Drama as JPM gatecrashes stakeholders’ meeting to solve the cashewnut crisis

Dar es Salaam. Prime Minister Kassim Majaliwa today, October 28, 2018, convened a meeting with stakeholders as part of efforts to solve the ongoing cashewnut crisis.

The meeting had been scheduled, as promised by Mr Majaliwa on Friday in Lindi, to find a solution to the stalemate over raw cashewnut prices that was later aggravated by farmers’ boycott of the auctions.

In the Lindi emergence consultations, Mr Majaliwa had to suspend the auctions till the price stalemate was determined.

But yesterday, as the Prime Minister’s meeting with stakeholders was going on at the State House premises, President Magufuli showed up; uninvited.

He proceeded to field questions from stakeholders and then he gave some directives. At the end of the meeting he apologised to Mr Majaliwa for gatecrashing the meeting.

“I must apologise to the Prime Minister for showing up in the meeting unattended. But I thought I cannot stand aside while our farmers are being ripped off,” he said. The meeting went live on national broadcaster, TBC1 a few minutes after President Magufuli started speaking.

In his remarks President Magufuli warned traders that the government was ready to buy cashewnuts directly from farmers if they fail to buy the produce at the minimum price of Sh3,000 per kilo.

President Magufuli said auctions should resume immediately and that traders will have to tender at the starting price of Sh3,000 and those who can’t afford that should better do something else.

“If you can’t buy the produce at Sh3000 per kilo then you must understand that the government will buy all the cashewnut from farmers,” President Magufuli noted.

“What I can tell you is that cashewnut will be purchased. It does not matter who buys it, whether it’s you traders or the government. And it will be bought at the minimum price of Sh3000 per kilo.

He then revealed that he has already put the army at standby to help in buying the produce.

“In fact I have talked to the chief of defense forces General Venance Mabeyo and he has assured me soldiers are at a standby,” Mr Magufuli added.

Farmers boycott auctions

President Magufuli’s directive came after farmers refused to sell their cashewnut at the indicative prices of Sh1,550 set by the Cashewnut Board of Tanzania (CBT). Mr Majaliwa on Friday announced the cancellation of the auctions and said the government would meet traders to chart the way forward.

But President Magufuli’s directives also came hours after the ACT Wazalendo party leader Zitto Kabwe urged the government to buy the cashewnut from farmers because, he claimed, it was the same government that was to blame for the problems in the cashewnut business.

“The government is largely to blame for the current crisis because its decision to stop remitting to the CBT the cashewnut export levies amounting to billions of shillings meant that farm inputs would not be subsidized leading to huge farming costs to farmers,” Zitto noted.

No more cashewnut indicative prices

CBT set Sh1,550 indicative prices after estimating that production  costs would amount to Sh1,350 per kilo, therefore providing farmers with Sh200 profit per kilo.

The indicative price had been gauged on the indicative price for Sulphur, a crucial input to cashew trees’ growth, of Sh32,000 per a 50 kilo bag.

“But as it turned out Sulphur prices went up to Sh84,000 per 50-kilo bag, leading to a significant increase of production costs to farmers and making the Sh1,550 per kilo price a joke,” Zitto had noted in a press conference earlier yesterday.

But speaking with traders later in the day, President Magufuli ordered the CBT to stop setting indicative prices for cashewnut.

“CBT should never again set indicative prices. It is absurd because the indicative prices do not consider the costs that farmers incur,” President Magufuli said.

Traders should not be inconvenienced

President Magufuli directed Prime Minister Majaliwa and the minister for Agriculture Dr Tizeba to ensure traders were not inconvenienced.

To start with President Magufuli abolished the CBT for charging traders exorbitant fees. He also said the habit by district councils to charge double levies to traders should end.

“I understand CBT this year said it would charge you 17 per cent fees. I abolish that fee. Let them go back to last season’s fee of Sh10 per kilo. You should also refuse to pay more than one levy to district councils when transporting the same consignment,” President Magufuli noted amidst cheers from traders.

Traders are forced to buy empty sacks from cooperative societies at higher prices. This should end, President Magufuli noted.

“Let cooperative societies sell sacks at market prices. And no one should be forced to buy sacks from anyone,” President Magufuli noted.

Mtwara port

Cashewnut traders were prohibited, in the past, from transporting their consignment by road from the southern regions to the Dar es Salaam port amidst protests by traders that the port had neither adequate facilities nor enough vessels to transport the hundreds of thousands of tonnes. Yesterday after traders complained that it was more expensive to transport the produce through Mtwara port than through the Dar es Salaam port President Magufuli lifted the ban.

“If you can promise me that you will not overload your trucks on the way to Dar es Salaam then I do not have any problem with you transporting consignments,” President Magufuli noted.

President Magufuli told traders that the government was ready to address all their challenges. “If you encounter any problem do not hesitate to contact the minister responsible or even the Prime Minister,” he noted.  

He noted that he is ready to disband CBT if it will prove to be a bureaucratic hindrance to the cashewnut trade.

But President Magufuli refused traders’ request to scrap the bid security that traders must pay as part of conditions to purchase cashews from farmers. The CBT set the minimum bid security at Sh100 million for 50 metric tonnes.

“The bid security is crucial to protect farmers’ interest. If you buy the produce and you fail to turn up to pay the farmers it is the government will carry the blame. That is the cost of doing business,” President Magufuli noted, adding that the he did not have any problem with reducing the minimum amount of cashews that a trader can buy from the current 50 tonnes.