africa?

Not that I’m aware of. We’re looking to support the farmers. To date we’ve educated over 60,000 farmers on how to improve the yield of their crop. Our goal is to reach 150,000 farmers. These farmers actually have pretty large families, so you’re helping the families and helping entire communities. I was in Mozambique, and we started filming a documentary to raise awareness of this. One guy I met, Rosario, has nine children. His own father wasn’t able to send any of his kids to school, and thanks to cashews, he’s able to send all his kids to school.

We visited the school, of 900 students in two sessions. We asked the kids, “Do any of you have parents who are cashew farmers,” and about half of them rose their hands. You start infusing money in these communities, and it makes such a difference

What are you teaching them to improve yield?

How to get more trees, create cashew nurseries, implement better agricultural practices.

What percentage of your cashews come from Africa?

I don’t have the exact number. In prior years we weren’t able to procure any. This is the first year. We’re committed to procuring over $20 million over the next few years.

Where did they come from before?

The other big countries are Brazil and India.

What kind of improvements have you made on the production side, in terms of sustainability?

We’ve been doing a lot behind the scenes. There’s peanut breeding—you cross-pollinate to try to create strains that are more disease resistant so you use less pesticides.

Precision agriculture—we’re starting to use a lot of computers and satellites to optimize crop development. They put sensors on the field that track nutrient levels and moisture levels, so you can be more precise in how you use resources.

Smart Planet

Gambia hosts cashew sector meeting

Stakeholders in Cashew production in Africa are meeting in the Gambian capital, Banjul, under the auspices of The African Cashew Alliance (ACA). According to the organizers, the meeting which brought together participant from across the industry, seeks to sensitize buyers, traders, as well as processors of the commodity on the significance of the umbrella body of the African Cashew Alliance, in a bid to have Gambians join a national chapter of ACA.

Participants, who include local Gambian cashew farmers, are also discussing the possibility of the country to host the 5th annual ACA conference, slated for June next year.

Cashew nut is widely seen as a potential for economic growth and employment, increasingly seen as potential alternative cash crop on the continent. It production is striving well in a number of countries in the sub region thanks ideal climate with good drying conditions. African countries produce more than one third of the world's cashew. Ivory Coast is said to be the single largest producer of the commodity in the World, with an estimated 320,000MT being its 2008/2009 production. Guinea-Bissau and Tanzania also rank among major producers in the world.

The ACA has been plying a major role in ensuring the full realization of the potential by those involved in the fledgling industry. It has benefited from a funding by the US Department of State for Agriculture, to support capacity building in the cashew sector.

The US ambassador to the Gambia, Barry Wells, told the Banjul meeting that "To stress the United States government's efforts to continue in supporting this rapidly growing crop in Africa, USAID has recently given the ACA U$146,000 to improve access to finance for cashew businesses in the region."

The training, he added, is done with the goal of maximizing the income and capacity of 50,000 cashew farmers and their families.

Christian Dahm of the African Cashew Alliance based in Accra, Ghana, said their objectives, amongst others, are to increase farmers' income, process quality and quantity and to improve the regulatory environment, in a bid to increasing consumption. He described Africa as the biggest producer of raw cashew nuts, providing 300 to 1,200 all year round employment in rural areas.

Gambia based Indian diplomat, Ram Mohan, heads the country's ACA chapter and he disclosed that their primary aim is to build an alliance that would work together in a public-private manner, in an effort to add value to and promote African cashew nut.

He pointed out that a number of fourteen African countries produce close to half of the world's raw cashew, estimated at 700, 000 - 800,000 tons out of 1.8 - 2.0 million tons worldwide in 2008.

"The ACA promotes the idea that by adding value to the Cashew nut within Africa, it will provide the continent with more revenue. This can help in improving the African Economy and more importantly, in Poverty Alleviation", he said.

