Going Nuts: Scandal Shakes Tanzania’s Cashew Industry

Cashews are a crucial crop in Tanzania’s southern districts, shown above. (Wikimedia Commons)

The Tanzanian government announced on November 18 that it has opened an investigation into fraud during its efforts to rescue the nation’s cashew industry. The investigation comes more than a year after Tanzania’s government bailed out its cashew industry, which led to a global increase in cashew prices.

In November 2018, President John Magufuli deployed the military after cashew farmers halted sales in response to low prices. The Tanzanian government ultimately bought the cashew harvest through government-run cooperative unions at $1.43 per kilogram, well above the $1.30 per kilogram price that private traders offered. Magufuli also fired Tanzania’s trade and agriculture ministers over the debacle, saying, “The government will make sure that no cashew farmer is defrauded by dishonest officials.”

The Tanzanian government is now alleging that more than $17 million paid by cooperative unions to purchase cashews in 2018, and subsidized by the government, are under question. The government claims that many trade unions, organizations that bought the cashews on the government’s behalf, misrepresented the quantity and quality of cashews they bought to receive more government money. Zitto Kabwe led the opposition to Magufuli’s cashew bailout plan in Parliament at the time, denouncing it as illegal. Kabwe claimed such a purchase would require parliamentary approval, which Magufuli had not received.

The current investigation is not the first of the industry’s woes. In October, Magufuli announced the arrests of 92 Tanzanian government officials for defrauding cashew farmers in unrelated incidents in 2016 and 2017. The officials allegedly took cashews for which they never paid.

Despite the scandals, there is mixed support for the government’s treatment of the cashew industry. According to economist Hoseana Lunogelo, “producer prices have doubled…[as] a result of changing the rules which forced [cashew] producers to sell at fixed prices in the domestic market.”

Although cashews account for a small portion of Tanzania’s agricultural production, they are a major crop in southern districts, particularly Mtwara, a bastion of Magufuli’s political opponents. Many cashew farms in southern Tanzania are small operations run at a subsistence level. Opponents of Magufuli have accused him of using cashew policies to boost his support in the southern regions of Tanzania, a stronghold of his political opposition.