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Nut farmers earnings drop after minister bans exports

By | November 18th 2009

by Patrick Beja

Cashew and macadamia nuts farmers are fetching low prices for their produce after the Government banned exports.

Agriculture Minister William Ruto slapped the ban four months ago to encourage local processing following recommendations by a taskforce chaired by former Bahari MP, John Mumba.

A report by the taskforce was in favour of value addition, through local processing of nuts, before export.

Not reflected

But debate is raging that the report may not have clearly reflected the view of all stakeholders dealing in cashew and macadamia nuts.

Those against it argue the verdict favoured a few processors and did not consider the plight of farmers.

Farmers in leading cashew nuts producing areas in Lamu said yesterday most their produce for the season was still in stores due to low prices in the market.

A farmer in Mpeketoni, Mr Julius Ndegwa, said local cashew nut processors pay Sh20 per kilo, compared to between Sh50 and Sh60 offered by exporters.

"We want the ban to be lifted to encourage competition so that farmers can earn better prices," Ndegwa said.

Mr Eric Gitonga, a leading exporter of both macademia nuts said his business had been adversely affected.

Heavy loss

He said he used to export about 30 containers of raw macademia and cashew nuts a year.

"The ban is a akin to what happened to coffee marketing in the past and might curtail production of these crops due to low earnings by farmers," Gitonga said.

Kenya Cashew Nuts Processors and Exporters Association estimates the country may have lost more than Sh750 million, since the ban was imposed.

The association’s chairman, Mr Samuel Varghese, said prices of cashewnuts have plummeted from between Sh55 and Sh58, to just Sh25 per kilo.

Exporters said they are now sourcing nuts from Tanzania, Mozambique and West Africa.

"We don’t want to stir up controversy with Government, so we sourcing from other countries," he said.

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