17 November 2018

Tanzania: Cashew Creditors in Payment Limbo

Dar es Salaam — Several institutions that are owed billions of shillings in the cashews value chain hope they will not be saddled with huge debts in the new approach to pay farmers directly. Farmers associations and cooperative union officials revealed yesterday some of the debts owed by farmers that were unlikely to be paid should farmers fail to voluntarily settle their debts outside the usual deduction system.

The officials made a plea to the government to ensure that the debts were paid to avoid what they warned may be a disruptive situation in the coming season.

They were speaking ahead of the process to pay farmers, that according to the new Agriculture minister Japheth Hasunga, will start any time from now.

According to Mr Hasunga, farmers would be paid their money directly as directed by President John Magufuli. He said yesterday the verification exercise was complete among 35 cooperative unions in Lindi, Mtwara and Ruvuma regions, paving the way for funds to be released to the farmers' accounts.

"Money will continue to be released as verification continues," said the minister at a press briefing in Mtwara. He said payment will follow the presided directives.

The minister earlier indicated farmers would be paid from Tuesday but reports on the ground show farmers were yet to cash in for their produce. Those who spoke to The Citizen said they were anxiously waiting to be paid and hailed the decision by Dr Magufuli to pay them Sh3,300 per kilo.

Yesterday, Tandahimba and Newala Cooperative Union (Tanecu) chairman Shaibu Aifai told The Citizen that they were in limbo how to recover Sh10 billion they used to purchase 8,000 tonnes of Sulphur.

"It is difficult right now to say how we will recover the money from farmers," said Mr Shaibu. He noted that some farmers also owed local banks in an arrangement that local associations acted as guarantors.

Masasi, Nanyumbu and Mtwara Cooperative Union (Mamcu) general manager Potency Rwiza said levies include Sh52.50 per kilo in packaging materials, Sh38 per kilo paid for storage charges and Sh100 per kilo as cooperative levy also needed to be paid. Other are Sh35 and Sh55 per kilo in transportation charges and council levies equivalent to Sh46.50 per kilo.

"The system will be paralysed in the 2019/2020 season if the government will not intervene because Mamcu and Tanecu have to service Sh6 billion loan we secured for purchase of packaging materials which according to the setup the money was meant to come from buyers," he said.

According to him, the government promised to address the challenges during their recent meeting in Mtwara. Mr Rwiza was supported by Rungwa, Nachingwea and Liwale (Runali) chairman Hassan Mpako who expressed hope that the government will act as promised. "The state will not leave us with debts that will collapse cooperatives which they have been striving to strengthen," he said.

For his part, Tunduru Agricultural Marketing Cooperative Union (Tamcu) chairman Hashim Mbarabara said the crop will face serious challenges next season if the challenges would remain unaddressed. "Levies payable to Amcos, cooperative unions, councils and other stakeholders should therefore be maintained," he said.

Reached for comments, Mr Hasunga said the stakeholders' concerns will be considered after the business is finished.

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