He added, ''The ACA endeavours to support the cashew sector to increase stakeholder income by adding value from the farm planning stage, seed and variety selection, planting, grafting, pest control, harvesting, post-harvest management, raw nut trade management, effective transport and storage, processing and eventually to the marketing and export of African cashew kernels and its by-products.''

NGO News

Guinea Bissau farmers urged to diversify beyond rice, cashew

Aid agencies are encouraging communities to diversify their agricultural production in Guinea-Bissau, where 90 percent of farmers grow rice or cashews to survive, making them vulnerable to erratic rainfall and price fluctuations.

“The rains sometimes come very early, sometimes stop very early, so there’s a problem with rice,” said the Food and Agriculture Organization’s (FAO) programme manager in Guinea-Bissau Rui Fonseca. “And price fluctuations make cashews uncertain…We are telling producers you can continue with rice and cashews but you can plant other things too.”

Farmers can attract more consistent prices with other crops, said Fonseca. Tomatoes and carrots currently sell at US$2.30 per kilogram in the capital Bissau.

FAO and the International Committee of the Red Cross (ICRC) run programmes aimed to help farmers cope with shocks and boost their cash-crop income while promoting nutritional diversity.

Average income in Guinea-Bissau is $1.30 per day, according to the UN.

FAO, prompted by the food price crisis, has been encouraging farmers in Oio and Bafata regions to grow millet, taro, peanuts and green beans since mid-2008.

Raw cashews which currently sell for 28 US cents per kilogram, down from 60 cents earlier in the season, do not yield enough income for farmers to live on, said Safietou Sanya, president of an ICRC-supported market gardeners association in Three Kilometres village, 3km from the northern city of San Domingos in Cacheu region.

ICRC works with village associations in the region, planting gardens, building wells, training people in gardening techniques and distributing seeds, said ICRC’s Guinea-Bissau programme manager Alfa Diallo. In Three Kilometres rows of lemon, avocado and mango saplings are lined up for sale at $3.40 a plant.

“This year I was able to save enough money through [the garden] to send my children to school,” said association president Sanya. She and fellow members planted and sold onions, peppers, cabbage, okra and tomatoes this year, she told IRIN.

Die-hard habits

But despite the potential benefits of moving beyond cashews, aid groups encounter reluctance among some farmers to change the crops they grow – or eat, ICRC’s economic security adviser Ilda Pina told IRIN. “All they have known is rice and cashews….To change people’s habits is very difficult; we have to move very slowly.”

Some ethnic groups in Guinea-Bissau do not eat tomatoes or green beans, she said. “It is not in their tradition.”

The government estimates that 20 to 30 percent of inhabitants in the north are moderately malnourished, though many northern communities supplement their staples with nutrient-rich wild foods such as palm oil, baobab fruit, cashew fruit and tamarind, according to Pina.

Aid agencies encourage farmers to eat the vegetables they cannot sell.

Even with diversification a number of challenges remain for farmers in the region. Three Kilometres is near San Domingos, but approximately half of the vegetables produced by farmers in villages further north go to waste because members cannot reach nearby markets, said Sanya. The route connecting villages north of San Domingos is a dirt track that is impassable for much of the six-month rainy season.

IRIN

Gates Foundation grant to cocoa farmers in child labour controversy

by Kristi Heim

When the Bill & Melinda Gates Foundation granted $48 million last week to help West African cocoa and cashew farmers, it stepped into an industry that has a bitter history with child-labor problems. Its $23 million grant to a cocoa-industry group is raising questions about labor rights.

The foundation said it will give $23 million to the World Cocoa Foundation and $25 million to a German development agency, Deutsche Gesellschaft fur Technische Zusammenarbeit, to help farmers in West Africa improve production and obtain higher prices for their products.

The nonprofit World Cocoa Foundation represents 70 chocolate companies, and many have not lived up to an agreement they signed to stop the worst forms of child labor in their cocoa-supply chains, the International Labor Rights Forum contends.

West African farmers, including young children, supply 70 percent of the world's cocoa, earning just $30 to $110 a year, according to the International Institute of Tropical Agriculture.

