Cash­ing in on the cashew nuts boom

Lo­cal pro­cess­ing could boost rev­enue in Côte d’Ivoire

Africa Renewal - - CONTENTS - By Franck Ku­wonu

The an­nual “money-har­vest­ing” sea­son is in full swing in Côte d’Ivoire. For the for­tu­nate cashew nut farm­ers in the cen­tral and north­ern parts of the coun­try, Fe­bru­ary through June is harvest time. Here cashew nut grow­ing has im­proved the lives of these small-scale farm­ers sig­nif­i­cantly. They get more money from it than they would make from grow­ing food crops or cot­ton. The im­pact has trans­formed their lives and they now re­fer to their or­chards as places where “money grows on trees.”

“These farm­ers don’t grow co­coa like else­where in the coun­try. Cashew nut is the only cash crop they can rely on al­lyear-round,” says Ga Kone of the Con­seil du Co­ton et de l’Anac­arde (CCA) or the Coun­cil of Cot­ton and Cashew. “So, it is un­der­stand­able that they would re­fer to their or­chards in this way,” Mr. Kone told Africa Re­newal.

Côte d’Ivoire pro­duced 550,000 tonnes of raw cashew nuts in 2014— about 22% of the global pro­duc­tion. The fig­ure is ex­pected to hit a record 600,000 tonnes at the end of the 2015 har­vest­ing sea­son, plac­ing the coun­try as one of the world’s top pro­duc­ers. The West African na­tion’s an­nual pro­duc­tion has been steadily grow­ing at an av­er­age rate of 11%, ac­cord­ing to CCA, the sec­tor’s mar­ket­ing board made up of rep­re­sen­ta­tives from the gov­ern­ment, farm­ers and bank­ing as­so­ci­a­tions.

CCA is also re­spon­si­ble for mak­ing sure farm­ers are paid de­cent prices for their crops. For ex­am­ple, for ev­ery $10 of raw cashew nuts Côte d’Ivoire ex­ports, $6 is ex­pected to be paid back to the farm­ers.

To the Ivoirian econ­omy, the cashew boom presents an un­ex­pected but welcome op­por­tu­nity to di­ver­sify agri­cul­tural ex­ports be­yond co­coa beans and rub­ber. It will also help de­velop the coun­try’s agro-in­dus­try. How­ever, to re­alise its full po­ten­tial, Côte d’Ivoire has to process and add value to its raw cashews. While the coun­try has the ca­pac­ity to process 65,000 tonnes of raw nut an­nu­ally, it cur­rently pro­cesses 40,000 tonnes, ac­cord­ing to CCA. Even then, the pro­cess­ing is usu­ally lim­ited at sep­a­rat­ing bro­ken nuts from whole nuts and pack­ag­ing them in sacks for ex­ports. Bro­ken nuts re­ceive lower prices.

Fight­ing de­ser­ti­fi­ca­tion

Cashew trees were first in­tro­duced in West Africa from In­dia in the early 1960s to fight de­ser­ti­fi­ca­tion and soil ero­sion through agro­forestry and to es­tab­lish pro­tected for­est ar­eas. The ever­green trop­i­cal tree can sur­vive in dif­fi­cult con­di­tions, in­clud­ing sandy soil, and can grow up to 12 me­tres high and is highly rec­om­mended by en­vi­ron­men­tal­ists for re­for­esta­tion pro­grammes.

For the decade end­ing in 1970, Côte d’Ivoire pro­duced a to­tal of about 300 tonnes of cashew nuts. Its com­mer­cial pro­duc­tion re­mained mod­est for the next 30 years. A mile­stone was reached in 2002 when pro­duc­tion topped 100,000 tonnes. Ex­cept for a small dip in 2003, com­mer­cial pro­duc­tion has been grow­ing steadily since then.

Côte d’Ivoire’s cashew nut boom is re­mark­able. “The growth is more than im­pres­sive. It’s as­tound­ing,” Jim Fitz­patrick, a cashew ex­pert told Reuters late last year. “We’ve never seen a coun­try grow its pro­duc­tion in the way Côte d’Ivoire has over the past decade.”

