Tanzania's cashew nut traders are staring at huge losses following the government's move to confiscate the produce of those who fail to show proof that they are farmers.
The government has launched the verification exercise to rid the sector of middlemen who have dominated the cashew nut trade for years.
In southern Mtwara and Lindi regions, where the army was deployed to collect cashews bought by the government, the authorities have been confiscating thousands of tonnes of nuts.
Cooperatives have warned that they would be left saddled with huge debts after bankrolling farmers to prepare the farms and purchase inputs following the government decision to pay farmers directly for the produce.
As the verification continues, it has become apparent that most of the cashews bought by the government had already been sold to traders at lower prices than the Tanzania Agricultural Bank's price of Tsh3,300 ($1.4) per kilogramme.
On Monday, Mtwara Regional Commissioner Geldius Bykanywa confirmed that the government was only paying farmers after verification.
“We normally assess the amount supposed to be paid to the farmer in relation to the size of their farms,” he told reporters.
He added: “If we find out that there is a discrepancy, we cancel the payment.”
Mr Bykanywa said farmers were at the mercy of these individuals who provided them with loans which they repay using their harvests.
“The traders take advantage to negotiate with the vulnerable growers who cannot afford to buy agricultural inputs, in which the growers are conditioned to equally share the sales,” he said.
He added that the middlemen have been buying the produce even before the harvest.
Mr Byakanwa also claimed executives of cooperative unions were lining up to benefit through payments to “ghost farmers.”
So far, the government has bought about 300 tonnes of cashew nuts, according to the Mtwara Region chief.