On Tuesday, November 20, 2018, Tanzania’s cashew sector was thrown into turmoil after authorities began seizing stock from traders who could not prove they were farmers. The move has put middlemen, cooperative unions and local buyers at risk of heavy losses.
Reports from Mtwara and Lindi indicated that the confiscated cashew harvests could run into hundreds of tonnes, with the value across the region expected to reach billions of Tanzanian shillings. Traders who had long bought the crop before harvest now face the possibility of bankruptcy, while the fallout could also affect next season’s production.
The concern is that many of the traders had been financing farmers by providing loans, farm inputs and other support, then recovering the money from the harvest. Cooperative unions and farmer associations have warned that they may be left with large debts because the government is paying farmers directly, including those who owe the institutions millions of shillings.
As the verification exercise continued, officials said much of the cashew stored in warehouses did not belong to the farmers who were now claiming payment. Instead, the crop had already been sold to traders at lower prices than the government was offering.
Mtwara Regional Commissioner Geldius Bykanywa said on Monday that payments would only be made after officials verified the size of a farmer’s land. He said: “We normally assess the amount supposed to be paid to the farmer in relation to the size of their farms,” and added, “If we find out that there is a discrepancy, we cancel the payment.”
Bykanywa said farmers had often been pressured by traders who offered loans and later expected repayment through harvests. He also said some people had been buying cashew from farmers before the marketing season, while unfaithful cooperative executives were seeking to benefit through payments to “ghost farmers.”
At least 150 tonnes of cashews from Ruvuma Region were received in Mtwara on Monday for warehousing. Byakanwa said another 150 tonnes had earlier been received from Tunduru District, and that local loaders were still working under the supervision of soldiers.
Independent analysts gave mixed reactions to the crackdown. Zanzibar University Senior Lecturer Haji Semboja said farmers should be empowered to grow the crop again next season. Former CEO Roundtable chairman Ali Mufuruki said government intervention had happened before, but public interest had been stronger this year. Tanzania Private Sector Foundation Chairman Salum Shamte said the group had not yet assessed the full impact, but hoped the situation would end well.
