‘Harambee’ model revives hope in cashew farming

Tanga. A new initiative is out to change the narrative of cashew nut growing and trading in Tanzania, beginning with Mkinga District in Tanga Region.

Out-Growers Tanzania Limited has had farmers in Mkinga District talking since 2016 when it first set foot in the area. The company aims at empowering farmers through enriching the crop’s production and thrusting them in the cashew nuts trading value chain.

Farmers who have remained impoverished for many years are excited at the model that Out-Growers is deploying to improve their lot.

The farmers’ hope is that the quest to make cashew nuts a dependable cash crop in Tanga Region will succeed and erase the bad memories of many failed trials in the past.

Out-Growers Tanzania is a private business initiative with contribution from African Enterprise Challenge Fund (AECF) in which farmers will be invited to co-own the processing and marketing of their produce in a four-stage arrangement that will significantly boost their income through better farming techniques and local value addition capacity.

Inclusion and transparency

Out-Growers will introduce farmers to a different way of looking at their investment as it seeks a win-win relation that it hopes will put Tanzanian farmers on the global cashew map.

Out-Growers director Karsten Solaas says their model will help Mkinga farmers to control of their destiny as they become business partners with Out-Growers. A big win for the farmers is the access to finance for farm improvements.“At the moment farmers are removed from the value chain.

Out- Growers will see them directly co-own the business and earn profit up to the point of retailers where the final product is sold,” said Mr Karsten.

Out-Growers introduce a shared value chain with complete transparency for all. The supermarket price on finished cashews is shared between processing and farming and everybody knows who gets what, when.

By sharing from the street price, the possibility of corruption and price fixing which has been a big issue in the cashew sector is eliminated.

According to Mr Karsten, the Mkinga story when successful, will offer a business model that can be rolled out to other cashew nuts growing areas to empower more Tanzanian farmers and enable the country earn its rightful value from processed nuts as opposed to exporting raw cashew nuts as is the case today.

“We envisage a situation where Tanzania cashews are easily recognised in the consumer market around the world and its premium value rewarded for originality,” said Mr Karsten.

The Out-Grower model has four steps namely Farmer Clubs; The Harambee; The Hub ; and Waste conversion to Biodiesel

Farmer Clubs

Out-Growers is helping establish farmer clubs as the starting point for the venture. Nearly 2,000 farmers have so far joined the clubs of 12 to 20 people each in five villagers of Mkinga district that are targeted in this phase of the initiative. The villages are Nkanyevi, Mahandakini, Mayomboni, Mazola-Kilifi and Kibewani.

The farm club stage aims at improving farmland yield and production of a larger kernel for the target market through provision of input, seedling and hardware as well as training of the farmers on optimal farming practices, good governance and financial literacy. Management services would also be made easier through the farmer clubs.

With this, Out-Growers expects the farmers to realize at least some of the potentials set by Naliendele Research Institute – Tanzania’s world recognised cashew: planting of up to 70 trees per acre from the current 18 trees per acre and harvest 35 kilos of cashew nuts per tree from 5 kilos per tree. All of this has the potential of the local farmer raising his or her income from $1 (Sh2,300) to $10 (Sh23,000) per day.

The Harambee for local processing

The ‘Harambee’ will be the most significant injection in the value chain. This is an invention of a self-contained village processing factory. It will be a critical input in that it is here that the current value chain begins to be broken.

The Harambee will be co-owned by Out-Growers and farmer groups who feed it with the raw product for first-level processing using standardized equipment positioned not far from the member farmer clubs, reducing the current long distances to ferry the produce to collection centres.

The factory is built on a standard construction that can be multiplied throughout Tanzania. (The vision takes inspiration from successful international franchise models such as MacDonald’s.) It is easy to service and has a potential to employ some 23 people.

Farmers’ ownership is through an arrangement that uses part of their produce as investment capital. The Harambee will be a legal entity with farmers as shareholders to create a long lasting bonding with supply.

Danish Technological University experts have researched on how to enable transparency using a mobile phone-based system through which farmers will keep record, capture and monitor the real value of their harvests and earnings throughout the value chain.

The Hub to secure critical mass quality

In Tanga City, operations have started at Out-Growers’ main base called the ‘Hub’. Here, the semi-processed cashew nuts from the ‘Harambees’ are received for final processing and packaging of the cashews kernels for export.

The Hub secures the critical mass so that the supplier can meet the market requirement for their recipients for credibility.

Another key role of the Hub will be to secure the highest possible quality assurance rating for cashews from Tanzania.

The Hub doubles up as a resource center for the organisation, offers logistical support, management, training and maintenance.

The centre will be responsible for investor relations as it eyes expansion south and will seek partnerships for this venture.

Waste conversion to biofuel

The lack of value addition is one of the disadvantages of cashew nut processing. But for Mkinga farmers, it will be twice lucky as Out-Growers looks to not only have them process their produce within their vicinity, but will for the first time bring the technology to use waste from cashews to add to the income of the cashew growers.

Supported by Unido’s Waste to Energy programme and Danish Technological University professors, Out-Growers has already started producing Biofuel at the Hub by using the cashew nut shells. This is a major step as shells have mostly gone to waste.

The company has installed machinery from India that use new and affordable technology to produce environment-friendly biofuel energy.

Some industries have shown keen interest on the use of this bio-fuel, which will help them become climate friendly through carbon dioxide neutral fuelling.

Out-Growers will even see Mkinga farmers add up income by making use of the cashews apple that is at the moment left to rot without meaningful use.

As a first, researchers from the Technological University will show how the farmers can process the fruit (cashew apple) to generate green bio-ethanol. But Out-Growers has more ambition for this product, and the university’s Food Science Department is now involved in developing higher value products from the today wasted apple, including developing foods such as jams.