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  • Cashew processors call for increased government support to expand operations 08/20/2020

    Aug 20th, 2020

    Cashew processors are calling for increased government support so they can expand operations for the benefit of the country. The cashew sub-sector is estimated to generate over 400,000 permanent and seasonal employment along the cashew value chain in Ghana. In 2019, about 120,000 metric tons of raw cashew nuts valued at $378 million were exported from the country. The additional income and jobs that could have come with processing them were lost because they were shipped out in their raw state. President of the Association of Cashew Processors Ghana Ed-Malvin Nii Ayibonte Smith says local processors need more support to be able to increase Ghana’s returns from the cash crop through processing. “The main challenge to cashew processing in Ghana is inappropriate financing to the cashew sector. We have challenges re-capitalising our processing unit when it comes to machinery with improved technology because they are very expensive as you are not processing enough to raise enough capital to re-capitalise,” he told Joy News in an interview. Ghana has about 14 cashew processing factories with processing capacity of about 55,000 metric tons which is only about half of Ghana’s annual cashew production. But a lot of the factories are not functioning currently, further reducing local processing capacity. “We think government’s attention on financing to the processing sector should be more of that from development financing houses like Exim Bank with low interest rate and take some of the risk involved in the collateral management,” Smith said. Director of Crops at the Ministry of Food and Agriculture Seth Osei Akoto says it is worrying that the country has for several years focused less on processing cashew locally. “There haven’t been any conscious efforts to regulate the sector and so people come buy the raw nuts and export it. So, we have people coming in from Vietnam, Brazil, India and China to buy and export. “But we have realized there is the need to regulate the sector. That is why the Tree Crop Bill has been passed. To regulate and support the players in the sector,” he disclosed. “As a country, we started developing production alongside processing. Currently, the installed processing capacity in the country is around 55,000 metric tons. And we have about 14 processing centers. “Unfortunately, most of them have closed down. And this is accounting for why most of the raw nuts are being exported. It is up to the actors along the value chain to do a lot of changes,” he added. Mr. Akoto observes the most critical challenge processors face is the price farmers want to sell their produce to them at the farm gate which is usually very expensive for local processors to pay and break even, compared to the exporters. Those who buy cashew to export to different parts of the world usually pay higher prices for the beans than local processors. “The high-interest rate when they go for loans to buy raw nuts. Some of these are the reasons they have closed down,” he said. Mr. Akoto is confident when the Tree Crop Development Authority becomes operational, it will be able to help deal with these disparities for the benefit of all players. Apart from the processors, farmers are also calling for increased support from government. Secretary of the Ghana National Cashew Farmers Association, Clement Anane says they also need support. “The business of cashew after production is in the hands of private companies. They come and buy it at low price and go and sell it in India at higher prices. We have every hope and trust in the government and that the Tree Crop Development Act will change things,” he told Joy News. “Now that the law has been passed, it is for those who will be privileged to serve on the board to give the government a win-win situation for farmers, the exporters and the processes,” he added. Mr. Anane says they have confidence that government will help them fix these challenges because government has been on helping them deal with several other challenges. “We have every hope in the government and that is why we are appealing to them. Government has committed herself to helping the farmers to produce more through free spraying scheme against pests. “Also, giving us free supply of seedlings and planting seeds and giving the farmers capacity building in terms of quality assessment. “Government has also commissioned the Ghana Standards Authority to ensure farmers are not cheated. Every district association has been given tricycle and GPS to map the farms,” he disclosed. Ashanti Regional Director of Agricultural Services Rev. John Many says government is working to help farmers increase productivity on fields so they can earn more. “For the poor pricing, it has been the word of every farmer. But the word is that if farmers are using poor agricultural practices, they don’t have higher yields,” he said. “But for now, government policy is providing subsidized inputs and extension services to make them improve production. Whatever you are planting, you need good agricultural practices to get maximum yield. If productivity goes up and pricing is worked on, you will break even,” he added.