In spite of the unduly lower share of investment in the country’s cashew production sector from government, the sector still holds much potential as it is seen to be one of the most promising economic boosters -- capable of generating between US$400 and US$500million revenue for the country and improving livelihoods of many rural women farmers.
Undoubtedly, cashew production and the entire value chain is seen as a viable and profitable business venture, with industry players describing it as an agriculture goldmine if well-harnessed.
With this development, Ghana cannot afford not to take advantage of the huge opportunity that exists within the cashew sector and its value chain.
The sector currently has 12 processing factories within the country with a processing capacity of 60,000metric tonnes (mt), while the country produces approximately 70,000mt of raw cashew nuts (RCN).
This deficit, among other challenges, stakeholders say calls for an effective dialogue between government and agencies responsible for implementing policies that will help promote the sector.
Cashew production in the country is mostly carried out by smallholder framers (90%).
The past nine years’ experienced a growing interest in cultivation of the nuts, due largely to high demand and flourishing export markets. Approximately 75,000 farmers in the country are engaged in cashew cultivation, with most farmers located in the Brong Ahafo, Northern, Ashanti and Volta Regions.
Government, through the Ministry of Food and Agriculture and the Ministry of Trade and Industry, in recognition of the economic potential of cashew production is currently developing a 10-year cashew sector master plan to structure the value chain -- aimed at increasing production from 70,000 metric tonnes to 150,000 metric tonnes per annum by 2025.
The master-plan currently being discussed by government and private sector stakeholders is expected to focus on increasing the utilisation of installed processing capacity of 65,000 metric tonnes from 5% to 75% by 2025.
As part of a sustainable production road-map toward positioning
the cash crop as an agriculture goldmine, government is to come up with a
memorandum of understanding (MoU) within the next 60 days to outline measures
that promote the production, sale and processing of cashew nuts in the country.
The dialogue will seek to develop a comprehensive document
that indicates government's commitment to extending financial, material and
technical support toward the production, sale and processing of cashew nuts.
Mr. Spio-Garbrah said there is a need for government and private individuals to invest in cashew production to supply the local processing plants, saying: “The Ministry of Trade and Industry and Industry, together with the Ministry of Finance and the Ministry of Food and Agriculture, will work on the extension of credit facilities to the farmers”.
He assured that government will do everything to ensure survival of the cashew processing company, and called for stakeholders’ collaboration that includes providing credit schemes to growers, processors; and to create a buffer stock that will be used to ensure a constant supply of the commodity to processors.
“Supporting farmers to step-up production is the surest way of constantly supplying the commodity,” he said.
Brazilian Ambassador to Ghana Irene Vida Gala, in an interview with B&FT, explained that government needs to put in place policies that support and grow the country cashew sector which holds huge potential for the country’s agricultural sector.
“The business of cashew in Ghana is good, and for Brazilian investment in Ghana to be good there must be a big game for Ghanaians,” adding that government must increase its investment through the farming communities to encourage them to increase production so as toimprove living conditions and livelihoods.
A case for investing in the cashew sector
Demand for the world’s favourite nut is growing, with demand for cashew increasing at around 5% annually. In the past 10 years cashew consumption in India has more than doubled, Europe has grown by 30%, and China is on the rise.
Africa is the only continent that has the opportunity to supply this demand by increasing yields and investing in processing. Africa accounts for 38% of global cashew production, but only 5% of global processing. Through local processing there is value addition potential of US$2.8billion every year, and potential employment for 275,000 people in the processing plants.
As demand grows, the market has become supply-driven. A strong and structured raw material supply chain is in place. Value addition is increasing and has huge potential.
Fatima Alimohamed, the Agriculture Sector’s Vice Chairperson at the Association of Ghana Industries, told B&FT that Ghana cannot afford not to take advantage of this opportunity.
She said: “In short, Africa and more so Ghana needs to double its overall production to meet future needs of its population. Our focus needs to be on emerging crops other than Cocoa, and to help quench that thirst the country needs to get into the race immediately”.
Fatima Alimohamed said there is no dedicated budget for the cashew sector, even though it is critical for sustainable development and poverty reduction.
With enough investment and policies, the country can rival Brazil, India and Vietnam as a premier exporter of processed nuts, she said, calling for change as soon as possible.
“It is vital that cashew producers have a voice in determining policies that affect their own lives on fundamental issues. They bring a wealth of knowledge, understanding of local context, and diversity of ideas.”
Cashew sector challenges
Ghana provides ideal conditions for cashew export, both for raw cashew nuts and processed kernels.
However, a shortcoming is that the majority of raw cashew nuts are shipped to India and Vietnam for processing, instead being processed in-country for local value addition.
Especially in 2015, Ghana-based processors faced big challenges in acquiring raw cashew nuts -- which led to closure of most processing units in that season.
Thus the country therefore has to intensify efforts to boost production from its current output of 70,000mt of raw cashew nuts, and support local processors to increase their competitiveness on the international market.
Compared to other West African countries, the productivity of cashew trees and quality of cashews produced in Ghana are above-average with 733kg/ha.
One factor explaining this advantage in regional comparison is the availability of high-quality planting material.
Farmers have reported using planting materials from government, research institutions and private nursery operators which are mostly improved varieties.
Nevertheless, productivity of most smallholder farmers is still insufficient to offset the usual price fluctuations and generate an adequate margin.
Another challenge is variation in yield levels between the different regions, given the different climate conditions and production practices.
Again, a considerable number of farmers still harvest 300kg/ha or less, especially in the Northern and Volta Regions -- meaning there is a potential to at least double their productivity. In addition, nut quality is still not meeting the requirements of processors.
A leading agency spearheading growth of the cashew sector, African Cashew Initiative (ACi), is working closely with the Ministry of Food and Agriculture (MoFA), the Cocoa Research Institute Ghana, and a private company - Tree Global, to sustainably increase cashew yields and quality.
Another partner of the ACi is the Ghana Standards Authority, which aims at developing standards for improved cashew seedlings.
Among the partners are also included cashew processors such as Mim, Winkers, Kona, Muskaan, and USIBRAS.
Besides, ACi works with cashew processor Olam on a farmer linkage programme under the Cashew Matching Fund, and has already linked more than 21,000 farmers. Another public-private project on integrating beekeeping in cashew farms is implemented by the Cashew Trade Centre.
The African Cashew initiative was launched in 2009 with a broad-based multi-stakeholder partnership approach. It is mainly financed by the German Federal Ministry for Economic Cooperation and Development and the Bill & Melinda Gates Foundation.
Jointly with private companies and public sector partners, ACi enabled over 387,000 cashew producers in the five project countries -- Benin, Burkina Faso, Cote d’Ivoire, Ghana, and Mozambique -- to increase the net income by 161%: leading to a total annual income of US$605 for the families and thereby achieving a sustainable reduction in poverty.
Fast Facts
12
processing factories
42,000mt
installed processing capacity, representing 60% of national production levels
of 70,000mt
2,000
jobs in factories, 75% women
Accumulated
wage: US$1.5million with a maximum wage of US$720 per year
Potential
of 10,000 direct quality jobs in processing
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