Published by:Deutsche Gesellschaft fürInternationale Zusammenarbeit (GIZ) GmbHFondations internationalesPostfach 5180, 65726 Eschborn, GermanyT +49 61 96 79-1438F +49 61 96 79-80 1438E [email protected] www.giz.de
Place and date of publication:Mozambique, February 2010
Authors:Dr. Alois Große-Rüschkamp;Kathrin Seelige
Responsible editor:Peter Keller (Director African Cashew initiative)African Cashew initiative (ACi)32, Nortei Ababio Street Airport Residential AreaAccra, GHANAT + 233 302 77-41 62 F + 233 302 77-13 63
Contact: [email protected]
Acknowledgement:This study has been implemented as part of the African Cashew initia-tive (ACi), a project jointly financed by various private companies, the Federal German Ministry for Economic Cooperation and Developmentand the Bill & Melinda Gates Foundation. ACi is implemented by the African Cashew Alliance (ACA), the German Development Cooperation GIZ, as a lead agency as well as FairMatch-Support and Technoserve.
This report is based on research funded by the Bill & Melinda Gates Foundation. The findings and conclusions contained within are those of the authors and do not necessarily reflect positions or policies of the Bill & Melinda Gates Foundation.
Design:creative republic // Thomas Maxeiner Visual Communikations, Frankfurt am Main/GermanyT +49 69-915085-60 I www.creativerepublic.net
Photos:© GIZ/ Rüdiger Behrens, Thorben Kruse, Claudia Schülein
& iStock, Shutterstock, creative republic
African Cashew Initiative is funded by:
and private partners
In cooperation with:Implemented by:
COOPERATIONMOZAMBIQUE
FEDERAL REPUBLIC OF GERMANY
4 Table of Contents
Executive Summary ...........................................................................................8
1.0 Introduction .................................................................................................14
1.1 Backgroundinformationontheproject..............141.2 Objectiveandfocusofthestudy.........................14
2.0 Analysis of the Mozambican Cashew Sector with a Focus on Nampula Province .............................................15
2.1 General Aspects of the Cashew Sector .....................................15 2.1.1 Globalaspects......................................................15 2.1.2 Developmentofcashewproduction
inMozambique...................................................15 2.1.3 Regionaldistributionofproductionandsales.....16 2.1.4 Selectionofaprovinceforthestudy...................17
2.2 Analysis of Cashew Production in Nampula Province ..............................................................................18
2.2.1 CashewproductioninNampulaprovince(statisticaldata)...................................................18
2.2.2 Generalaspectsofcashewproductionandmarketing.....................................................18
2.2.2.1 Farmingsystemsincludingcashew..............18 2.2.2.2 Environmentalaspects
ofcashewproduction...................................19 2.2.3 Thecashewvaluechain.......................................19 2.2.4 SWOTanalysisofthecashewsector.................. 22 2.2.4.1 Resultsoftheanalysis................................. 23 2.2.4.2 Opportunities............................................. 27 2.2.4.3 Threats........................................................ 28
3.0 Proposed Project Approach and Intervention Strategy ....................................................................32
3.1 Proposed Areas of Intervention and Fields of Activities...................................................................................32
3.1.1 OtherprojectsinthecashewsectorinMozambique....................................................32
3.1.2 Production-relatedaspects...................................32 3.1.2.1 Rejuvenationofthetreepopulation...............32 3.1.2.2 Improvedcropandpestmanagement............33 3.1.2.3 Improvementsinmarketing......................... 34
3.1.3 Economicaspectsandexpectedimpactsoftheproject........................................................35
3.1.3.1 Impactatthefarmlevel.................................35 3.1.3.2 Expectedimpactonpovertyreduction......... 36 3.1.3.3 Impactonthevolumeofproduction............. 38 3.1.3.4 Impactonthequalityofproduction............. 38
3.2 Implementation Strategy .....................................................................39
3.2.1 Methodologicalapproach.....................................39 3.2.2 Areaandorganisationalstructure
ofimplementation............................................... 40 3.2.2.1 Districtsproposedforimplementation......... 40 3.2.2.2 Organisationalstructure.............................. 40 3.2.2.3 Projectpersonnel..........................................41
3.3 Training Activities ....................................................................................42
3.3.1 Trainingoffacilitators......................................... 42 3.3.2 Trainingofextensionists..................................... 42 3.3.3 Trainingcontents................................................ 42
5
3.4 Estimated Costs of the Project ........................................................ 44
3.4.1 Costsofexperts................................................... 44 3.4.2 Investmentcosts.................................................. 44 3.4.3 Costsoftechnicalstaffattheprojectoffice
inNampulaandofficerunningcosts................... 44 3.4.4 Costsoftheextensiontechnicians........................45 3.4.5 CostsoftheFFSfacilitators..................................45 3.4.6 Traininginstitution.............................................45 3.4.7 Contingencies......................................................45
3.5 Next Steps ................................................................................................... 48
List of Acronyms ............................................................................................... 49
Executive Summary
Focus of the study and approach
ThisstudyisbasedonananalysisofcashewproductioninNampulaprovinceinMozambiqueconductedbytwoexpertsduringNovember/December2009.Thereportcontainstheconclusionsofthestudyandaproposaltoraisetheproductivityofsmallholdercashewproductionthroughasupportingproject,thefirstthreeyearphaseofwhichwillworkwithproducersinfourpilotdistrictsinNampula.
AfterabrieflookatthedevelopmentoftheglobalcashewsectorandMozambique’sroleinit,thecashewvaluechainandcashewproductioninNampulaprovinceareanalysedanddescribed.Thisdescriptionalsocontainstheresultsofthemission’sdatacollectioninthefield,specifyingthecausesoftoday’slowproductivity.
PossibilitiesforimprovingtheproductivityofsmallholdercashewproductionbasedontechnologiesreadilyavailableinMozambiquearethenpresented.Theseimprovementsincludechangesinthetreatmentandcareoftreesandspeeding-uptherenewaloftheoveragetreepopulation.Theeconomicfeasibilityoftheproposedimpro-vementsattheproducers’level(micro-economic feasibility)andtheirimpactontheincomeofsmallholderscom-pletestheanalysis.
Thecurrentcashewsectorpolicyisdiscussedandchangesareproposedtosupporttheproject’seffortstointroduceimprovements.Finally,aproposalfortheproject’sinterventionsisspecifiedandcosted.
The present situation
Sinceitsindependencein1975MozambiquehaslostitsplaceastheleadingexporterofcashewnutstoVietnam,India,agroupofWestAfricannationsandBrazil;countrieswhichhaveexpandedtheirproductioninlinewiththenearexponentialgrowthindemandforcashewnutsintheworldmarket.ItisonlyinthelastdecadethatMozambique’sproductionhasshownsteadygrowthagain-albeitwithstrongfluctuationsfromyeartoyearreflectingtheweatherconditions–accompaniedbyanincreaseofthepercentageofprocessednutsamongthecountry’sexports.Theincreaseofprocessingcapacityraisesthevalueaddedinthecountry.