The ease with which the trees grow, the re­duc­tion in cot­ton farm­ing – the tra­di­tional cash crop of the re­gion – and the grow­ing global de­mand for pro­cessed cashew nuts are some of the rea­sons be­hind the coun­try’s im­pres­sive per­for­mance. In­dia and Viet­nam’s ris­ing needs for raw cashew nuts have also fu­elled the growth of cashew farm­ing in Côte d’Ivoire. As the top world ex­porter of

pro­cessed cashew, In­dia im­ports 50% to 60% of raw cashew for pro­cess­ing from Africa and Asia.

African coun­tries pro­duce about 45% or 1.2 mil­lion tonnes of global cashew nuts an­nu­ally. How­ever, only 10% of this is pro­cessed lo­cally, ac­cord­ing to the African Cashew Ini­tia­tive, a pro­ject backed by the Ger­man gov­ern­ment, pri­vate com­pa­nies, and the Bill & Melinda Gates Foun­da­tion. Mem­bers of the ini­tia­tive in­clude five African pro­duc­ers: Benin, Burk­ina Faso, Côte d’Ivoire, Ghana and Mozam­bique.

For all the re­mark­able cashew nut growth, how­ever, the over­all ben­e­fits to the cashew grow­ing ar­eas are lim­ited. Only a small num­ber of small-scale farm­ers are reap­ing the ben­e­fits. In 2014, for ex­am­ple, the Ivo­rian cashew pro­duc­tion re­lied on 250,000 farm­ers while its rev­enues were shared by an es­ti­mated 1.5 mil­lion. In the Zan­zan Dis­trict in north-eastern Côte d’Ivoire, one of the coun­try’s cashew­grow­ing re­gions, poverty lev­els re­main among the high­est na­tion­wide. Six out of ev­ery 10 peo­ple live be­low the poverty line—mean­ing they can­not af­ford a daily sup­ply of one kilo­gramme of rice, the lo­cal sta­ple food—and three-quar­ters of the pop­u­la­tion have no ac­cess to clean wa­ter. Côte d’Ivoire stands to gain up to $127 mil­lion in ex­port rev­enue if it moves from ex­port­ing raw cashews, about 500,000 tons cur­rently, to boost­ing its an­nual pro­cess­ing ca­pac­ity to 100,000 tons of cashews by 2020, a study com­mis­sioned by the gov­ern­ment shows. The wind­fall could even be greater and spur a real cashew in­dus­try ca­pa­ble of com­pet­ing with In­dia and other cashew nut pro­duc­ers such as Viet­nam on in­ter­na­tional mar­kets.

For a start, be­yond guar­an­tee­ing a min­i­mum pur­chase price for farm­ers, the chal­lenge for Côte d’Ivoire is to in­vest more in pro­cess­ing plants. Its main pro­cess­ing plant, and the largest in Africa, can han­dle only 30,000 tonnes of raw cashews per year. Another plant, opened last year with ini­tial pro­cess­ing ca­pac­ity of 2,000 tonnes, is ex­pected to reach its full ca­pac­ity of 20,000 tonnes a year soon.

As the cashew sec­tor comes of age, the tim­ing could not have been bet­ter for Côte d’Ivoire. In­vestors re­port­edly wor­ried by In­dian and Viet­namese mar­ket dom­i­nance might choose to di­ver­sify sup­ply and start in­vest­ing in African cashew pro­duc­tion.

If suc­cess­ful, Côte d’Ivoire could be a good ex­am­ple of how lo­cally-gen­er­ated added value can gen­er­ate ex­tra gov­ern­ment rev­enue while also cre­at­ing jobs. Ac­cord­ing to a study car­ried out by the CCA, ev­ery 100,000 tonnes of pro­cess­ing ca­pac­ity Cote d’Ivoire de­vel­ops will cre­ate 12,300 fac­tory jobs and another 10,000 else­where in the sec­tor.

The global cashew mar­ket was val­ued at up to $7.8 bil­lion last year and is pro­jected to grow by 15% this year. Grow­ing de­mand from China is ex­pected to sus­tain the vi­tal­ity of the mar­ket. Then money could just con­tinue to “grow on trees” ben­e­fit­ing more Ivoiri­ans.

Alamy/Jo­erg Boeth­ling

Cashew nut pro­cess­ing and pro­duc­tion fac­tory in Sotria B Sarl, Ban­fora, Burk­ina Faso.

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