Cashew farmers have vehemently kicked against a proposed ban on the export of raw cashew nuts (RCN) by players in the cashew processing industry, describing the processors’ stance as an attempt to suppress farmers’ income-growth.
Cashew processors in recent times have advocated an outright ban on the export of RCN as one of the “necessary interventions” needed to salvage the processing companies collapsing in the country as a result of the commodity’s non-availability at a competitive price.
Of the 12 processing companies in the country 11 have shut down, leaving Mim Cashew and Agricultural Products Ltd. as the only factory soldiering on in this challenging moment of the industry — but even that plant is working below its installed production capacity of 7,000 metric tonnes per year.
However, the farmers say any attempt to forbid exports of RCN will give processors the authority to monopolise bargaining power, to their detriment. “The current keen competition in the purchase of RCN presents a fair opportunity for farmers to make their desireed profit,” Anthony Kwaku Adu, National President of the Cashew Farmers Association, has said.
In an interview with B&FT, he said: “In the interim, how we farmers can help neutralise the situation is by accepting a standard price that will be acceptable to farmers, processors and exporters. The price has to take into cognisance farmers’ cost of production and international market price of the commodity”. The price of RCN in the country now is hovering around GH¢4 per kilogramme, representing a significant increase of 166% from GH¢1.5 in 2013.
He stressed the need for a radical and holistic support to boost local production as the best antidote for insufficient supply of RCN to industrial players, saying: “There are vast arable lands for mass cultivation of cashew, but what farmers need most to stimulate the drive is substantial financial support”.
“Cashew farmers in Wenchi, Drobo and Bole applied for support from the Export Development and Agricultural Investment Fund (EDAIF), and almost a year later monies are yet to be released. Ghana has the potential to become a true net exporter of the commodity if we emulate Cote d’Ivoire’s vigorous cultivation drive,” Mr. Adu indicated.
La Cote d’Ivoire, a major cashew producer in Africa, produces about 500,000 metric tonnes per annum and processes around 150,000mt. Ghana on the other hand produces about 65,000mt with total installed processing capacity of 70,000mt. Meanwhile, a 35,000mt Usibra Ghana Ltd. at Pramparm is yet to commence operation to scale-up the country’s processing capacity to 105, 000mt in the view of the RCN supply shortfall.
Local processors and exporters trade around 150,000-200,000mt/year; they used to supplement the local production of RCN with imports from Cote d’Ivoire via the Sampa border with ease. Processors as well as exporters were not then feeling the pinch of inadequate local RCN production, until 2013 when Ivorian Authorities placed a ban on exporting the commodity from that country through the borders, restricting it to ports only.
Since the ban came into force, processors have to compete with exporters who have superior financial muscle to out-manourvre competitors on the market particularly at the farm gate. The fierce competition has since forced many out of business, accounting for mass job-losses.