Fee relief for cashew farmers ahead of new trading season

Mtwara. As Tanzania prepares to kick off the 2024/25 cashew trading season on October 11, local farmers are filled with optimism, thanks to a recent government decision, aimed at easing their financial burden.

The government has announced a significant fee relief, reducing costs for farmers by shifting the responsibility to cashew buyers.

This policy change marks a notable shift from the previous practice where farmers bore the weight of various fees associated with cashew production and marketing.

Under the new arrangement, buyers will now cover the costs, which were previously deducted from farmers' earnings.

 This adjustment is expected to improve the profitability and sustainability of cashew farming in Tanzania.

 The Cashew Nut Board of Tanzania (CBT) director general, Mr Francis Alfred, on Friday, September 13, 2024, outlined fees that have been transferred to buyers as Sh56.94 for the council levy, as mandated by the Local Government Finance Act.

 Others are the Sh100 per kilo deducted to cover costs related to cooperative operations that include expenses for purchasing and distributing inputs, managing cashew collection from farmers, renting warehouses, and securing the produce.

 “Sh52 for storage fees at auction warehouses, as regulated by the Warehouse Receipt Board; Sh25 allocated for managing the cashew industry, including administrative tasks, as well as farmer training and quality control,” he said.

 “Others are Sh25 for cashew research; Sh87 for purchasing sacks and ropes used in storage; and Sh110 for crop development initiatives,” he said, revealing that the amount totals Sh456.44 per kilo.

 According to him, the comprehensive fee relief aims to support farmers by reducing their financial constraints and fostering a more sustainable cashew industry.

 The shift in responsibility is expected to encourage better crop management and improve overall productivity in the sector.

 “As the new season approaches, Tanzanian cashew farmers are hopeful that these changes will lead to better financial outcomes and further strengthen the nation's position as a key player in the global cashew market,” said Mr Alfred.

 Mr Alfred announced the presence of the Deputy Permanent Secretary of the Ministry of Agriculture responsible for cooperatives and irrigation, Mr Seleman Serera.

 He said the auctions are expected to begin amidst changes that will see the price quoted at the auction paid to the farmer, with deductions made only on the transportation.

 "Cashew farmers should be informed that in the 2024/25 cashew trading season all fees are placed on the buyer, and the price mentioned at the auction is the amount that the farmer will be paid,” he said.

“Only the transportation fee will be deducted because, beyond that, all fees will be paid by the buyer. This is a new thing for us, and we want farmers to be aware of it," he added.

The Registrar of Cooperative Societies, Dr Benson Ndiege, said modern weighing scales will be used in the new cashew trading season, allowing farmers to receive information about the quantity of cashews delivered to the Agricultural Marketing Cooperative Society (Amcos).

"We expect the weighing scales to be in place by the end of this month. These digital scales must be used appropriately,” he said, directing fining those who would defy the directive.

“The scales will capture the farmer’s data, including weight and name, and provide information directly to their mobile phones to improve the accuracy and transparency of data access,” added Mr Ndiege.

He emphasised the need for ensuring these scales are used this season, saying he was aware that some cooperative leaders were not ready to use them or maybe sidelining the equipment, leading to the weighing scales' underperformance.

The Tanzania Mercantile Exchange (TMX) director general, Mr Godfrey Malekano, said for the 2024/25 trading season, Tanzania cashews will be traded through the online system.

"We need strong cooperation from all key stakeholders this trading season as we are enhancing the system. We plan to meet with stakeholders to discuss how best to use the TMX system," said Mr Malekano.

For his part, the deputy permanent secretary in the ministry of Agriculture responsible for cooperatives and irrigation, Mr Serera, instructed cooperatives to be catalysts for change among farmers by overseeing cashew trading and management of the entire auction process for the 2024/25 season.