Almost eight years after the major chocolate companies signed an agreement called the Harkin-Engel Protocol, they have not instituted programs to ensure that they are complying with international labor standards, says Tim Newman, the labor forum's campaigns assistant in Washington, D.C.

Richard Rogers, the Gates Foundation's program officer in agricultural development, said commercial involvement is necessary for the project to succeed. By having the private sector directly involved, farmers can have a clear understanding of what the market demands. Companies will contribute technical and managerial skills and resources to help farmers develop better seed varieties and plants and post-harvest handling methods, he said.

Rogers said he chose the World Cocoa Foundation for the grant because "they have the best network of connections with governments, NGOs [nongovernmental organizations] and corporate partners we feel are critical to this project."

Bill Guyton, president of the World Cocoa Foundation, said farmers lack "practical knowledge and organizational support needed to grow this unique crop profitably and sustainably."

With the new Gates partnership, "we will be able to dramatically expand our efforts to reach these farmers in West Africa and to promote economic and social development, as well as environmental conservation in cocoa-growing communities."

Historically, the cocoa companies have worked "in silos," Rogers said, but the Gates Foundation has tried to play a role in bringing them together for the first time, "getting all these companies to share their best practices and technical innovations to have maximum impact."

Hershey, Kraft Foods and Mars, along with Archer Daniels Midland and Cargill, were among those contributing $42 million in cash and in-kind donations to the Gates project. Starbucks was also one of the corporate sponsors. Those contributions "enable our dollars to go twice as far," Rogers said.

The goal is to drive up income for the 2 million small farmers in the region who earn a living through cocoa production. By addressing the root cause of child labor — low income — "that will be a huge benefit and help solve this problem."

The project aims to help about 200,000 cocoa farmers in Côte d'Ivoire, Ghana, Nigeria, Cameroon and Liberia double their incomes by 2013.

"When families are very poor and struggling to get food on the table every day, they need the whole family to chip in and work on farms to feed themselves," he said. "One of first things farmers do when incomes improve is send their kids to school."

Others say unfair trade policies lie at the root of the problem.

Stephanie Celt, director of the Washington Fair Trade Coalition, said she agrees with the message the Gates Foundation is sending that "current free-trade policy is not bringing promised benefits to many family farmers and agricultural workers around the world."

However, she added, "we hope that the foundation will also recognize that programs such as this one only have a chance of creating long-term benefits if they are partnered with more comprehensive reforms to the trade policies that are keeping many agricultural workers in poverty."

The Cocoa Foundation will re-grant virtually all the Gates funds to three nonprofits working in Africa, Rogers said, after taking a small amount to cover the cost of hiring a project director, coordinator and finance specialist.

Most of the companies have signed on to the International Cocoa Initiative and are working on its goal to end the worst forms of child labor, Rogers said.

"Certain groups will always feel there could be more done," he said. "As long as companies are abiding by their commitments and putting effort toward ending child labor, we feel satisfied with that."

Seattle Times

Gates Foundation to assist cocoa, cashew farmers

by Kristi Heim

West African farmers, including young children, supply 70 percent of all cocoa, satisfying the world's cravings for chocolate while staying on the verge of starvation themselves. Annual incomes average $30 to $110 per household member, according to the International Institute of Tropical Agriculture.

In West Africa, farmers might get half of the international cocoa price, while in other countries farmers are getting up to 90 percent of that price, says Rajiv Shah, agricultural development director at the Bill & Melinda Gates Foundation.

Trying to raise the margins for farmers, the foundation is giving $23 million to the World Cocoa Foundation, a non-profit industry group of 70 companies, in a partnership to improve productivity and market access.

Some of the World Cocoa Foundation's members, including Hershey and Mars, have been criticized by the International Labor Rights Forum for failing to honor their commitment to ending child labor and ensuring transparency in cocoa supply chains. Here is the 2009 company scorecard.

