The major glut that hit the cashew industry has plunged revenue from the cash crop, running into several billions of naira, a development considered as a big blow to farmers, exporters and other stakeholders in the cashew value-chain.
According to the National Cashew Association of Nigeria (NCAN), Kogi State alone, adjudged the largest cashew producing state, generating about 100 metric tonnes (mt) of the total estimated 220mt cashew nuts exported from the country yearly, with direct foreign revenue of over N70b, has had its revenue reduced drastically to less than N20b, losing N50b discount in the last few months.
Due to lack of capacity, storage of cashew fruits has also become an issue, as an estimated eight million tonnes of the fruits are wasted yearly.Coupled with this is the rejection of 37,000mt of the commodity exported to Vietnam, regarded as the largest processor, in addition to 67,000mt reportedly stuck in warehouse in Nigeria.
Several factors have been blamed for this. Though post-harvest handling of cashew was identified as the major reason for the glut, the first Vice President of NCAN, Stephen Ahiaba, faulted low quality of the produce, while the Deputy Executive Secretary, Federation of Agricultural Commodity Associations of Nigeria (FACAN), Mr. Peter Bakare said high price of the commodity was responsible for the rejection.
On his part, the former Chairman, Lagos Chamber of Commerce and Industry (LCCI)’s agriculture sector, Prince Wale Oyekoya blamed the country’s regulatory bodies for allowing the downturn in the industry. To the immediate past Minister of Agriculture and Rural Development, Audu Ogbeh, the development is due to delay in exporting raw cashew nuts at the ports, where the get stuck.
Considering the negative effect of this on the economy, the Federal Government, few weeks ago announced plans to set up six cashew processing plants in four states, to add value, create employment and wealth. Ogbeh, who noted that the move would create long-term solution to the delay in export and stocking of cashew nuts at the ports, said it “would make Nigeria exporter of finished products and not raw materials.”
“The challenge is usually access to credit because a good processing cashew line will cost you about $2m to do something like 10 to 20 tonnes a day. We are targeting to set up at least one plant each in Enugu and Benue, two plants each in Kogi and Oyo States, these are the leading cashew producers now.
“We want to assure the cashew stakeholders that in our next level activities, we intend to stop the export of raw nuts and to process all our cashew here and we hope by the grace of God, to have one or two plants ready before next year. We are talking with the Brazilians now. We want to bring in machines from Brazil to process the cashew fruits into juice, which has a high content of vitamin C.”
Reacting to this promise, the National Publicity Secretary of NCAN, Anga Sotonye, described the plan as a welcome development, but cautioned that government needs to get critical things right.He said: “All it takes is dedication and good decision with action. Our country is rich, the money is there. The moment government plans to do something and they put the money down and follow-up, the execution will be 100 per cent. So, it’s not just saying we are going to do it, but do it and make it happen. It is a welcome development because it is high time we match production with processing. Value addition is a very critical factor in getting the Nigerian cashew value-chain to the next level.
“As it is, the reality on ground is that we have fallen short and below, when you look at other major powers in cashew production. To become strong in the value-chain, as a cashew producing economy, we can grow sufficient volume nationally and can consume sufficient amount of cashew, but if you look at it now, our production is good but we need to increase it so that we can create more jobs.”
Sotonye said in the area of processing, the country is backward because of high cost of machinery, adding that government coming in to support with factories, is a good initiative.“We should understand that when it comes to cashew processing, the market for the finished product is global. So as a government, as a people, we should be able to invest in quality equipment to sustain and deliver on high quality. So, we have to ensure that we don’t just invest in equipment, but we invest in quality and durable equipment, so that we don’t just put equipment and tomorrow they’ll become moribund.
But a top cashew farmer resident in Lagos, who prefers anonymity, said the plan might not be achievable, as it is not certain that Ogbeh, who is the brain behind the initiative will return as minister.“If another minister takes over the Ministry of Agriculture and Rural Development, he might have a new and better idea of how to go about it. Though the Federal Government announced the plan, but so far we have not seen any sign in that direction. The important thing government should do is to create enabling environment that will make room for private investors to invest in these factories rather than government doing so.“Based on antecedents of government, it is better they allow private investors to own their processing plants, give them all the support-finance, land, better policies, infrastructure, and other things. I think that is the way to go, not promises without action.”