Kenya: How Brokers Drove Cashew Nut Farmers Into Poverty

Hedlam Mpunga reminisces with nostalgia, how three decades ago, cashew nut farming economically transformed the lives of farmers and residents of Kilifi County. That was before a processing factory — the state-owned Kilifi Cashewnut Ltd closed down.

Mr Mpunga, a cashew nut farmer, remembers how the economy of Kilifi was booming, as machines at the vibrant factory roared with life, while farmers continuously supplied it with raw nuts.

“The economy was doing well, people educated their children and life was good, especially to those whom cashew nut farming employed directly or indirectly,” said Mr Mpunga.

However, when the factory machines died 31 years ago, so did the hopes of hundreds of farmers along the coastal belt, who directly depended on it. The closure of the factory sounded the death knell for cashew nut farming.

Cut down trees

The farmers were frustrated as the government remained silent on their plight, leaving them with nowhere to sell their produce.

With hopes dwindling of ever having a large processing factory similar to the one owned by KCL, many farmers opted to cut down their cashew nut trees, abandoning the once-cherished cash crop.

The entry of middlemen seeking to exploit the void left by the processing plant made farming of cashew nuts untenable, as they controlled prices to the detriment of farmers.

Production of cashew nuts plummeted as farmers turned to other crops such as maize.

In Lamu alone, between 1980 and 1997, production was 9,000 tonnes a year, falling drastically to an estimated 1,500-2,500 tonnes after that.

A 2020 report by the Nuts and Oil Crops Directorate indicates a total of 22,690 hectares of land in Kilifi, Kwale, Lamu, Tana River and Taita Taveta counties is covered by cashew nuts — a slight increase from 22,686 hectares in 2019.

The report released in March by the directorate, which is under the Agriculture and Food Authority, further indicates that 12,667 tonnes of cashew nuts valued at Sh587.2 million were produced last year.

“The increment of less than five hectares was as a result of new planting in Lamu and Kwale. Similar replanting efforts in Kilifi and Kwale county were negated by rampant tree felling for firewood, with the overall effect being diminished area under the crop,” states part of the report.

According to the report, prices for raw cashew nuts were not as impressive as they were in the pre-Covid-19 period. The highest farm gate prices reported in Lamu averaged Sh55 per kilogramme for most of the year.

The directorate’s report further indicates that other counties recorded lower farm gate prices with an average of Sh50 in Kwale and Kilifi counties.

Bleak future

“It is, however, important to note that the farm gate prices are, in most instances, lower than those reported due to the high number of intermediaries who tend to share profits, which would otherwise be available to farmers,” the report further states.

The directorate also notes in its report that the cashew nut industry faces a bleak future as a result of uncertainties ranging from poor quality and dwindling volumes.

The report says most processors reported poor quality nuts delivered, while others have suspended their operations because the available quantities are too low to sustain their businesses.

After the factory closed down, middlemen made prices of raw cashew nuts drop significantly, forcing many farmers to destroy their trees, said Mr Mpunga.

The farmer, who also chopped down several cashew nut trees on his six-acre farm in Tezo, Kilifi County, said farmers felt exploited by the brokers.

Mr Mpunga said he has not lost hope on cashew nut farming and recently bought several cashew nut seedlings.

“Am still engaged in cashew nut farming, whoever comes to buy from me, I will sell, regardless of the price,” he added.

“We will not stop farming cashew nuts, the government ought to support farmers,” said Mr Mpunga.

He added: “I wish cashew nuts had a standard market price like coffee and tea, middle-men would not be buying at their own set prices and selling them exorbitantly, making huge profits.”

Between 1987 and 1990, when the processing factory was closed, a kilogramme of cashew nut ranged between Sh12 and Sh15, a tidy sum at the time, yet now, 30 years later, some processors are still buying cashew nuts for as low as Sh30 and Sh40 a kilo.

Lost employment

Should the factory reopen, many farmers would be ready to supply cashew nuts.

Cooperative societies, the backbone of tea and coffee marketing, do not exist for cashew nut farmers, denying them much-needed bargaining power in the sector.

A former chairperson of Lake Kenyatta Cooperative Society in Mpeketoni, Lamu, Mr David Njuguna said the closure of the state-owned processor had a direct effect on low production of cashew nuts. Many young people who were employed in the cashew nut sector in Lamu and other coastal counties lost employment.

“At one point (after the closure), brokers would buy cashew nuts from farmers at Sh10 per kilogramme. This made many of them cut down their trees,” said Mr Njuguna.

Read: From grace to grass: Once wealthy cashew nut women now wallow in poverty

Mr Elvis Gambo, a cashew nut farmer, said after the closure of the factory, sectors of the economy that were reliant on cashew nut farming collapsed.

A farmer and cashew nut processor, Mr Mark Chome, said the current lack of interest in the crop was due to poor pricing.

“There was a time prices were so good, a kilo could fetch Sh100,” said Mr Chome at his Chome Plants Nursery and Cashewnuts Processing Factory in Kilifi.

He also attributed low pricing to the ban on export of raw cashew nuts, which he said, enabled some processors to take advantage of the ban by offering low prices to farmers.

“Farmers feel oppressed. That is the reason they have neglected the trees while others cut them, they feel the venture is not profitable for them,” said Mr Chome.

While growing up, agricultural extension officers from the processing factory visited farmers, educating and advising them how to grow the crop, which is not the case at the moment, he said.

“I currently propagate cashew nut seedlings, I also sell some,” said Mr Chome, who also noted that there is still a big market for cashew nuts.

Mr Chome said he only processes cashew nuts in his factory on order and many of his customers are from Nairobi and upcountry.

Shattered dreams

A former worker at the defunct KCL factory, Mr Kitsao Karisa, vividly recalled how the closure of the plant shattered the dreams of many workers.

On the day the factory was closed, senior government officials visited the plant and were holed up in a meeting before a decision to shut it down was made.

“I remember very well, it was on February 16, 1990, at 1pm, when we were summoned and told the factory had been closed indefinitely,” said Mr Karisa.