Are Tanzania’s cashewnut brokers back in business?
Saturday April 06 2019
Last year, Tanzanian government put in place a verification system to guarantee the legality of the claimants of the cashewnut crop in the leading producing regions. FOTOSEARCH
A long-standing dispute between the Tanzanian government and brokers in the cashewnut trade seems to have ended amicably after President John Magufuli ordered they be paid alongside farmers.
The traders, who used to buy the crop in Mtwara, Lindi and Ruvuma under the system locally known as Kangomba, were cut out of the chain when the government took control of the trade to ensure value for the farmers.
Last year, the government put in place a verification system to guarantee the legality of the claimants of the cashewnut crop in the leading producing regions, with people with over three tonnes of the crop required to show their farms where the nuts were grown.
The verification led to large stockpiles of cashewnuts.
The order, given by President Magufuli in Mtwara town this past week for the release of Tsh50 billion ($20 million) to 18,103 cashewnut growers, came as a relief to the brokers. However, there is a catch: They must first confess to the exploitation of farmers.
The president said that since the government directed the Tanzania Agricultural Development Bank to purchase all cashewnuts last year, Tsh578.8 billion ($249.8 million) has been paid for 156,865 tonnes of the cash crop from 373,379 farmers who had less than 1,500kg each.
Some 18,000 farmers are yet to receive their dues because of inconsistencies in their banking details.
The government has also reportedly paid Tsh5 billion ($2.1 million) for logistics, Tsh1.3 billion ($561,092) for co-ordination, and Tsh6.6 billion ($2.84 million) for storage.
President Magufuli said that during the verification, 780 of the 18,103 people with more than 1,500kg in stocks had no farms, meaning they were middlemen. He accused some leaders of participating in Kangomba.
Mtwara Regional Commissioner Galasium Byakanwa said the purchase of cashewnuts by the government faced several challenges, including cheating, Kangomba, and smuggling from neighbouring Mozambique.
In February, the government announced that it had contracted Kenyan firm Indo Power Solutions Ltd to purchase 100,000 tonnes of cashewnuts worth $180.2 million. But the deal seems to have fallen through.