Hershey, Kraft Foods, and Mars, along with Archer Daniels Midland and Cargill, were among those contributing $42 million in cash and in-kind donations to the Gates project. Starbucks was also one of the corporate sponsors.

The money will go toward hiring local extension workers to train farmers and provide much needed technical and management support.

The five-year project will reach about 200,000 small cocoa farming households in Cameroon, Cote d'Ivoire, Ghana, Liberia, and Nigeria, with the goal of doubling their incomes by 2013, says Shah.

While farmers in Malaysia produce 800 to 1,000 kilograms of cocoa per hectare, those in Ghana and Cote d'Ivoire produce 200 to 500 kilograms per hectare, he said.

"We can double or triple that just by improving the use of best practices, appropriate fertilizers and better tending to the trees," Shah said. "That's a big output gain."

West Africa produces a third of the world's cashews, but the lack of processing facilities in Africa makes the market inefficient and denies Africans the economic benefits of jobs in the sector.

With a $25 million Gates grant to the German development organization Deutsche Gesellschaft fur Technische Zusammenarbeit (GTZ), the cashew project aims to help 150,000 small cashew farming households in Benin, Burkina Faso, Cote d'Ivoire, Ghana, and Mozambique increase their incomes by 50 percent over the next three years.

GTZ will lead the cashew project with assistance from the African Cashew Alliance (ACA), FairMatch Support and TechnoServe. Financial supporters include Kraft Foods and Costco Wholesale.

The roots of the problem of poverty behind sweetness are related to free trade, structural adjustment, and corporate control, says the group Global Exchange, which promotes fair trade products.

Prices are low because "major chocolate and cocoa processing companies have refused to take any steps to ensure stable and sufficient prices for cocoa producers," the group said.

Fair trade advocates may take a dim view of the program, considering that fair trade is not the aim of the corporations involved.

World Cocoa Foundation President Bill Guyton says the Gates-funded program is "looking at improving environmental, economic and social aspects of growing the crop," but that his group "does not get involved with certification of products."

Still there is one thing that both sides can agree on as a benefit: cutting out the middleman.

Seattle Times

Benefits of Kenyan ban on export of raw cashew hampered by lack of processing capacity

Kenyan farmers have criticised a ban on raw cashew nut exports by the government, saying it would have no impact due to lack of processing capacity.

Agriculture minister William Ruto imposed the ban recently, arguing that farmers would fetch better prices if the nuts were processed before export.

“At the moment we sell nuts at Sh55 a kilo, but with few buyers prices will fall,” said Ms Fauzia Kassim, a Kwale farmer. She said there were no cashew nut processing factories in Kwale.

However, farmers in Lamu are hopeful that the ban would encourage small-scale processors, but asked the minister to intervene in addressing other challenges facing the sector.

According to Mr Gathende Gachanja, a consultant on agriculture who has done extensive research on cashew nut and coconut production at the Coast, Mr Ruto erred in issuing the ban without first building capacity and supportive infrastructure. “We are all for value addition and we agree that farmers should be able to fetch better prices for their produce. But what is the rationale in banning export of raw cashew if there is no processing capacity?” he asked.

He said that there was need to set up a committee to determine the challenges farmers faced, including cost of farm inputs and production levels before even thinking of effecting the ban.

The country has the potential of producing over 30,000 tonnes of cashew nuts per year, but the current production stands at barely 10,000 tonnes per year, Col (rtd) J K Nzioka, the operations director of Kenya Nut Company said. There are no high yielding and early maturing varieties in research centres, he said.

The region relies on cashew nut trees that are over 40 years old, well beyond their optimal production levels. Other factors contributing to the low production include poor crop husbandry leading to high disease and pest incidents, inadequate training of farmers, lack of extension agents on nuts management, high cost of farm inputs and equipment and competition from other crops, Mr Nzioka said.

When the Kilifi cashew nut factory collapsed in the 1990s, farmers were left with no option other than to sell raw nuts to agents who export them to Tanzania and India for processing.

