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Cashew nut factory planned as EU boosts peasants

Production has fallen below 10,000 tonnes a year valued at Sh265m against a potential of 63,000 metric tonnes valued at over Sh1b

The European Union (EU) has launched an initiative targeted at smallholder cashew nut farmers in Kwale, Kilifi and Lamu counties.

EU Head of Mission in Kenya Bruno Pozzi says the project that is funded by the European Trust Fund will see smallholder farmers roped into the cashew nut value chain, significantly raising their incomes from the crop. Started in October 2017, the project aims at rising and distributing over a million improved cashew nut and sesame seedlings and seeds over a four-year period.

The project is a partnership between the Visegrad countries of Slovakia, Poland, Czech Republic and Hungary in conjunction with Ten Senses Africa Limited and Farm Africa (a non-governmental organisation).

It targets over 15,000 smallholder farmers and will include certification of farmers as producers of organic and fair-trade crops. Pozzi said the project also intends to set up a cashew nut processing factory with a capacity of 2,400 metric tonnes a year, creating over 500 jobs and impacting the local economy.

“This investment aims at economic improvement of the livelihoods in the target counties as it will address fair-trade challenges and imbalances of bargaining power in the food supply chain,” Pozzi said.

Ten Senses General Manager, Frank Omondi, said the initiative was timely and a boon for the people in the catchment areas. “Kenya is currently producing only 25 per cent of its cashew nut harvest capacity,” he said.

The initiative will also train 1,000 youth and women members of self-help groups will be assisted in coming up with specialised, skilled service provision businesses within the cashew and sesame value chains. These will include linkage with financial service providers to access micro-enterprise seed funding.

Cashewnuts. Photo/Courtesy

Visegrád Four (V4) is a cultural and political alliance of four Central European nations – the Czech Republic, Hungary, Poland and Slovakia that are members of the EU – for the purposes of advancing military, cultural, economic and energy cooperation with one another along with furthering their integration in the EU.

In this cashew nut project, Ten Senses will provide agricultural support while Farm Africa will address the social aspects of the project including engaging and training women and youth on key aspects of the overall value chain.

Cashew buts are grown along the Kenyan coast, with local farmers producing approximately 10,000 metric tonnes of the nuts valued at Sh265 million against a full potential of 63,000 metric tonnes valued at over Sh1 billion. The nut industry has been suffering from an export ban imposed by the Kenyan government in 2009.

The ban was introduced at the request of a few local nut companies who did not want to pay the world price for nuts. The idea was also to encourage investments in nut processing factories. International Nut and Dried Fruit Council Foundation (INC) officials say many countries have reported imports of relatively small amounts of shelled cashews from Kenya.

INC Ambassador for Kenya, Mbugua Nugi, said: “Kenya’s cashew nut industry did not report cashew exports during the last few years since the ban.” Farmers have been discouraged, saying they were being exploited by processors manipulating prices to their advantage.

There have been reports of farmers uprooting their cashew trees. Cashew nut farmers get paid as little as Sh20 per kilo, compared to Sh70 per kilo in 2009 when the government introduced an export ban. Cashew nut farmers in Kilifi, Kwale and Lamu are being cheated. Today the world price for raw cashew nuts is over Sh200.

The ban is killing the cashew nut industry, with production plummeting to below 10,000 tonnes annually yet Kenya’s capacity is over 60,000 tonnes.There are six operational nut factories: one at the Coast in Kilifi and the others in Nairobi and Thika.

Four other factories at the Coast have closed over the years due to lack of volume occasioned by raw exports. This has occasioned in many farmers abandoning cashew farming and owing to lack of buyers also falling to unscrupulous middlemen buying produce at below market prices.

Current installed processing capacity of the operational factories is 25,000 metric tonnes though only 10,000 metric tonnes is being utilised. Hence the challenge remains volume- an area the Ten Senses projects are addressing, with the seedling project seeking to avail one million seedlings by 2021.

The government has also been encouraging farmers to replant the trees by issuing free or subsidised seedlings and extension services. The seedlings are significant, as most of Kenya’s cashew trees are more than 40 years old.

Apart Ten Senses, these will be funded by other non-governmental organisations such as the United States Agency for International Development (USAid); the Danish International Development Agency (Danida) and the African Cashew Alliance (ACA) Walmart Foundation.

Founded in 2010 as the world’s first Fair trade macadamia and cashew producer, Ten Senses Africa works on the ground with 30,000 farmers alongside local entrepreneurs and smallholder farmers.

“TSA uses a private sector approach to develop profitable agricultural businesses that integrate commercial and smallholder farmers into modern value chains,” says Omondi.

In a related development, the EU has proposed to ban unfair trading practices in the food supply chain to ensure fair treat¬ment for small and medium-sized food and farming businesses.

The proposed ban targets business conduct that undermines the economic viability of operators in the chain and by setting minimum standards and reinforcing the enforcement.

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