Guinea-Bissau seeks food aid due plunging cashew price

Aug 8 (Reuters) - The plunging world price of Guinea-Bissau's main export crop cashew nuts has prompted the West African country to seek international food aid to help its hard-pressed farmers.

Cashew production, most of which is shipped to India, accounts for around 90 percent of Guinea-Bissau's export revenues and employs some 80 percent of its population of 1.6 million.

However, lagging demand has seen a government-fixed indicative price fall from 250 CFA francs ($0.51) per kg (2.2 lb) to 75 CFA/kg over the past two years, slashing the purchasing power of rural farmers in one of the world's poorest countries.

Almost half the population is facing food shortages, according to a July report by United Nations agencies.

"Bissau urgently needs short-term food aid to alleviate the shortage of staple foods that has hit the rural population," Soares Sambu, Guinea Bissau's economy and social integration minister, said during a meeting with donors on Wednesday.

Wedged between Guinea and Senegal, Guinea-Bissau has long been plagued by political instability and has become a major transit point for South American cocaine trafficked to Europe.

The country was plunged into turmoil in April 2012 when soldiers ousted interim President Raimundo Pereira and Prime Minister Carlos Gomes Junior days before a runoff election Gomes Junior was favoured to win.

The military takeover led to sanctions and a suspension of aid by donors. Many - including the European Union, once a source of hundreds of millions of dollars in aid - refuse to recognise the transitional administration set up in the wake of the coup.

Sambu said the Bissau authorities were seeking funding for an emergency plan to finance the education, health, food and energy sectors.

However, the head of the cashew merchants' association accused the government of opposing the distribution of 5 billion CFA francs in subsidies to merchants intended to boost farmer prices.

"35,000 tons of raw cashew remain in the villages. (We) require that the transitional authorities release the funds to improve the situation," Malam Nanco said at a news conference. ($1 = 492.4970 CFA francs) (Reporting by Alberto Dabo and Misha Hussain; Editing by Joe Bavier and Michael Roddy)

Source: Reuters