Business Daily Africa

High cashew prices helping Senegalese separatist movement

The soaring price of cashew nuts in Senegal’s restive southern region of Casamance is lining the pockets of armed rebels, according to Ismaïla Diédhiou, an agricultural expert who works at the local development association ASPRODEB.

“Insecurity has also risen in the forests where cashews are grown towards the Guinea-Bissau border, which has benefited the rebels who collect the nuts themselves to sell,” Diédhiou said.

Since March the price of cashews has shot up from 29 US cents per kg to 94 US cents now,"the highest price in ten years,” said producer Aliou Coly. The price rise was caused by a small harvest, improved quality of the nuts, and the removal of fixed prices, according to experts.

Damien Manga, a member of the rebel group the Movement of Democratic Forces in the Casamance (MFDC) confirmed that rebels benefit from selling cashew nuts. But he says they only use the money to cover their living expenses – not to buy the weapons they use to hijack tourist buses or the machetes the MFDC used earlier this year to slice off the ears of up to 20 peasant farmers who had ignored a warning from the rebels to stop collecting cashews.

“We collect cashew nuts to sell like everyone else. It is through cashew nuts that we can afford to buy clothes or shoes and take care of our daily needs,” he said, adding “[This year] I got over a tonne of nuts, which meant I could repair my motorbike.”

Manga blamed violence near cashew orchards on the Senegalese military which has a heavy presence in the break-away region, claiming they too profit from the cashew trade. Lieutenant Malamine Camara, Senegalese military spokesperson in Ziguinchor, denied the allegation.

“Our mission is to ensure the safety of people and goods in this region. We never engage in profit-making activities, and we execute our mission by the rules,” he said.

While a handful of farmers and rebels are profiting from the high prices, for the peasants who are too afraid to access their land, 2008 is as bad a year as any other.

“Most of our orchards are on land that is exploited by the rebels. We still don’t dare go there because of the landmines and the armed men,” said producer Bacary Sane, who owns trees near the Guinea-Bissau border.

IRIN

Project attempts to reduce role of middle men by assisting farmers to value-add

The Common Fund for Commodities plans to spend more than $100 million over five years helping farmers in the developing world to process their crops for added-value exports.

The money is aimed at millions of small-scale farmers in mainly Africa, South America and Asia who often have no choice but to sell their crops for a steal to middlemen, who have connections to outside markets.

"Food security in poor nations is not just about growing food, it's also about generating income so you can have access to health care and education which healthy workers need," said Ali Mchumo, managing director of the Common Fund for Commodities (CFC).

The idea is to shorten the supply chain by removing brokers, enabling poor agricultural producers to sell directly to retailers and supermarkets for a higher price.

One initiative will enable Tanzanian and Ugandan coffee farmers to supplement their income by growing fruits that are used as ingredients in locally manufactured juices.

In Mali, Burkina Faso and Tanzania, another project will build world-class laboratories to test the quality of cotton produced in Africa.

Already underway in Tanzania’s eastern Tanga region is the first-ever, large-scale factory to convert sisal residue to biofuel, which is generating about 150 MW of electricity a day.

Tanzania is the world’s second-largest producer of sisal, a plant used to make rope, yarn and carpets among other manufactured items, behind Brazil and tied with China.

"The best help we can ask is that we utilize more of the plant for products of high value. Then we'll be able to increase the value of the plant," Salum Shamte, owner of Katani Ltd. which is operating the biofuel factory. "In that manner, the returns for the farmer will be higher."

The global food scare this year has thrown a spotlight on the plight of 450 million smallholder farmers and 850 million starving or malnourished people in developing nations. Sharp increases in food prices due to higher demand for biofuels and from rapid growth in places like China and India has hit the poorest nations the hardest, said Guy Sneyers, the CFC's chief operations officer.

The World Bank has warned the doubling of prices for wheat and corn over the past few years could mean another 100 million people may face hunger or starvation. In the midst of this crisis, the focus of international donors has finally shifted to boosting agriculture, a sector that has been neglected for decades, Sneyers said.

