Cashew production in Tanzania

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Map showing areas where cashew nuts are grown in Tanzania

Being one the largest producers in Africa, Cashew nut exports provides Tanzania 10-15% of the country’s foreign exchange. The country is the 8th largest grower of cashews in the world and ranks 4th in Africa. The country provides 20% of Africa’s cashews and only falls behind in production from Nigeria, Cote D'Ivoire and Guinea-Bissau. The country has been engaging in the practice since before independence however, poor regulation and lack of reliable payments to farmers has plagued production. A country 10 times smaller in area than Tanzania, Guinea-Bissau, has a significantly greater yield.

The plant is usually cultivated in the Southern Coastal regions of the country near the towns of Mtwara, Kilwa and Dar-es-salaam. The sale and marketing of the product is run by the Cashewnut Board of Tanzania, through various farmer co-operatives. More than 90% of the exports are destined for India and almost entirely in raw form. The lack of domestic processing firms has cost the country vital foreign revenues and 1000s of jobs. The Government has been struggling to find potential investors to revive the cashew processing industry.

History

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Historical national output of cash crops in Tanzania: Blue-Cashewnuts

Cashew nuts have been growing on a commercial scale in the country since the 1950s. Due to poor infrastructure and lack of jobs in the southern region, cashew cultivation was highly favored. The zone was also previously used as part of the failed Tanganyika Groundnut scheme. The industry peaked production in 1973, where the total output exceeded 145,000 tonnes.

The Industry almost collapsed in the 1980s. The annual production had dropped as low as 20,000 tonnes in 1986. This was largely due to various government interventions in the harvest and marketing processes. The Ujamaa program saw a shift in agriculture from cash crops to alternative crops. Furthermore, mass relocation of people and the collectivization of villages during the 1980s resulted in many farmers abandoning large estates and areas of the crop. The nationalization of cashew nut processing factories also contributed to the almost collapse of the industry as these governmental institutions were poorly run and managed.

Economic reforms began to take place after this collapse to revive the industry and has made a remarkable recovery since then. In just 10 years from 1990-1999, Cashew nut production went from approximately 29,000 tonnes to 120,000 tonnes. This brought in over $US 100 million dollars to the treasury and sparked national interest to further expand the industry. The growth was achieved due to increased trade liberalization and sector reforms to abolish the state monopoly. Furthermore, previous laws enacted by the government that prevented the export of raw nuts was reversed and brought much needed ancillary revenue to the farmers. The falling Tanzanian shilling against the dollar fueled the export industry further and the new private sector investment increased the revenue earned by the farmers. Farmers also began to be paid on time and increased significant output as this was the major barrier that deterred small farmers previously.

Plantation

More than 85% of the farmers are small holder farmers and have an average farm size of 1 hectare. Most farmers are the elderly and rely on manual labour rather than machinery. Most youth from the rural areas prefer to move to the urban areas as cashew farming is less appealing to them. The lack of new blood and new investment in the farms have caused the trees to age and the trees in most locations are very old and have been reducing in yield over the years.

Main production is located in the southern part of the country with Mtwara contributing 70% of the national output in 2011. Other major areas include Lindi (18%) and Pwani (8%). There are some much smaller estates and farms around the country in Ruvuma (4%), Tanga (1%), Iringa and Dodoma.

Tanzania has a competitive advantage on the global market, however the country is struggling to capitalize on the resource. The harvest time for Tanzanian and Mozambique cashews are in the off season for cashews from India and West Africa and therefore is sold when the market prices are higher. Furthermore, Tanzania has one of the largest sized nuts and has a very high natural yield per hectare. In 2010 an average farm produced over 1 tonne per hectare.

Grading

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Workers in Northern Mozambique sorting cashew nuts similar to Tanzania

Grading cashews have been also been an unnecessary debate that has been hurting the industry. Before the liberalization of the industry in 1994, grading of the nuts was done in the villages that sorted the nuts into three categories; “standard”, “under” and “rejects”. However, after liberalization grading was not mandatory and due to the farmers urgency to cash out on the harvest it was often avoided. This caused the revenue per tonne for the farmers to drop consistently as exporters were unaware of the quality. The absence of sorting causes many problems for the industry. One being that unsorted nuts increase transport costs and accelerate the contamination of good nuts as they are mixed together with bad nuts. The absence of sorting also deprives local women jobs who used to get paid to sort the nuts and discourages the farmers from producing high quality nuts as they get paid the same amount regardless of quality. There has been major debate to reform this system, either by reinstating the previous system or to implement a similar system as the coffee board of Tanzania and have quality checks before the nuts are auctioned.

Processing

Over 90% of the national harvest is exported to India for processing. Recently Vietnam also began the purchase of Tanzanian cashew crops however the value was only around 3,000 tonnes in 2001. Currently the country has 3 major cashew processors;

• Olam Tanzania Ltd. (Mtwara | 500 ton/year)
• Korosho Africa (Tunduma, Newala and Mtwara | 2500 ton/year)
• Mohammed Enterprises (Dar es Salaam | 2000 ton/year)

These three processors do not come close to the national output and there has been government interest to revive and open new processing plants. In July 2014, ex-Tanzanian Prime minister Mizengo Pinda, declared that the government was going to spend $US 72 million and revive four processing plants in the south. Plants set for rivival are located in Newalal, Masasi, Lindi and Nachingwea. The new plants will increase the countries processing capacity by 29,500 tonnes.

Statistics

Export of Tanzanian cashew nuts by country

  India (83%)

  United States (5%)

  United Arab Emirates (4%)

  Kenya (2%)

  Other (6%)

Tanzanian Cashew production was first cultivated in the 1950s and the agricultural output peaked in 1972. However, the country has never attained an equivalent output since then it seems it is recovering at a rapid pace. Below are some production statistics from 2005-2011.

Production and exports of cashew nuts in Tanzania
		2005	2006	2007	2008	2009	2010	2011
Production		71,918	77,446	92,573	99,106	76,068	75,366	121,135
Exports		70,667	66,708	69,259	75,888	64,335	63,044	113,374
% of exported production		98%	86%	75%	77%	85%	84%	94%
FOB unit values and volumes for cashew nuts exports in Tanzania
		2005	2006	2007	2008	2009	2010	2011
Cashew nuts in shell	Volume (tonne)	50,598	55,065	58,861	52,747	95,597	102,707	198,851
	Unit value (USD/tonne)	790	670	679	813	715	960	1063
Cashew nuts shelled	Volume (tonne)	1,741	3,825	5,983	7,726	4,940	30,207	34,315
	Unit value (USD/tonne)	3,764	3,893	3,719	3,431	4,482	879	1,018
Source: MAFAP-SPAAA

See also

• Coffee production in Tanzania
• Mtwara Port
• Economy of Tanzania

External links

• Cashewnut Board of Tanzania Website