8
9 An18%taxontheexportof raw cashew nuts (RCN)wasintroducedin2001toprotectthecountry’sgrow-ingprocessingindustry.ThesetaxrevenuesareusedbyINCAJU(National Cashew Institute/Instituto Nacional do Cajú),thestatebodyinchargeofthesector,tofinancemeasuressupportingproducers,andconsistingofex-tensionservices,seedlingproductionanddistributiontofarmersandsubsidisingpesticidesforsmallholders.However,thistaxandabanonexportsduringthefirstmonthsoftheharvesthaveloweredthepriceofRCNforsmallholders.
Becauseofinherentinefficienciesofthesubsidiesanddistortionsinthemarket,unwantedeffectshaveemergedinthedistributionofincomefromthetaxandsubsidies.Theseshouldbereviewedandaninvestmentfriendlyen-vironmentshouldbecreatedtoencouragetheprivatesectortoenterthisfield,forexample,inproducingseedlings.
Secondaryandprimarydatacollectedbytheteamshowsthatabout32milliontreesproduceroughly81,000tonsofRCNannually,resultinginanaverageoflessthan3kgpertree.About4.3milliontreesarebeingsprayedandcanproduceupto10kg/tree.
However,manyofthetreesareoldandneedtobereplaced.ThenumberofseedlingsproducedanddistributedbyINCAJUandsuccessfullyplantedisstillsolowthatnorejuvenationhastakenplaceandtheaverageageofMozambique’streepopulationcontinuestorise.StatisticsgivenbyINCAJUshowthatthegradualimprove-mentsinproductionarealmostexclusivelyduetothediseasecontrolactivitiesthatINCAJUpromotes.
Thecashewmarketingchainislong,involvingseveralactorsthatbuy,tradeandpartlyprocessRCNbe-forethenutsreachtheexporter.Thisisduetoastructureofproductionthatleadstohighmarketingcosts,wheremanyproducersfurnishsmallamountsduringa3-monthperiodinareas,manyofwhichareremoteanddifficulttoreachbytruck.
Althoughin200836%oftheRCNwereprocessedinMozambique,thefinalprocessingandpackagingofthenutkernelsfortheconsumerisalmostexclusivelydoneintheconsumingcountriesinEuropeand/orUSA.Thismeansthatlessthan20%ofthetotalvalueaddedaccruesinsideMozambique,andtheproducershaveashareofonly10%ofwhatthefinalconsumerspay.
Aboutonethird(10million)ofthenation’scashewtreesareinNampulaprovince.Duetothehigherpro-ductivityofthetrees(20%weresprayedin2008versus13%nationwide)halfofalltherecordedsalesofRCNinthecountryareinNampulaprovince,whichhasanevengreatershareintheexportofprocessedcashewnuts.
Economic analysis
Acashflowanalysisfortwotypesofgrowerwasundertaken:(1) assumingalllabourispaid(medium-sizedgrowers,i.e.from100to1,000trees)and(2)assumingalllabourisdonebyfamilyrelations(smallholderswithlessthan100trees;thestatisticalaverageisaround30trees).
Identicalproductionmethodsandyields(10kg/tree)wereassumedforthetwocases.However,thecalcula-tionassumesthatsprayingservicesarenotsubsidisedandamountto2,700MTs/ha(insteadofonly1,400MTs/hacurrently).Thecostofseedlingswasassumedtobe20MTs/treeseedlingwithwagesat50MTs/day.
Underthesecircumstanceslabourprovestobethelargestcostformedium-sizedgrowers,constituting80%oftheinstallationcostsofanewplantation,whichamountsto8,000MTs/haintotal,basedoncurrentprices.Thesecostsarenotaccruedbysmallholders.
Fromyear10to25,inwhichproductionpeaks,thecashflow(annualreceiptsminusannualexpenses)isposi-tiveandamountsto6,000MTs/hainthecaseofthesmallholderand2,850MTs/hawhenlabourmustbepaid.
Basedona25yearperiod,investmentinanewcashewplantationprovesveryprofitableforsmallholders.Theinternal rate of return(IRR) amountsto68%.Forthemedium-sizedgrower,theIRRturnsouttobe12%inthefirstcase.Ifnosubsidiesarepaidthecostofsprayingatreealmostdoublesfrom20toabout40MTs/tree.
Ifanexistingcashewplantationisassumedandsprayingisintroduced,theyieldcanbesafelyassumedtorisefrom3to8kg/tree.Consideringtheincrementalcostsof(subsidised)spraying,theincomeofthesmallholderfromcashewdoublesfromtheequivalentof70US$/ha(i.e.per70trees)to140US$/ha.However,sincetheaver-agesmallholderownsonly20to30trees,thedoublingofhisincomeisjustafractionofthisandthecontribu-tiontopovertyreductionmustbeconsideredminor.
Itshouldalsobenotedthattherearecompetingcrops,suchassesame,thatmaydeliverhigherabsolutenetcashflowsinfavourablecircumstanceswhenthewaterstressisnotexcessive,i.e.whenthecropsreceivesuffi-cientwater.
10 Impact on production
Theproposedprojectisexpectedtoreachabout10%ofthecashewproducersintheprovince,roughly30,000growers,duringitsthreeyearimplementationperiod.
Assuminganincreaseoftheaverageproductivityfromthecurrent3kg/treeto8kg/treewithpropermanagement,theproductionofatypicalgrowerwith30treeswouldincreasebyabout150kgperyear,whichismorethandoublethelevelofcurrentproduction.Ifallgrowersreachedbytheprojectdoubledtheirproduction,provincialproductionwouldincreaseby10%andnationalproductionbyabout5%.
Proposal for project approach
Inordertoreach10%ofthecashewproducersintheprovince,i.e.30,000growers,theprojectshouldbelaunchedinfourdistricts:Angoche,Magovolas,Moma,andMongicual.
ThemodelofFarmers Field Schools (FFS)wouldbeused,inwhichgroupsofabout25farmerscomparetherecommendedtechniqueswithtraditionalproductionmethodsonajointly-workedtrialfieldforoneyear.Thegroupsareledbyfacilitators(groupmemberswithleadershipqualities)whowillbetrainedbytheproject.
TheprojectwillemployaNational Coordinator,whowillworkfromanofficeinNampulaandbesupportedbyaDeputy Coordinator and a Specialist for supporting farmers organisationsandanOffice Manager(administratorwithsecretarialandaccountantduties).Adriverandguardswouldcompletetheteam.
TheNampulaofficewouldworkwith4 District Coordinators,oneineachdistrict,eachofwhichwouldconnecttobetween5and10extensiontechnicians.
Eachoftheextensionists(8inyear1and36eachinyears2and3)wouldinturnaccom-pany5to6facilitators,andeachofthefacilitators(40inyear1and120eachinyears2and3)wouldworkwiththreeFarmer Field Schools.Inthisway120FFScouldbeaccompaniedinyear1and540eachinyears2and3.Thissystemwouldreach3,000cashewproducersinyear1,13,500inyear2and13,500(different)cashewproducersinyear3,i.e.atotalof30,000producersduringtheproposedimplementationperiod.
The Project CoordinatorwouldbesupportedbyaGIZ Coordinator (juniorexpertinahalftimeposition)attachedtotheGIZofficeinMaputo.HewouldsupportandbackstoptheprojectintheadministrationoffinancialmattersandtherealisationoftrainingcoursesandM&E (Monitoring and Evaluation) activities.