Ideally, poor nations will focus both on growing their own food to reduce the threat of hunger, as well as tapping into international markets to get much-needed export revenues from agriculture, he said.

"Farmers need to sell something with value addition to earn money," said Sneyers. "Cassava is a food crop but you can also use it to make cassava chips, animal pellets or ethanol."

Producers in Tanzania agree they are being denied higher profits by selling unprocessed commodities.

Cashew farmers want to export roasted nuts, not just the raw variety, and higher-value products like butters and chutneys, said Peter Masawe coordinator for the Regional Cashew Improvement Network for Eastern and Southern Africa based in Tanzania’s southern city of Mtwara.

"What our industry needs now is to concentrate on the value chain. If we don't process there is no way the cashew industry will ever change here," he said.

The story is the same for Tanzania’s cotton growers, says Elizabeth Kimambo, who helps run the Common Fund for Commodities’ Dar es Salaam, Tanzania-based office.

"Most farmers want their own ginnery to sell the end product for better prices and to process other things like cottonseed oil," she said.

The commodity boom is a golden opportunity for farmers, especially of cash crops such as coffee and tobacco, to boost production and improve their livelihoods, said Caleb Dengu, a project manager with the Fund.

"What we need is, for example, coffee farmers to continue to focus on their crop and not try and shift to food crops. Some will be tempted because of the global food shortage," he said "They should concentrate on making money through coffee and then they can still be able afford to buy food."

