Tanzania to scrap 65% cashew export levy remitted to farmers

TANZANIA – The government of Tanzania has proposed changes to its Cashewnut Industry Act (Cap, 203), scrapping the 65% of the crop export levy remitted to farmers through the Cashewnut Board of Tanzania (CBT).

Amendment to the law will see the export levy collected in the consolidated fund, instead of the current situation where some of the fund is collected in the cashewnut fund.

Initially, the law grants the government 35% of the levy.

With the changes, part of export levy collected is not remitted to farmers for developing the crop as it is the case now, but instead all the monies be deposited in the treasury’s consolidated fund.

The Citizen, the development comes a day after the government was asked to explain the whereabouts of more than US$114.96 million in export levy, claimed by CBT.

Speaking in parliament, the Parliamentary Budget Committee chairperson Hawa Ghasia noted that reports had it the money meant to develop the crop, was spent on other purposes.

The changes were however objected by MPs and representatives of cashewnut growers faulting the proposal’s possibility of negatively impacting growth and prosperity of the crop.

Debating the proposals, Mr Zitto Kabwe (Kigoma Urban-ACT Wazalendo) noted that MPs from 17 cashew nut-growing regions were collaborating in opposing the proposed changes.

“For two consecutive years, the government did not release a share of the export levy to CBT with which to support farmers with agricultural inputs,” he said.

“We want all the MPs to oppose the Bill,” he told The Citizen in a telephone interview.

According to Mordor Intelligence, Tanzania is one among the major cashew producing countries in Africa after Nigeria and Ivory Coast and the eighth biggest producer in the world.

Cashew production and economic importance

While the country has 14 million ha of land dedicated to cashew plantation, less than 10% of the raw cashew produced in the region is processed locally.

Cashew is an important export crop as well as a source of income for small farmers.

Processors in the country are restricted by the Warehouse Receipt System put in place by TCB, which leads to high prices of the raw material and strong competition with the regional exporters.

Tanzania exports cashewnuts to the Netherlands, US, India, South Africa, Germany, UK, Sweden, and Canada.

The global demand for cashews is reported to be on an upward trend, increasing by 9% annually and Africa produces around 45% of the entire global crop.

Although Tanzania produces 120,000 tons, value addition and processing of raw cashew is lagging behind in the country thus, need for capacity building.

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