OneInternational Short-Term Expertwouldberesponsibleforprovidingtechnicalback-stoppingandadviceoncurriculumdevelopmentand,specifically,oneconomicaspects.HewouldalsoorientthedevelopmentofanM&E (Monitoring and Evaluation)systemtomonitortheperformanceandassesstheproject’simpactatthefarmlevel.Hewouldalsoproposeandlobbyforapolicyenvironmentthatsupportsthedevelopmentofthecashewsector.
National Short-Term Experts,mostlikelymembersofresearchandeducationalorprofes-sionaltraininginstitutions(likeIIAM ),willberesponsibleforcurriculumdevelopmentandfortherealisationoftrainingcoursesforextensionistsandfacilitators,aswellastheimplemen-tationofrequiredfieldcomponentsforthemonitoringsystem.
11 Training aspects
Thetrainingcontentsforthefacilitators,extensionistsandDistrict Coordinatorsaretoalargedegreeidentical,sincetheycoveraspectsrelatedcloselywithcashewproductionandmarketing.
However,thetrainingoftheextensionistsandDistrict Coordinators includesaspecificmoduleontheeconomicsofcashewproduction.Thisissothattraineesunderstandaspectsrelatedtoproductivitynotonlyofcashewproduction,butalsothemethodologyfordetermin-ingthefeasibilityofinvestmentsandalternativecrops,whichwouldbebeyondthepresentcapabilitiesofmostsmallholders.
Theforeseenmodularconstructionofthetrainingcourseswillfacilitatetheeasyadaptationofthecoursecontentstothespecificneedsofthetrainees.
Theproposedtrainingoffacilitatorswillbebasedon4modulesof5dayseach,covering:(1)plantinganddiversification,(2)pruning,weeding,(3)integratedpestmanagement,and(4)harvestandpost-harvestactivitiesandmarketing.
Theextensionistswouldreceivetrainingingroupsof10byinternationalandlocalspecialists,consistingof5modulesof5dayseach,covering:(1)plantinganddiversification,(2)pruning,weeding,(3)integratedpestmanagement,(4)harvestandpost-harvestactivitiesandmarketing,(5)economicsofcashewproductionand(6)farmersassociations.
TheADPPStrainingcentreinIthuculoappearstobesuitablefortheforeseentrainingactivities.
Cost estimation of proposed project approach
Theestimatedprojectcosts(assuminganexchangerateof30MTs/US$)amountto:ÿ 441,660US$forlong-termandshort-termexperts,includingperdiemsÿ 106,500US$fortheacquisitionofvehiclesandofficeequipmentÿ 632,760US$fortechnicalstaffattheprojectofficeinNampulaandofficerunningcostsÿ 219,313US$forextensiontechniciansÿ 355,649US$fortheFFSfacilitatorsÿ Assumingabout10%forcontingencies,thetotalcostisestimatedat1,896,000US$.
Recommended first steps
OncethisprojectproposalhasbeendiscussedwiththeauthoritiesconcernedandaProjectAgreementhasbeensigned,thefollowingstepsshouldbeinitiated:
ÿ EstablishingaSteeringCommitteeanddefiningitstasksÿ Selectingimplementationpartners,defininganimplementationstrategyandproceduresÿ Contractingexpatriateandlocalstaffandestablishingtheofficeinfrastructureÿ Reachingagreementswithorganisationstoprovidetrainersÿ Holdingajointplanningworkshopwithrepresentativesofallstakeholdersandagreeing
ontheplannedactivitiesandestablishingaPlanofOperationsfortheentireimplementationperiodof3yearsandPlanofActivitiesforyear1and:• Trainingthefirstgroupsofextensionistsbyinternationalandnationalspecialists• IdentifyingandformingFarmer Field Schools (FFS(localities, members, facilitators))• Trainingthefacilitators• ActivatingfirstFFSsinthedistricts.
Apartfromthesekeysteps,theprojectneedstodevelopadditionalactivitiesto:ÿ Identify,afterapprovalbyINCAJU,privatesectorpartnersthatareinterestedin
theproductionofseedlingsandadvisethemonthestart-upoftheactivityÿ Supporteffortstoimprovesmallholders’accesstoformalcreditÿ Helpimprovesmallholders’accesstoinputs.
14 1.0 Introduction
1.1 Background information on the project
ThepurposeoftheAfrican Cashew initiative (ACi),whichisfundedbytheBill & Melinda Gates Foundation,istostrengthentheglobalcompetitivenessofcashewproductionandprocessinginfivepilotcountries(Mozambique,Ghana,BurkinaFaso,Coted’IvoireandBenin).
Thesupportactivitieswillassist150,000small-scalecashewproducerstoincreasetheirproductivityandgainanadditionalUS$15millioninincomeperyear.Furthermore,theproject’ssupportactivitieswilldevelop5,500newjobsinlocal,mediumandlarge-scalecashewnutprocessingindustries.
TheAfrican Cashew initiative (ACi)contributestoalleviat-ingruralpovertyandpromotingpro-poorgrowthinthepi-lotcountriesbyincreasingtheincomeofpoorsmall-scalefarmersandcreatingnewemploymentopportunities,espe-ciallyforwomen.Thepromotionoflocalmediumandlarge-scaleagro-processingindustriessupportsthediversificationofthenationaleconomyandincreaseseconomicvalue-addingamongthepilotAfricancountries–thelong-termvisionaimsfor60%oflocalcashewnutproductiontobeproc-essedbythepilotcountries.
Theprojectpursuesfiveobjectivesinordertoachieveitsoverallgoal:
ÿ Increasequalityandquantityofcashewnutproduction,thusensuringthecompetitivenessofAfricancashewproductiononglobalmarkets
ÿ Strengthenlocalmediumandlarge-scalecashewprocessingindustries
ÿ ImprovemarketlinkagesalongthevaluechainandpromoteAfricancashews
ÿ Supportanenablingenvironmentforcashewproductionandprocessing
ÿ Identifyandanalyselearningareasandimplementinnovativeprojectsonapilotbasis.
ThecashewprojectisimplementedbyGIZincooperationwiththreesub-grantees:Technoserve,aUSnon-governmentalorganisation;FairMatchSupport,anot-for-profitfoundationbasedintheNetherlands;andtheAfrican Cashew Alliance (ACA),asupranationalplatformofprivatepublicpartnersinvolvedinthecashewvaluechain.
1.2 Objective and focus of the study
TheobjectiveofthisstudyistoofferacountrystudyoncashewnutproductionandthecashewvaluechaininMozambique.SinceMozambique’sprocessingsectorforcashewnutsisrela-tivelywelldevelopedthankstothesupportithasreceivedformanyyearsfromTechnoserve,thestudywillfocusontheprimaryproductionofcashewnuts,ananalysisofthefarmingsystemofcashewfarmersinMozambique,reviewongoingsupportactivitiesandthusprovideacomprehensiveinsightintothenationalcashewsector.
Thetwomajorpurposesofthecountrystudyareto:ÿ AnalyseMozambique’scashewvaluechain(withamajor
focusontheproductionandprocessingofcashewnuts)ÿ Basedontheresultsofthevaluechainanalysis,review
ongoingsupportactivitiesandproposefurtherstepstobetaken.
