Tanzania changes cashew payment system to boost farmer earnings

Tunduru. The Tanzanian government is overhauling the payment system for cashew farmers, transitioning from the Agriculture Marketing Cooperative Societies (Amcos) to direct payments managed by cooperative unions.

This change aims to address long-standing issues such as delayed payments and lost earnings that farmers have faced during trading seasons.

The new system will cut out Agriculture Marketing Cooperative Societies (Amcos), which caused delays in payments

The new payment method will be managed through the Central Payment System, which was piloted last year at the Lindi Mwambao Cooperative Union, yielding promising results. Agriculture Minister, Hussein Bashe, announced the shift during his visit to Tunduru District in the Ruvuma Region on September 21, 2024, while inspecting various development projects.

"Through this system, cooperatives will make direct payments to cashewnut farmers after all necessary deductions," said Mr Bashe.

Previously, buyers deposited funds with cooperative unions after auctions, which were then channeled through Amcos to farmers.

However, the new approach removes Amcos from the payment chain, allowing farmers to receive earnings directly from cooperative unions.

Acknowledging potential resistance to the system, Mr Bashe emphasized that transitions often encounter challenges before delivering benefits, citing the successful nationwide fertilizer subsidy distribution as a model of overcoming initial obstacles.

He also mentioned that expanding this payment system to other crops is under consideration to resolve payment-related challenges in the broader agricultural sector.

The proposed system has sparked lively debate among Tunduru lawmakers and council members.

Tunduru South legislator, Daimu Mpakate, expressed concerns about potential sabotage, suggesting that the system should first be tested with smaller crops like sesame.

In contrast, Tunduru North MP, Hassan Kungu, endorsed the initiative, highlighting its necessity to resolve persistent payment issues for cashew farmers.

"The cashew payment system has been problematic for years, with previous leaders facing legal action for mismanagement and embezzled funds being reclaimed," Kungu stated.

Supporting the move, Tunduru District Council chairman, Hairu Mussa, underscored the urgency, noting fraudulent registrations in the district's payment process.

However, Ligoma Ward Councillor, Abdallah Zubeir, voiced concerns about potential difficulties for farmers in reaching cooperative leaders if payment delays arise.

District Commissioner, Simon Chacha, gave assurances that the district would closely monitor the new system's implementation to resolve issues from past trading seasons.

The director general of the Cashew Nut Board of Tanzania (CBT), Alfred Francis, noted that last year's attempt to implement the system faced resistance from cooperative unions and urged collaboration for smoother payments.

Preparations for the 2024/25 cashew season are already in progress, with the Tunduru Agricultural Marketing Cooperative Union (Tamcu) confirming readiness to implement the new payment approach.

Tamcu general manager Marcelino Mrope reported that training sessions for cooperative leaders and Amcos executives have been conducted to ensure a seamless transition.

Tamcu anticipates a production of 28,000 tonnes for the upcoming season, surpassing last year's 26,062.3 tonnes, signaling optimism for Tanzania's cashew industry.