Business News of Tuesday, 12 December 2017
Government has announced plans to introduce an export levy on raw cashew nuts (RCN), aimed at promoting domestic processing of the commodity by discouraging excessive exports, Gifty Klenam, CEO of Ghana Export Promotion Authority (GEPA), has announced.
The cashew market in the country is saturated by exporters, predominantly foreigners who have pushed processors out of business with unhealthy competition. Of the 13 cashew processing factories in the country, only two are currently in business; the rest have shut down largely because of their inability to source RCN at a competitive price for processing.
According to Ms. Klenam, government is currently in consultation with all relevant stakeholders on the proposed levy, subject to all the legal processes. Government is taking a cue from other West African cashew producing countries that generate funds from export levies for reinvestment into the industry.
The GEPA CEO, speaking at the launch of a pilot cashew mass spraying and grafted seedlings programme in Wenchi, said the yet to be introduced cashew export levy is expected to generate funds into a Cashew Development Fund – envisaged for redevelopment of the cashew industry into a more viable venture.
As a prelude to the export levy, new licencing and registration for all exporters and traders of the commodity have already been set.
The programme encompasses improvement of existing cashew farms through farm-clearing, spraying and pruning; and sets a roadmap for farms expansion as well as establishing new ones to help boost production levels. The pilot mass spraying exercise targets about 10,000 acres in the interim, and scales-up to over 70,000 acres annually beginning from 2018.
The mass spraying programme is expected to increase production by 30 percent. Coupled with other interventions, it [mass spraying programme] is tipped to help increase the production level significantly from the current 70,000 metric tonnes, thereby improving export earnings.
Cashew is currently the Ghana’s leading agricultural non-traditional export (NTE), generating about US$197million in 2016; representing 53 percent of US$371million earnings from the total agricultural NTE sub-sector.
GEPA has approved GH¢1.6million to support production of planting materials and improve yields with the spraying exercise.
“The challenge for today’s cashew farmer stems from inadequate knowledge of best agricultural practices, the apparent lack of mass spraying to fight common diseases, and the lack of logistics and credit to support farmers maintain their farms,” she stated.
The Executive Secretary of the Cashew Industry Association of Ghana (CIAG), Aaron Akyea, expressed his gratitude to the GEPA for its introduction of the programme – indicating that production output could shoot up to at least 90,000mt in the 2018 season- and urged farmers to step up their game.
He said sustainable growth of the cashew industry invariably means sustainable provision of the much-needed resource.
“These resources should be provided not only by GEPA but all who have the nation at heart, including farmers, so that we achieve our goals,” he said.