ThisstudyconcentratesontheanalysisofcashewproductioninMozambiquewithafocusontheNampulaprovince,whichaccountsforabout40%ofthenationalproductionandalmost50%ofthevolumeofrawcashewnutsales.
BecauseofthistheprovinceisconsideredrepresentativeoftheremainingareasofproductioninMozambiqueandtheresultsoftheanalysisandthestrategyforreinforcingthesectordevel-opedonthisbasisareseenasapplicabletothewholecountry.
Thestrengthsandweaknessesofproductionareidentifiedintheanalysisandthepotentialsfortheenhancementofpro-ductionareexplored.Threatsthatmighthamperorimpedethedevelopmentarediscussed.TogetherthiscoversthefourelementsofaSWOT analysis (see chapter 3).
Inthesecondstep,andbasedontheanalysis,astrategytoimprovethequantityandqualityofproductionofraw cashew nutsisproposedandthestepsnecessaryforitsimplemen-tationaredeveloped.
Thisanalysiswasmadesomewhatdifficultsincenoreliabledataexistsonthecashewsector,andonprimaryproductioninparticular.INCAJU,thepublicentityregulatingandsup-portingthesector,onlycollectsdataatthetradingpoints,andhencedoesnotfurnishproductiondata.Datareferringtotheproducer’slevel(yield,costandrevenuedata)areonlyavailablefromtheTIA (Trabalho do Inquerito Agrícola – the annual agricultural sample survey).
Sold volume EPV (high) EPV (low) Potenziel (Sold volume)
tons
140.000
120.000
100.000
80.000
60.000
40.000
20.000
0
2002/03
2003/04
2004/05
2005/06
2006/07
2007/08
2008/09
2009/10
2001/02
Mozambique West Africa Brazil India Viet Nam Other
tons
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
1972
1977
1982
1987
1992
1997
2002
2007
1965
% of Total 2007 Produktion
Viet Nam = 30%West Africa = 29%India = 19%Brazil = 6%Mozambique = 2%Other = 14%
15 2.0 Analysis of the Mozambican Cashew Sector with a Focus on Nampula Province
2.1 General Aspects of the Cashew Sector
2.1.1 Global aspects
Globalproductionofraw cashew nuts(RCN–whichreferstonutsintheirshell)hasinthepast25yearsexpandedfromaround0.5milliontonsto3.25milliontons(2007).TheshareofMozambique-onceaworldleaderincashewproductionandexportswithsharesofnearly40%and35%-hasrecededduringthistimetoamere2%ofglobalproductionasshownin the figures 2.1.
ReasonsforMozambique’sdecliningshareincludetheinter-nalconflictduringthe1980s,exportpolicychanges,afailedliberalisationattemptintheprocessingsector,thegeneraldif-ficultiesofintensifyingproductionsystemsbasedoncountry-widesmallholderownershipoftreesandthedifficultcontrolofvariouspestsanddiseases,aswellastherapidlyexpandingproductioninanumberofcompetingcountries.Vietnam,theregionofWestAfricaandIndiaproduced30%,29%and19%ofglobalproductionin2007,respectively,accordingtoFAO statistics.AttemptsarenowbeingmadeinMozambiquetorevivethesectorandrecoveralargershareoftheexpandingmarkettobenefitlocalproducers.
2.1.2 Development of cashew production in Mozambique
CashewproductioninMozambiquewasintroducedandmain-tainedbythePortugueseduringcolonialtimesanddeclinedafterindependence.Theagriculturalstatisticsof2005indi-cate32millioncashewtrees.
Figure 2.2 belowshowsthedevelopmentofcashewproductionduringthelastdecade;inadditiontotheregisteredsoldvol-ume(solidbars)thediagramsalsoshowsthetotal estimated production volume (EPV)assuming10%(orange line)and30% (green line)domesticconsumptionandthereforeunreg-isteredproduction.
Astheblack trend lineindicates,thesoldproducehasincreasedfromaround50,000 tonsperyear(2000/01)toabout80,000 to/year,with81,000 to/yearastheaverageduringthelastfourseasons,albeitwithoutmuchconsistencyordyna-mism.Thebigfluctuationinproductionfromyeartoyearhasbeencausedbychangesinweatherconditions.Productionishitespeciallyhardintimesofinsufficientrainfall,becauseallcashewtreesinMozambiquearecultivatedwithoutirrigation.TheslightincreaseinproductionisprobablyaresultofthepromotionofpestcontrolthroughasprayingprogrammesubsidisedbytheNational Cashew Institute,INCAJU,andtheincreasingdemandfromtheexpandingnationalprocess-ingindustrywhichhasoffsetthedecreasingyieldsofoveragetrees.Plantingratesareinsufficienttomaintainthepresentagestructureofthecountry’scashewtrees.Thereasonsforthisincludethelowreturnfromcashewsincomparisontothatofannualcropslikegroundnuts,maizeorcassavawher-everthesecanbegrownsuccessfully.Thuscashewismostlygrownonmarginalland.
Figure 2.1: Global production of raw cashew nuts
Figure 2.2: Sold volume and estimated production volumes (EPV) of cashew over time
Source: Technoserve, based on FAO statistics Source: INCAJU (see Table 1 in Annex 2)
16 2.1.3 Regional distribution of production and sales
Notrulyreliabledataexistsonthevolumeofproductionandtheprocessedand/orexportedvolumesofcashewnutsinMo-zambique.Thisisduetoseveralfactors:
ÿ ThefiguresofmarketedcashewnutsinthedistrictsarecollectedbytheextensionistsofINCAJUwhovisitlocalshopsandtraderstocollectinformationonthequantitiestheysell.However,shopkeepersandtradersmayworrythatthisinformationcouldreachthetaxauthoritywhichmightcausethemtoreportfiguresthatarelowerthanthevolumestheyactuallytraded.Hencethereisatendencytounderestimatethequantity.
ÿ Aportionofthecashewnutsareprocessedandconsumedbythefarmingfamiliesand/oraresoldtothepublicalongroadsides.Thispartofproductiondoesnoteitherappearinanystatisticaldata.Keysourcesestimatethatbetween10%and30%ofproductiongoestotheinformalsector,withdifferencesfromregiontoregionandbetweenfarmsofdifferentsize.
Theambiguityofthesefigureshinderstheexactestimationofyields,asonlymarketedvolumesarerecorded.Theexportedquantitiesalsoseemtobeunderestimated.Sincetaxesarepaidfortheexportofunprocessednuts,itissuspectedthatpartoftheexportsarenotdeclared.Hence,actualproductionmayexceedtheofficialfigures.
42%ofMozambicanfarmersowncashewtrees,albeitinsmallnumbers,withthestatisticalaveragebeingabout20treesperfarmer.Theexactnumberoftrees(estimatedtonumber32millioncountrywide)andthenumberoftreesinproduction(estimatedataround19milliontrees)areunknown.
