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Hard nut to crack for poor farmers who earn peanuts

BUSINESS
By | Mar 16th 2010 | 4 min read
By | March 16th 2010
BUSINESS

By Standard Team

An outbound passenger, waiting in the departures lobby of Jomo Kenyatta International Airport for a flight, buys a 100-gram packet of cashewnuts for Sh200 and relaxes on the waiting bench as he chews the tasty repast.

In a different scenario, cashewnut farmer Karisa Nzaro of Tezo village, Kilifi District, sews a sack full of unshelled nuts and looks distraught as he waits for a buyer. At Sh20 per kilo, the 50kg sack that had taken him a whole day to pick, will fetch him Sh1,000.

Workers at Farm Nut, a macadamia processing factory in Murang’a town. Photos: Boniface Gikandi and Marufu Mohammed/Standard

"I will cut down all these trees and plant maize instead. The prices are so low, I can no longer rely on cashewnuts to feed my family," says Nzaro, as if shouting at the sack.

There is a big disparity between the retail price at which the airport passenger buys a 100-gram packet of cashewnuts and the buying price brokers offer Nzaro for a 50kg sack.

A similar effect exists for farmers of macadamia, another nut mainly grown in the Mt Kenya region and the South Rift and sold at high prices in outlets but bring meagre returns to farmers.

The situation has forced many farmers who feel exploited by the buyers and processors of the nuts to abandon what should be lucrative ventures for other crops.

Hundreds of cashewnuts farmers in the Coast have neglected the once valued cash crop, complaining of low prices.

 

Left to bushes

Until 1996, when Kilifi Cashewnut Factory collapsed, farmers in Kilifi, Kwale, Malindi and Lamu reaped huge revenues from the crop, but now the trees have been left to grow into bushes.

Many other farmers have replaced them with maize, cassava and other crops.

Buying agents who mostly use bicycles to reach farmers offer between Sh20 and Sh25 per kilo of raw nuts. The agents later sell the produce at between Sh30 and Sh40 per kilo to local processors.

Farmers say the market prices plummeted last year when Agriculture Minister William Ruto banned the export of raw macadamia and cashew nuts. The aim was to create jobs locally through local processing, revive collapsed industry like the mothballed Kilifi Cashewnuts Factory and add value to the export product.

However, farmers complain that buyers who used to export raw products pulled out, lowering the demand and leaving the local processors to act as monopolies that offer peanuts for raw nuts. Yet, the Kilifi factory still wobbles, acting like a collection point for other private processors.

Farmers in the leading cashewnuts producing fields in Mpeketoni and Lamu, complain the produce for the last season lacked market owing to low prices after the ban.

A spokesman for the Mpeketoni farmers Julius Ndegwa says local cashewnut processors offer as low as Sh20 per kilo compared to between Sh50 and Sh60 offered by exporters before the ban.

The scenario is the same for Macadamia farmers. Emiliano Kathuri of Nkubu location, Meru Central District, uprooted hismacadamia plants and planted exotic bananas which fetch better prices.

Macadamia in the area goes for Sh20 per kilogramme of unshelled nuts down at Sh100 per kilo a year ago, before the ban. Cashewnuts also fetched a similar amount then.

Some processors are buying the unshelled nuts at between Sh40 and Sh45 in parts of Central Province and South Rift where the nuts are grown commercially.

There are three main private macadamia dealers and processors in Kenya and several smaller ones.

The lead processors are, Kenya Nut Company Ltd, also known as ‘The Macadamia People’, Kenya Nut Crackers Ltd and Equatorial Nut Processors.

There is a big disparity between the buying prices and the retail and wholesale selling of macadamia. Plain processed nuts sell at Sh12.14 per 20g packets and Sh136.49 for 250g packets.

Joseph Muturi, the purchasing manager of Equatorial Nut Processors says: "At Sh45 per kilogramme in bulk (when a farmer delivers the nuts to the company’s buying point in tonnes), this is the best price offer in the last five years.

Speaking for the Nut Crackers Ltd, Depak Bhasin says: "We only buy macadamia nuts at a negotiable price if a farmer is able to fill a container of 20 tonnes."

In the Coast, Mpeketoni is estimated to offer more than 5000 metric tonnes of raw cashewnuts to the market per season.

Former cashewnut dealers who are banned from exporting raw nuts now import nuts from neighbouring Tanzania and from Mozambique, repackage them and sell or export at high prices. Kenyan processors export most of their produce to China and India where demand is high.

Ban to blame

"Most of the cashewnuts you buy locally are imported, that is why they are expensive," says a long-time raw cashewnut buyer and Tezo councillor Gambo Mwembeni. He blames the ban on the export raw cashewnuts by Ruto for the decline in prices and for the absurd circle of importing for the local market while exporting the local produce.

Retired managing director of the stalled Kilifi Cashewnut Factory Dr Enock Mramba says Government should not interfere in the marketing of nuts.

In Tanzania where a free market is let to control farmers and processors, the prices are good for both sides, he says.

A deputy agricultural officer in Kilifi Nalyton Nyondoto insists the ban on raw cashewnuts still stands despite protests from farmers.

Stories by maore ithula, patrick beja, joseph masha and boniface gikandi

 

 

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