IPS

Cashew in Mozambique: a model of international development gone wrong

The drive to this port city where the Limpopo River meets the Indian Ocean is lined with cashews.
First come the vendors with their cashew-filled buckets, waving at cars with the tin mugs used to scoop $2 portions. Then, the women who sit behind wide reed baskets piled with the nut – they’re quiet and calm from a distance, but ready to pounce on any car that stops, crowding, insisting upon their products’ superiority.
Closer to town are the large branches stuck vertically into the dusty ground, draped with bags of cashews and looking like some sort of modern art Christmas trees. Sellers wave at passing cars; young boys plead with drivers to buy.
Along this road, it seems, cashew is king. But in a nation that once was the world’s largest cashew producer, the king is a mere shadow of its former self.
On the other side of this bustling city of faded Portuguese buildings, Derek Higgo sits in the empty boardroom of his Mocita cashew processing factory and sighs: “Everything you see on the road there – it’s subsistence. It’s actually quite a sad situation.”
Ten years ago, Mocita was the largest employer in Xai Xai, with 1,500 workers processing thousands of tons of cashews a year – part of a nationwide effort to regain Mozambique’s dominance in the cashew industry. But today, Mocita is quiet – a model not of economic resurgence, says Mr. Higgo and many others, but of international development gone wrong.
The story of the cashew is, in many ways, the story of modern Mozambique and many other developing countries. It is a tale of colonialism, commerce, and war, and of the perils – and potential – of aid.
It is a contested story, and, in Mozambique, still a highly emotional one. But what is clear, regardless of one’s position, is that the legacy of the cashew looms large.
The cashew itself is an ornery nut to crack. Its kernel grows on the green, shady cashew trees cultivated along Mozambique’s 1,500-mile coastline. It is encased in a hard shell so acidic that it can burn through fabric and damage skin. Getting to the tasty part is no easy task.
One method is to heat the cashews in a tin over a fire until the cashew oil ignites and the shells split – that’s the preferred method of most subsistence cashew sellers. Another way is to freeze the nuts in liquid nitrogen and crack them. The Mocita factory heated the nuts in a 195 degree Celsius oven, spun them in a centrifuge, dried them, and blew off the remaining shells with compressed air. These days, inexpensive hand processing is back in favor.
Mozambique was the world’s top cashew producer when it won independence from Portugal in 1975. More than a dozen large factories using mechanical processes to remove the kernel turned out 150,000 to 200,000 tons annually.
But civil war soon engulfed the country and decimated the industry. By the time of the country’s peace agreement in 1992, the ruling government was courting private investors in hope of reviving the cashew economy. It had also planned a massive cashew tree-planting campaign (kernel yield decreases as cashew trees age) and put a high tax on cashew exports to encourage local processing.
“It made enormous sense from the country’s point of view to invest in cashews,” says Higgo. “Cashew trees were growing. The population knew what to do. It was a dollar-earning export.”
And businesses like his were keen to get a piece of the action. The Anglo American Corporation had operated Mocita from the 1960s through the early 1980s, when the war made it impossible to continue. After the peace accord, Higgo says, the company was eager to return. It spent millions of dollars to revamp the factory, which Higgo and other investors later bought, and started producing cashews.
But in 1995 the World Bank changed the playing field. The Bank, which was heavily involved with Mozambique’s rehabilitation and in control of much of the government’s access to aid money, decided that it would be more beneficial to Mozambique to export raw cashews without processing. This decision fitted in with the Bank’s inclinations toward economic liberalization, bolstered by a sense that the large, often foreign-owed, cashew factories here were exploiting Mozambican workers.
Former President Joaquim Chissano contends that the World Bank told Mozambican officials to end protective tariffs on cashews or face cancellation of hundreds of millions of dollars in loans. Although bank officials denied coercing the government, Mozambicans at the time made it clear they were cutting taxes only grudgingly. Factory owners also protested, saying that they’d been promised industry protection.
The price of raw cashews did rise, as primarily Indian buyers came and offered higher prices for the nuts than Higgo says local factories could buy them. So factories like Mocita started closing.
“Despite renewed hopes, the industry was killed again by World Bank and IMF zealotry in imposing a free trade policy,” wrote Mozambique scholar Joseph Hanlon in his book, “Do bicycles equal development in Mozambique?” “Cashew became one of the emblematic examples of harmful policies imposed on poor countries….”
Later, the World Bank officials acknowledged that they’d tried to do too much, too fast, but maintained that the mission of liberalization was sound and did improve the livelihoods of cashew farmers.
In their report, “When Economic Reform Goes Wrong: Cashews in Mozambique,” professors from Tufts, Stanford and Harvard universities said that Mozambique gained about $6.6 million annually from the lowered cashew export restrictions – an amount almost entirely negated by the costs of unemployment from closed factories.
So emotional is the cashew business here that TechnoServe, a nonprofit that tries to find business solutions for rural poverty, almost avoided it altogether. But, says Jake Walter, TechnoServe’s Mozambican director, there was no avoiding the profitability that research suggested the industry holds.
“We decided it was so important to so many peoples’ lives in Mozambique that we should tackle it, even though it was a very hot issue and there was this ideological argument around it,” he recalls. If smaller-scale factories locate closer to rural cashew stands, and if these smaller factories form cooperatives in order to fill the large container orders that are the bread and butter of the industry, industry-wide profitability is possible, Mr. Walter says.
TechnoServ helped a few entrepreneurs set up small factories as well as financing from USAID and other groups.
Now, in the country’s “cashew triangle,” a section of northern Mozambique where these new-style factories are most common, more than 6,000 cashew-related jobs have been created in the past six or seven years, Walter says. According to the government’s Cashew Promotion Institute, Mozambique produced 95,000 tons of cashews in the recent harvest; it says that two-thirds is processed in-country by factories and subsistence farmers.
Meanwhile, the government refused to cut taxes further on cashew exports – giving the smaller fledgling factories a bit of protection.
“I think this is important for development,” Walter says. “The kind of life that’s been created in the cashew industry is different than it was before, but I think it’s qualitatively better.”
Here in Xai Xai, however, it’s hard for residents to share that sentiment.
Past the Mocita gates where trucks filled with cashew nuts once lined up to make deliveries, it’s eerily quiet. Most of the people fired from the factory never found new work, people here say.
One of the few employees left from the massive 2001 layoffs, security guard and former soldier Mario Fernando Raimundo, recalls: “You’d hear the noise of the machines, the noise of people singing while they were working. It was producing, bustling.
“That’s over now.”
But he smiles when he talks about the diminished “king”: “Ah, the cashew,” he says. “When you see the cashew, your stomach sings.”
Though his cashew factory stands silent, he says he eats the nuts regularly – buying from the subsistence sellers on the street.
CS Monitor

African cashew industry continues to grow

The African cashew industry is poised to expand as interest and investment fuel growth in the international cashew market.

