Tanzania: Co-ops owe cashew farmers 65bn

VARIOUS Co-operative Unions owe farmers 64.7bn/- after buying cashew nut from them.The Acting Director General of Cashewnut Board of Tanzania (CBT), Mr Ayubu Mbawa, told the 'Daily News' that the amount includes 30 per cent balance to farmers who received initial payment of 70 per cent.

He explained that the outstanding 51.2bn/- is the 30 per cent balance of the second payment, while there is 13.2bn/- debt to farmers who have not been paid at all.Due to the piling up of the crop in warehouses, the government has decided to pay the co-operatives through the Bank of Tanzania (BoT) under the export Credit Guarantee scheme.

Farmers sold cashew nut to co-operatives at 1,200/- per kg and traders were expected to buy the crop from co-operatives at 1,750/- per kg. But so far the traders are reluctant to buy from co-operatives on grounds that the world market is saturated and prices have steeply gone down.

There are reports that about 85,000 tonnes of cashewnut worth over 100bn/- are stranded in warehouses of various co-operatives.Tanzania registered bumper harvest of 157,000 tonnes of cashew nut last year, exceeding the 1974 record of 145,000 tonnes. Mr Mbawa listed unions with debts and amount as Tunduru Agricultural Marketing Co-operative Union (TAMCU) 3.1bn/-, Ilulu of Lindi 11.6bn/- and Masasi Mtwara Co-operative Union (MAMCU) 19bn/-.

Others are Tandahimba - Newala Co-operative Union (TANECU) 24.5bn/-, Coast Region Co-operative Union (CORECU) 4bn/-, Dare es Salaam Region  Co-operative Union (DARECU) 5.1m/- and TANGA 2.3bn/-.He said the board would make sure the co-operatives got the required money to setlle debts.

Mr Mbawa said after receiving official communication from BoT the co-operatives would be informed on how and when they should approach the banks and collect the money.Some farmers who were interviewed in Mikindani ward said delay in payment of their dues has brought misery to many of them. Some have been forced to sell houses to settle debts.

Mr Athumani Saburi who sold two tonnes of cashew nut at 30 per cent credit, said he had to sell his house at 1m/- to pay a village community bank (VICOBA) 600,000/-. "They promised to pay us in February, but so far nothing has happened. I used all the money I got to pay for costs associated to farming hoping that the second payment will come early," he lamented.

He said some costs included clearing of the farm, insecticide spraying and buying of implements were secured on credit and have to be paid to VICOBA as agreed according to borrowing terms.He said in the next harvesting season which starts in September he will not take his cashew nut to the Mikindani cooperative society, instead he will sell directly to traders.

Another farmer, Ms Zainab Yusuf,  said the delay in payment was affecting the preparation for the next season which starts next month with clearance of farms. Ms Yusuf who did not know that the government has ordered them to be paid soon, said it was better for farmers to be paid 100 per cent for their crops on the first payment.

"This system is not good for people because some travel from villages to come here and wait for their payments here losing a lot of time and energy," she said.Mr Mbawa said he was optimistic that the move would satisfy farmers after few months of difficulties and the stranded 85,000 tonnes of cashew nut was going to be bought slowly by traders.

Authorities and cashew nut stakeholders in  Mtwara Region have hailed the government for its decision to guarantee co-operatives to borrow money from BoT to pay farmers.Meanwhile, the Chairman of Parliamentary Public Organisation Accounts  Committee (POAC), Mr Kabwe Zitto, has advised the government to repossess all 10 cashew nut processing factories in Mtwara and Lindi because the  investors have gone against sale agreements.

The Kigoma North MP has also urged the government to ban export of raw cashew nut to address the current marketing crisis of the crop whereby nearly 90,000 tonnes worth 110bn/- are stranded. Mr Zitto who visited Mtwara and Lindi last week to study the impact of  privatisation of cashew nut processing factories, told the 'Daily News'  that all factories were turned to warehouses.

The factories were built through a World Bank loan of $184 million (285bn/-) in the late 1970s and early 1980s.Likombe factory in Mtwara municipality was sold to Olam Tanzania. The firm turned the warehouses into a factory and employs more than 2,000  people, while the other investor who was given factory has transformed   it into a warehouse and employs 10 people only.

Source: http://dailynews.co.tz/index.php/local-news/3460-co-ops-owe-cashew-farmers-65bn