Assumingabout32milliontreesandaproductionof80,000tonstheaverageyieldpertreeisabout2.5kg.Ifwesaythatproductionisunderestimatedby20%thentheaverageyieldisbetween2and4 kgpertree.Consideringwhathasbeensaid,theaverageyieldisestimatedat3kg/tree.Thisislowcomparedtothepotentialyieldof8to10 kg/treethatcanrealisticallybeachievedinacountrywithpropertree
management–sprayingincluded.Acceptingthefigureofabout19million productive trees,thepresentaverageyieldofthesetreesis4.2 kg/tree,basedonthevolumemarketedthroughthechannelsmonitoredbyINCAJU,and5kg/treewhenincludinghomeconsumption,nutsprocessedon-farmorsoldalongtheroadside.These figures are presented in the following table:
Table 2.1: National cashew average yield estimates, actual and potential yields per tree
Type Unit Value
Average total cashew nut production to/year 80,000
A) Average yield based on total tree population of 32 million
kg/tree 3.0
B) Average yield of ‘productive tree’ population of 19 million
ÿ based on registered marketed volume
ÿ including estimated home con-sumption and unregistered sales
kg/tree 4.2 5.0
C) Potential yield applying available production techniques
kg/tree 8 to 10
INCAJUhasbeenimprovingproduction,mostnotablybytryingtoovercomethelowlevelofreplantingthatpreventstheadequaterejuvenationofthecashewtreepopulation.However,in2005only5%oftreeownersreportedreplantingcashewtreesduringtheprevious12months.Since2004,increasingnumbersofgraftedtreeseedlingshavebeenpro-duced(1.34millionin2008)fordistributionwiththesup-portofdonorsandNGOs.
Additionally,INCAJUissupplying,atnocost,thechemicalsforsprayingtreestoprotectthemagainstpowderymildew.Thismeasurebenefited4.3milliontreesin2008–approxi-mately25%ofproductivetrees.
Nampula 48%
Zambézia 13%
Sofala 6%
Manica 7%
Gaza 7%
Inhambane 10%
Cabo Delgado 9%
Maputo 0%
17 2.1.4 Selection of a province for the study
AccordingtoINCAJU,40%oftheproductionofrawnutsisconcentratedintheNampulaprovince,withInhambane,CaboDelgado,GazaandZambeziaprovincesfollowingwithbetween21%and10%ofthetotalvolume.48%ofthenationalsalesvolumeofcashewnutscomesfromNampulaprovince.Thisshowsthatalargerportionismarketedherethaninoth-erprovinces.ThismightbeduetotheproximitytotheportofNacala,themostimportantpointofexportofRCNandprocessedcashewnuts,whileotherprovincesarefurtherfromconsumermarkets.Inthesouthernprovinces,informalmarketsmayalsoplayasignificantrole.Thefarmersand/orsmalltradersofGazaprovince,forexample,sellasignificantoftheircashewnutsdirectlytoMaputo.
BecauseofitsimportancetocashewproductioninMozam-bique,Nampulaprovincewasselectedasthepilotprovincetoimplementtheproject.Forthisreasonthestudyteamcon-centrateditsinvestigationthere.
Thenationalfiguresonthesaleofcashewnutsreflectthere-gionaldistributionofproductionandtheconcentrationofmarketingchannelsinNampulaprovince,wheremostoftherecentlyrevivednationalprocessingfacilitiesarealsolocated.Figure 2.3 on the rightillustratesthissituation:
Figure 2.3: Sales of raw cashew nuts 2007
Source: INCAJU 2009
Sold volume EPV (high) EPV (low) Potenziel (Sold volume)
tons
100.000
80.000
60.000
40.000
20.000
0
2005/06
2005/06
2006/07
2007/08
2003/04
18 2.2 Analysis of Cashew Production in Nampula Province
2.2.1 Cashew production in Nampula province (statistical data)
NostatisticaldatafortheprovinceofNampulafortheentiredecadecouldbeobtainedduringtheresearchofthestudy.Thevaluesfortheyears2003/04till2007/08areshowninfigure 2.4.
AcomparisonshowsthatthedevelopmentofsalesandtheestimatedproductionvolumeinNampularunparalleltothenationalfigures.Theaveragevolumeofsoldproductionduringtheperiodrepresented in the figure 2.4 is44,600tonsofrawnuts.
Basedonthisfigureandthenumberoftreesintheprovince,whichisestimatedtobe10 million,theaverageproductionpertreeiscalculatedatbetween4.5 kgto5.4 kg/treeifitisassumedthat20%ofthenutsmaydopassthroughtheofficialmarketingcannels.Thesefiguresarewellabovethenationalstandard.
Althoughthesefiguresareestimatesandunreliable,itcanbeassumedthatthefarmersinNampulaprovincetakebettercareoftheircashewtreesbecausetheydependmoreontheincomefromsellingcashewnuts,theironlycashcrop.
FiguresfromINCAJUonthesprayingratessupportthishy-pothesis:In2007and200818%and20%respectivelyofthecashewtreesinNampulaprovinceweresprayedasopposedtoonly10.5%in2007and13.4%in2008atthenationallevel.In200925%ofthecashewtreesinNampulaprovinceweresprayed–a5%increaseincomparisonto2008.Thetotalnumberoftreeswhichweresprayedin2009inMozambiqueisnotknown.
Figure 2.4: Sold volumes and estimated production volumes (EPV) – Nampula province
2.2.2 General aspects of cashew production and marketing
2.2.2.1 Farming systems including cashew
Today42%ofMozambicanfarmersowncashewtrees,albeitinsmallnumbersandwithbetween10to20treesperfarmeronaverage.InsomedistrictsofNampulatheshareoffarmerswhoowncashewtreesisevenhigherandreaches60%to80%.Mostofthesefarmersinheritedthetreesafterindependenceasindividualsorascommunitygroups.Cashewtreesarenotoftenamongthecropscultivatedwithinthefarmingsystem.Mostofsmallholdersaresemi-subsistencefarmerswhogrowmaize,cassava,beans,groundnutsorothercropsforhomeconsumption.Cashewtreesaremostoftenscat-teredthroughoutthefarmlandbutarenotactuallycultivated,evenwhentheyaretheonlyproductonthefamily’slandthatbringsincash.
Cashewisalsoanimportantsupplementarycropinsubsistenceproduction,especiallyindroughtyears,whenfoodisscarceamongthepoorerfarmers.ThecashewharvestinNampulastartsinOctoberafterthedryseason–forthesmallholderfamiliesacriticalseasonregardingfoodsecurity.Thereforefoodscarcefamiliesharvestthecashewnutsasearlyaspossi-bleandsellthemdirectlyinordertousetheincometobuystaplefoods.
Oneadvantageofcashewsisthatduringthefirsttwotothreeyearscashewtreesplantedwiththerecommendedspacingof12mx12mcanbeintercroppedwithstaplefoodcropsorwithothercashcropslikegroundnutsorsesame.Inthethirdorfourthyearthetreesproducethefirstfruits,providingthefarmerswithacashincome.
Becauseofthispossibleintercroppingfarmersdonotsufferfromaseverereductioninproduction.Thisevenmakesitpossibleforsmallholderstoestablishnewcashewplantationswhilealsoproducingenoughfoodforthefamily’sneeds.However,laterthecanopyofthecashewplantationclosesandintercroppingisnolongerfeasible.Productivecashewplanta-tionsarethereforealwayspurestandscomprisingofcashewtreesonly.
TherearethreeproductiontypesofcashewinMozambique:ÿ Asignificantpartofthecashewtreesareabandoned,
growingoncommunalland(bushland)anddonotbe-longtoanindividualfarmer.Thefruitsofthesetreesarepickedoccasionallybythelocalpopulation.Theproduc-tionandyieldofthesetreesarenotknown.
