Tanzania: Stop all this murkiness: Players want greater transparency in cashew nuts trade

Cashew nut stakeholders have expressed their disappointment over the lack of transparency in the buying and selling of the crop nuts in the country.

They criticised the monopolistic nature of the buying and selling of cashew nuts, calling for immediate solutions to reverse the trend in order to make the business a profitable undertaking for all players in the sub sector.

The monopolised cashew nut market, according to stakeholders, has seen a single trader forming multiple agents just to play with and manipulate the market situation just to hurt farmers and small-scale traders.

The foul play, together with lack of enough cashew nut processing factories in the country, are among the key challenges cited by stakeholders, urging the government and the Cashew nut Board of Tanzania (CBT) in collaboration with other sectors to deal with them.

According to the Agricultural Non State Actor Forum (ANSAF) research findings on Advocating for Effective Regulation of the Tanzanian Cashew Industry, the sub sector needs the markets to be set free to allow free and fair competitions.

Presenting the research findings recently, Mr James Fitzpatrick said cashew nut processors in the country do not have a direct access to buy the crop from the farmers, unless they consult the warehouse system, which has continued to be monopolistic and bureaucratic.

“There is a need for Tanzania to invest in cashew nut processing factories to curb the current problem in which only 15 per cent of the crop is processed locally, leaving 85 per cent being processed outside the country, particularly in India,” said Mr Fitzpatrick.

Exportation of raw cashew nut without processing has seen the country losing $110 million (about Sh176 billion) annually in value addition, and, in the past five years Tanzania, by exporting raw cashew nut, has lost $551 million (some Sh881.6 billion) in value chain.

Researchers say the lost $110 million annually could build enough modern cashew factories to process the crop or buy enough seedlings and deliver them to farmers to double production.

Stakeholders said the closed tendering system in selling cashews from the warehouse system is naturally discriminatory to most people who are interested to participate in the sub sector.

“Small-scale cashew nut processing factories do not have an access to buy the crop from farmers, unless they consult the warehouses receipt system. This has continued discouraging small-scale entrepreneurs’ efforts to invest in the processing business,” said Mr Edgar Majogo, Africa Cashew Alliance vice president.

Mr Majogo was of the view that, with the current liberalised market economy, cashew nut should be sold through the open tendering system as it has been with other cooperatives like coffee and cotton.

The situation is happening in the country despite the fact that Tanzania is considered to be the best country in the world for having a well-documented research on cashew nuts.

“The government needs to strive for transparency in the auctioning system to allow the informed participants to assess the market and the options without political interferences,” said Mr Majogo.

Further, Mr Fitzpatrick noted that investors are unlikely to invest millions of dollars in processing facilities when their supply is decided by an auction, which is inefficient and corrupt, and prone to political interference.

The situation, according to the study, will be alleviated through improving information communication system and education to farmers, especially in the market information and transparency in the auctioning system, instead of the current closed tenders in buying the crop from the warehouses.

He said there is a necessity for the country to build up a secure supply chain where local processors can develop normal supply chain relationships directly with farmers and primary cooperatives outside the auction system.

“The role of the government is to support the key payers in the sub sector rather than doing business as it has been the case with the current situation,” according to the findings.

On the other hand, Dr Rose Mushi, who interviewed farmers, cooperatives and associations in the same study, said that there is a need improve regulatory system and marketing of the crop produced by some of the poorest people in the country.

For his side, the director general for CBT, Mr Mfaume Juma, said Tanzania through the board is setting strategies to improve and strengthen cashew processing, starting with the overhaul of the regulatory frameworks guiding cashew nut sub sector.

Approximately, according to the study, exportation of raw cashew nut makes Tanzania lose about 45,000 jobs annually, a situation that calls for government intervention to encourage investment in processing industries by increasing access to financial services.

Source: thecitizen.co.tz