A recent meeting and a planned meeting are just two indications of the industry’s expansion: In June, the Bill and Melinda Gates Foundation brought industry stakeholders together in Frankfurt, Germany, to discuss a recent study of the industry and identify ways to address challenges. And in September, the African Cashew Alliance will hold its third annual conference in Tanzania.

“From that workshop we refined a project outline and we got a stronger commitment from all the partners to work together,” said Rita Weidinger of GTZ, the German Development Corporation, which may implement projects financed by the Gates Foundation to improve the industry. At the Gates foundation meeting, stakeholders based their discussions on a study produced by Dalberg Global Development Advisors.

Expanding cashew production is attractive in many respects: Cashew cultivation is environmentally friendly, and the cash crop provides critical supplemental income to farmers and their families. There is also an exceptional opportunity to process cashews in Africa, as opposed to shipping the raw product away for processing.

In Burkina Faso, for example, foreign buyers from other West African countries and around the world bought practically all of the unprocessed cashews this year, said Minata Kone, general director of Sotria-B, a cashew processing company.

“I don’t know what happened on the international market, but people came to buy everything we produced here,” Kone said. “We don’t have anything to process. That is the crucial problem we are facing today.”

The same issue affected Nigeria’s Abod Success Investment, but its general manager said financing would allow his company to resolve that problem.

“Financing the deals is the key issue for us,” said Tunde Odunuga. “We need to be able to buy and stock cashew for later processing. If we had financing, we could do this.”

Local processing is recognized by many as a particular opportunity for the African cashew industry. Very little of the cashew grown in Africa is actually processed on the continent; most of is shipped to India where it is prepared for consumption.

“We need to train producers to have a high quality product,” Kone said. “And then we can process well.”

Cashews also have not been as aggressively marketed as other snacks, which could add significant value.

Designing and implementing interventions to resolve industry challenges like these would be the primary goal of the project financed by the Gates Foundation.

In the workshop in Germany, stakeholders reviewed the Dalberg study of the cashew industry and began to discuss what interventions could be undertaken to address priority issues. GTZ proposes a value chain approach to improving the sector.

“All partners were very pleased with the workshop," said Rita Weidinger of GTZ, which organized the meeting. “Most of all, the private partners are more committed to partner any intervention in the sector.”

Each challenge is an opportunity – and an indication of a growing industry, said Vanessa Adams, director of Enterprise Development at the Trade Hub.

“There are lots of difficulties, but there are solutions and there are always successes,” said Adams after a recent visit to cashew producers and buyers in Burkina Faso. “That’s why you need somebody as tenacious as Mrs. Kone and buyers as committed as Global Trading and institutions supporting it all.”

All together, targeted interventions could increase farmers' incomes by over 100 percent, the Dalberg study estimated.

The Trade Hub has helped make the cashew industry’s challenges manageable by bringing together a wide variety of industry stakeholders. In 2005, stakeholders created the African Cashew Alliance to move the industry forward. Its third annual conference will bring together industry insiders from across the continent and from around the world.

“We are very excited about this international cashew gathering in Dar es Salaam,” Adams said. “Last year in Mozambique, we could see partnerships and deals being made before our very eyes. Many people have already expressed interest in participating.”

The African Cashew Alliance is a dynamic group that shares information and ideas about producing, processing and marketing cashews, which ultimately will create jobs and economic development.

WATH