ÿ Cashewtreesarealsoownedbysmallholderswithabout10to20treesonaverage,rangingfrom5to10trees/smallholderuptoahundredtreesformedium-scalefarm-ers.Thesetreesdonotgrowaspartofaregularlyspacedpopulation,butarescatteredalloverthefarmlandor,Source: INCAJU and Fichas do Supervisor Provincial
19 morefrequently,nearhouses.Manysmallholdersdonotconsidercashewsasacrop,butjustharvestthefruitsreg-ularlywithouttakingmeasurestoincreasetheyieldand/ortoimprovethequalityofthenuts.Duetopoorreplant-ing,suchtreesarefrequentlytooold,manyolderthan30years,andassuchproducelessandlowerqualitynuts(thenutsofoldtreesandoldvarietiesaregenerallysmallerthanthoseofyoungtrees).Inadditiontothistheyieldandthequalityofthenutsarefurtherreducedbecausetherecommendedagro-technicalmeasuresarenotcarriedout.Inthesecircumstancestheyieldisestimatedtobeabout3 kgorlessofrawnutspertreeonly.
ÿ Finallytherearetreesthatbelongtofarmerswhotakecareofthem,spraying,weedingandpruningthemregularly.Mostofthesetreesarescatteredthroughoutthefarmlandandareofallagessincethesefarmersreplantthem,es-peciallyafteryearsofhighproductprices.Aportionoftheseyoungertreesareinplantationswithregularspacing.Theyieldofsuchtreesbetween8to25yearsoldcanbeestimatedat8to10 kg/tree.Somemedium-sizedfarmshavehundredsofcashewtrees.
2.2.2.2 Environmental aspects of cashew production
Cashewtreesaregenerallydeemedsuitableformarginallandthatcannotbeusedforannualcropsormoredemandingtrees.Duetoitsphysiologicalcharacteristicstheplantcansurvivedryspellsmuchbetterthanothercrops(e.g.citrus).Infact,theshadingofthesoilbythetreepermitsgrassestothrivewheretheywouldotherwisehavebeenscorchedbythesun.
Anotherenvironmentalaspectconcernsthepossibleimpactofclimatechange.Itisexpectedthatstormsandcycloneswilloccurmoreoftenandwillbestrongerthaninthepast.AnexampleiscycloneJókwewhichdestroyedbetweenonethirdtohalfofallcashewtreesinMongicualdistrictin2008,andwherefallentreescanstillbeseentoday.Asacountermeasure,theprojectwillpromotethesubstitutionoftall-growingtrees,recommendproducingonlyseedlingswithashorttrunk(half-trunk).Itwillalsorecommendplantingcashewasaplan-tation.Thishelpsminimisethedamagefromcyclonesashalf-trunkcashewtreesarelesspronetobeinguprootedbystrongwinds,especiallywhengrownaspartofaplantation.Anaddedadvantageisthefactthatitiseasiertocarryoutagro-technicalmeasuressuchaspruningorsprayinginplantationsofsmallertrees.
Itisunknownwhetherandhowclimatechangewillinfluencetheannualquantityanddistributionofrainfall.Butsincecash-ewismoreresistanttodroughtthanmostothercrops,lowerannualrainfallwillimprovethecompetitivenessofcashew.
Insummary,cashewisatreecrophighlyadaptedtotheeco-system(climate,soilandweatherconditions)inthenortherncoastalareasofMozambique.
2.2.3 The cashew value chain
AccordingtoarecentstudybyTechnoserve,only18%ofthevalueaddedwithinthechainfromtheMozambicanproducertotheconsumeroutsidethecountrytakesplaceinMozambi-que.ThisisduetotheongoinglowlevelsofRCNprocessinginMozambiqueandthefactthatroastingandpackagingforfinalconsumption(42%ofthevalueadded)isliterallynon-existentinthecountry.
Followingitsindependence,theprocessingofnutsinthecoun-trydeclinedandpracticallyceasedin2002.Duringthisyear,theentiremarketedproductionvolumeofabout50,000tonswasexportedasrawnuts.However,sincethentheprocessingindustryinNampulaprovincehasbeenrevivedwiththesup-portofforeignassistance.Anumberofprocessingfactoriesstartedoperating(again)in2001andin200836%ofthemarketedproductionvolumewasprocessedinMozambique.
Afteradisputeaboutminimumwagesinthecashewsectorwaseventuallyresolvedinfavouroftheprocessingindustry’sin-terests,andduetotheincreasedmarginsfortheprocessorswhichfollowed,thenumberofoperatingprocessingfactorieswasforecasttoincreaseto25in2008/09.Inthesameseasontheprocessingvolumeofcashewnutswithinthecountrywasforecasttoreach35,500tons.
Anumberofstakeholdersareinvolvedinproducing,market-ing,processingandexportingcashewnuts.UptosevenpartiescanbeinvolvedinchannellingtheproductfromthegrowertotheconsumeroutsideMozambique. Figure 2.6 on the following pageillustratesthecomplexmarketingchainofcashewnuts
TheupstreamactorsarenotincludedinthischapterasINCAJUistheonlyactorsupplyingtreeseedlingsinsignificantnum-bersaswellaschemicals(freeofcost)forsprayingthetrees.INCAJUisalsosubsidisingtheacquisitionofsprayers.There-fore,otherpotentialinputsuppliers(traders)playaninsignifi-cantroleandcanbeneglectedinthepresentcontext.
Anumberofnational and international NGOs and donorswereandstillareactiveinthesectoratthefarmers’level,or-ganisingtechnicalassistancetosmallholders,promotingpro-ducers’organisationsandtryingtoimprovemarketlinkagesandincomefromcashewproduction.InNampula,prominentNGOsinthesectorare,forexample,theCooperative League of the United States of America (CLUSA)aswellasAjuda de Desenvolvimento de Povo para Povo (ADPP).DonorscurrentlyworkingwiththefarmersinNampulaincludetheNetherlands Development Organization (SNV)andtheAgrifuturo ProjectfundedbyUSAID.
Othersorganisationshavebeeninvolvedinrecentyears.Apro-jectfundedbytheFrench Development Agency (AFD),forex-ample,workedwith43farmergroupsinNampulabetween2000and2006.
Foreign processor
Importer Processed exporter
Consumer
Roaster, Salter /Final Packaging
Retrail / Distribution
Cashew producer
Local shop owner
Farmer Associations
Broker
Processing factory
Raw exporterProcessed exporter
Production
Colection and transport
Processing
Exporting
FOREIGN
DOMESTIC
20
Raw cashew nuts (RCN) enterthelocalmarketwheretraders and buyersareinvolved.Dependingonthesizeofthefarmorproductionofcashewnuts,thelocation(near/farfromfac-toriesand/orroads)andthedegreeoforganisation,farmersselltosmalllocaltraders,biggertradingcompaniesordirect-lytothefactories.Inmostcases,severalbuyersarelocatedbetweentheproducerandthecashewfactoryortheexporter(see Figure 2.5).Thisstructureoftenreducestheprofitfortheproducersandalsothesmallerbuyerstoaminimum.Itshouldalsotobenotedthatnodifferenceisgenerallymadebetweengoodandpoorqualityraw cashew nuts.Somefactoriesstartedtopayapremiumforbetterqualityrawmaterialafteranini-
tialselectionatthefarmlevel,butnocomprehensivequalitysystemisinplace.Pricesvaryaccordingtotheseasonratherthantothequalityoftheproduct.
