The Tree Crops Development Authority (TCDA) – with a mandate to regulate and develop the production, processing and marketing of tree crops has hinted at the establishment of a special waiver policy to protect the local cashew processing companies.
Under the said policy, cashew processors will be guaranteed to purchase a certain “critical mass” of raw cashew nuts (RCN) that will be enough to keep the factories running throughout the year before exporters are only allowed to ship the rest.
TCDA CEO, Williams Agyapong Quaittoo, who revealed it, said, “In the tree crop regulations that have yet to be approved, we have included a provision to protect walnut processing plants. cashew. Each season, we will make arrangements to help processors gain access to enough RCN to power their plants before anyone else. »
According to him, the regulations are under review by the TCDA board and awaiting further approval from the Cabinet and parliament respectively. Once adopted, the regulation will also specify the modalities for the implementation of a new levy to be paid by exporters and processors of cashew, mango, shea, coconut, oil palm and rubber. . The tax is expected to generate approximately US$10 million in the first year.
Mr. Quaittoo was interacting with the B&FT on the sidelines of the first annual conference of the Progressive Cashew Association of Ghana at Techiman in the Bono East region.
He stressed the need for all stakeholders to rally behind the Authority to rescue the declining cashew processing industry, saying, “We cannot just depend on these foreigners buying our cashews. for export. This is to protect all actors in the cashew value chain.
The move is expected to help ease the woes of cashew processing factories in the country. A litany of challenges, including the unavailability of RCN, forced many factories to close; the few that are still in operation are operating below their installed capacities.
For example, one of the largest defunct factories, Mim Cashew and Agricultural Production Limited at Mim in the Ahafo region, closed in 2020. The company’s closure cost the employment of over 1,000 workers, who were mostly women.
Reacting to the proposed plan to protect factories, Charles Kwame Kuma, CEO of Nimdee Hyeren Company Ltd. – a small-scale processing plant in Sampa in the Bono region, said it was an innovative and commendable initiative, but the question has to do with the capacity and commitment of the Authority to implement it to the letter as proposed.
Mr. Kuma further disclosed that another pressing issue plaguing the industry in the country is the use of outdated equipment, especially in small businesses. According to him, old machines are less productive and increase production costs, making companies less competitive in the international market.
The depreciation of the local currency – the cedi – against major international trading currencies, he said, makes importing advanced equipment a daunting task. He called for tax exemptions on the import of such industrial equipment to help revive the struggling cashew processing industry.
Officially, the 2022 cashew season is not open yet, but trading has already started in major cashew hubs like Sampa, Wenchi, Techiman and Nkrankwanta. Usually, the season starts in late February to March, but the impact of climate change has forced the dynamics of the cashew season to change. Some farmers started picking the nuts around the beginning of January.
The minimum price approved by the TCDA for this season is 5 GH¢ per kilogram of RCN. Currently, the farm gate price is GH¢6.50 to GH¢6.50, while “delivery to warehouse” with lower moisture content is GH¢6.60 to GH¢7.