IftheRCNarenotdirectlyexportedforfurtherprocessingto–mostly–India,theMozambicanprocessing factoriescon-stitutethenextstepinthecashewvaluechain.Afterthebreak-downoftheindustry,manysmallerfactoriesopenedinthenorth(NampulaandCaboDelgadoprovinces)andthesouth(GazaandInhambaneprovinces).Theirnumbervariesfromseasontoseason.Everyyearsomesmalleronesstopprocessing(mostlyduetolackoffinancingforrawmaterials)andothers
Figure 2.5: The cashew marketing system
Source: Technoserve, ibid.
+ 42%
+ 40%
10%
+ 5%
+ 1%
+ 2%
100%
Only 18% of the value
added in the final
retailprice takes
place within Mozambique
Producers* Traders Processors Exporters Roaster & Packers
Retallers & Distr.
Total
Selling Price (per kg)
US$ 2.48 US$ 2.86 US$ 4.05 US$ 4.28 US$ 15.00 US$ 25.00
Value Added (per kg)
US$ 2.48 US$ 0.38 US$ 1.19 US$ 0.23 US$ 10.72 US$ 10.00 US$ 25.00
Domestic Foreign
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
21 Figure 2.6: Value added at each link of the value chain
(re)open.Approximately25canbecountedinthewholecountry,halfofwhicharesituatedinNampula.Theprocessingin-dustryhasbeen–andispartlystill–heavilysupportedbyexternal donors/NGOs.ThismostsignificantoftheseistheAmericanNGOTechnoservewhichhasgreatlyassistedfac-toriesduringoveryears.
Processedcashewkernelsarethenexportedthroughvariouschannels.Inthesouthofthecountry,exportsmainlygotoSouthAfricaviaroad.ThefewprocessingfactoriesinGazaandInhambanelooselycooperate,forexamplethroughshareduseoftrucks.InthenorthofMozambique,themajorityofprocessorsareorganisedintheassociation Agro Industriais Associados (AIA).ThroughitsofficeandwarehouseinNacala,AIAjointlyexportstheprocessedcashewkernelsofitsmembersthroughcontainerships.TheproduceofafewofthesmallerfactorieswithoutofficialAIAmembershiparealsomarketedthisway.OnlyoneofthelargerfactoriesinNampula–OLAM International –doesnotexportingthroughAIA.Theinterna-tionalcorporategroupusesitsownmarketingchannelsandapparentlyseesnocomparativeadvantageinjoiningAIA.
SinceAIAwasfoundedithassolditsexporttoonesoleclient,theDutchbroker Global Trading & Agency BV.Global TradingimportstheprocessedkernelstoEurope.AfterfurtherroastingandpackagingintosmallsachetsthecashewsaresoldontheEuropeanmarket.Mostofthevalueaddedisdonewith-intheselaststeps(see Figure 2.6).Asisshown,lessthan20%oftheconsumerprice(finalproductvalue)isgeneratedinsideMozambique(production,trading,processingandexporting),whileroastersandretailerssharethebulkofthevalueadded.Producerscapturedonly10%ofthefinalproductvalue.ThenumbersinFigure 2.6aboverelatetothesituationin2007/8.Evenifabsolutepriceshavechanged,therelativefig-ureshavenotalteredsignificantly.
FurtheractorsinvolvedinthecashewsectorinMozambiqueincludetheGovernmentbodyInstituto Nacional do Cajú (INCAJU),thenational association Associação dos Industriais de Caju (AICAJU)aswellastheAfrican Cashew Alliance (ACA).
Source: Technoserve, ibid
Table 2.2: Mozambican stakeholders in the cashew sector and their functions
Stakeholder Function
~ 1 million smallholders Production of raw nuts
Private service providers (most often themselves producers of cashew)
Provision of contracting services (spraying cashew trees)
Local and regional cashew traders Collection of raw nuts and sale to processors or raw nut brokers/exporters
Local processors (around 25) Processing of raw nuts; sale to export brokers; local sales
Brokers Brokerage of transactions between local and foreign stakeholders
AIA (Association of processors for joint marketing of processed nuts)
Servicing company focusing on exporting and marketing of processed kernels
Donors and NGOs, e.g. CLUSA, ADPP, SNV, USAID, AFD
Promotion of producers’ associations; technical assistance to producers and proces-sors; introducing value-added activities
AICAJU (Industry association) Promotion of industry interests, consistent policies and practices among its members
INCAJU (Governmental Cashew Institute)Policy setting; extension services providing seedlings and pesticides; provision of loan guarantees to processors; export tax collection
ACA (African Cashew Alliance) Marketing support to African cashew producers and processors on the world market
22 INCAJUisanindependentGovernmentinstituteresponsibleforthepromotionofthecashewsector.Theinstitutehasde-centralisedstructuresinthecashewregionsofMozambiqueandprovidesextensionservicestofarmersatthedistrictlevel.Ontheregionalandnationallevel,INCAJUisresponsibleforsettingpolicy.ItisfinancedbytheexporttaxonRCN,althoughintroducingINCAJUinthebudgetoftheMinistryofAgricul-tureiscurrentlybeingdiscussed.
Moremarginalactors–sofar–areAICAJUandACA.AICAJUisanassociationofindustrialplayersinthecashewsector.ItissupposedtorepresenttheinterestsofthoseactorstotheGovernment (INCAJU).However,AICAJUdoesnotseemveryactiveinlobbyinganditsorganisationalstructuresarestillweak.ACAconstitutesafederationofmanyactorsalongthecashewvaluechaininAfrica.Membershipiscross-national,anditsaimistosupporteffectivemarketingofAfri-cancashewontheworldmarkets.InMozambique,ACAisnotyetwell-established;anationalofficehasyettobebuiltup.ThefuturevisionofACAistosupportmarketlinkagesintradingprocessedkernelsandrepresentingAfricanprocessorsandproducersontheworldmarket.
Table 2.2liststhestakeholdersontheMozambicansideandtheirmainfunctions:
2.2.4 SWOT analysis of the cashew sector
Inordertogetprimarydataonproduction,toanalysethefac-torsunderlyingtheactualproductionfiguresandtodeterminestrengthsandweaknesses,themissioninspectedtreesandconductedgroupinterviewswithproducersinvariousdis-trictsoftheprovince,interviewedkeypublicandprivatesectorstakeholders,andcollectedandanalysedadditionalstatisticalandotherinformation.Somevagariescontinuetoexistinthedatacollected:
ÿ The exact age of the trees is often unknown. Manyproducerscouldonlyguesstheageoftheirtrees,especiallyiftheywereplantedbythepreviousgeneration.Suchtreesareusuallyover30yearsold.
ÿ The intensity of care of the trees varies considerably between owners and over time. In intensive treatment, trees will be pruned regularly (at least every 3 to 5 years), and each year unwanted new shoots on major branches will be removed (called limpeza by some).
ÿ The term limpeza is also used when referring to the weed ing of the immediate area below the tree, creating confusion of the true meaning of the respondent’s answer.
ÿ The level of home consumption and of production of nuts not sold through channels that are monitored by INCAJU can only be estimated and needs to be kept in mind when estimating the total yield of cashew trees.
23 2.2.4.1 Results of the analysis
Apartfromthegeneralweaknessthatmanysmallholdersac-tuallycollect cashewnutsanddonotreallycultivate them,theresultsoftheanalysiscanbesummarisedaccordingtothefourcriteriaofSWOT analysisaspresentedinthefollowingsub-chapters.
StrengthsSeveralconditionsregardingthecashewsectorinNampulaprovinceconstitutestrengths,atleastincomparisontootherregionsofthecountry:
There is a long tradition of producing cashew nuts in the region.ThecashewtreewasintroducedbythePortugueseal-readyinthe16thcentury.Duringthe1960sMozambiquealreadyexportedasignificantamountofcashewnutstoIndia,whereasduringthe1970sMozambiquewastheleadingproducerofcashewintheworldwithashareofbetween30%and40%ofglobalproduction.Asaconsequenceofthisthecountryhasagoodknowledgeofcashewgrowing,producingandprocessing.
The capacity to process part of the production volume is increasing. PrivatelyownedfactoriesinMozambiqueareca-pableofproducingabout30,000tonsto40,000tonsofraw cashew nuts.TheprocessingindustryisconcentratedinNam-pulaprovincewhichhasashareofabout65%inthenationalcapacity.ThisisduetothefactthatthemainexportpointforRCNandprocessedcashewkernelsistheportofNacalaintheprovinceofNampulawhichkeepsexportcostsrelativelylow.Foryearsthecashewprocessingindustryhasbeensup-portedbyUSAIDthroughtheNGOTechnoserve.
Due to the soil and climatic conditions and the general distance of consumer markets (in the country) there are few crops that can compete with cashew.Cashewisgrownmainlyintheprovincesanddistrictsalongthecoast.Thecash-ewtreeisrelativelyresistanttodroughtandhasnohighrequire-mentsregardingsoilfertility.Forthisreasoncashewtreesgrowonthemarginal,drysandysoilsatthecoast,whereotherfoodcropsdonotgrow.Inadditiontothis,NampulaprovinceissituatedfarfromMaputoandotherbigcitieswhichhavea
highdemandforcrops.Forthisreasonfreshcropscannotbemarketedeasilyandthenonlywithhightransportcosts,whereascashewnutsareexportedviatheportofNacala.Thismakescashewsmorecompetitive.
Cashew nuts are often smallholders only cash crop.ThevastmajorityofsmallholdersinNampulaprovincearesub-sistencefarmers.Theironlycashcropisthecashewtree.Forthisreasonthecashewtreeplaysabigroleinthelivelihoodofsmallfarmers.Thecashewharveststartsattheendofthedryseason,whichisthemostcrucialseasonforpoorfarmers’survival.Theyusethischancetoharvestthecashewnuts,sellthemimmediatelyandbuyfoodwiththerevenue.Cashewnutsarethereforealsoimportantintermsoffoodsecurity.
Production in the region benefits from its proximity to the port city of Nacala, the export harbour situated in Nampula province.Forthisreasontransportcostsand,asaconsequence,exportcosts,arerelativelylow,whichmakescashewproductioninNampulamorecompetitivethaninotherprovinces,eventhesouthofthecountry,whichoffersbetternaturalconditionsforgrowingcashew.Bythesametoken,itisassumedthatthisiswhytheprocessingindustryisconcentratedinNampulaprovince.
WeaknessesWhilethelistofstrengthsisgenericratherthanspecific,thelistofweaknesses(orconstraints)observedisexhaustive.Thefactorsrestrictingproductionhavebeengroupedintofiveareas.Also,whenidentifyingproblems,themissiontriedtoidentifyunderlyingrootcauses.Thedistinctionofcause-effectrelation-shipsformsabasicstepoftheassessmentmissionandallowstheformulationofsolutionstothemostsignificantconstraints.Thefollowingweaknesses/constraintshavebeenidentified:
Low productivity of smallholder cashew production. TheaverageyieldinMozambiqueisbetween2to4kgRCNpercashewtree.Thisisverylowtakingintoconsiderationthatyoungcashewtreesbetween10and25yearsoldhavethepotentialtoproducebetween10and15kgpertree,somewellmanagedtreescanevenproduceupto60kgperyear.
24 Low production potential of existing trees.ÿ Manyoldand/orabandonedtrees(strongdeclineofyield
afteryear25).Thecashewtreestartstoproduceinitsthirdyear,reachesitspeakbetweenthe10thand25thyear,andafterthe25thyearthereisadeclinefromyeartoyear(see Figure 4.1 in chapter 4).Itisestimatedthat25%to30%ofthecashewtreesinMozambiqueareolderthan25andupto40yearsold.Thesetreesproduceverylittleordonotproduceatall.Fromaneconomicperspec-tivethesetreesshouldbereplacedbynewtreeswithahigherproductionpotential.
ÿ Inadditiontolowproduction,theoldtreesproducerela-tivelysmallnuts,consideredtobeoflowquality.Asde-scribedabove,manyMozambicansmallholdersinheritedcashewtreesfromcolonialtimesanddonotreallytakecareofthem.Thereforemanytreesareabandonedandgrowinthebushareasoncommunalland.
ÿ Lowgeneticproductionpotentialofoldtreevarieties.Oldertreevarietiesdonotoftenhaveahighproductionpotentialsincetheywereplantedbeforeselectionorclon-ingwasintroduced.
Insufficient crop and pest management (low usage rate of ICPM).Mostsmallholdersdonotconsidertheircashewtreesasacroptobecultivated,butinsteadjustharvestorcollectnutstosell.Forthisreasonnospecificcultivationtechniquesareapplied,whichresultsinlowyields.Onlyabout2.5%ofthetreesareprunedregularlyand20%to25%ofthetreesaresprayed.Onlyabout25%offarmersweed.Also,noreliableinformationexistsabouttheeconomiceffectoftheseopera-tions.ItwasreportedthatneitherINCAJU,whichrecommendssprayingcashewtrees,noranyotherresearchinstitutionshavecarriedoutfieldtrialstodiscovertheeffectofsinglecultiva-tiontechniquesorofIntegrated Crop and Pest Management (ICPM).However,theyieldoftreesthatarenotyetoverage(treesyoungerthan30years)willincreasefromabout3 kg/treeto8-10 kg/treeifICPMisapplied,accordingtotheesti-matesofINCAJU’stechniciansandfarmerswhoappliedthesetechniques.Thismeansthatifthemajorityofthefarmersap-pliedICPM,theyieldandthereforetheproductionwouldeasilymorethandouble.
Damage to trees by fires. Throughoutthecountry,andinNampulaprovince,farmersburngrassandbushesattheendofthedryseasoninordertoclearthelandforthenextcrop.Thesefiresfrequentlygetoutofcontrolanddestroycashewtrees.Incaseswherenoweedingwasdone,suchfiresburnthecashewtrunksandthegrassburningunderthetreesdestroystheirleaves.Itisestimatedthat30%to50%ofthetreesaredamagedinthiswayeveryyear.Althoughmostofthemrecov-erafteroneortwoyearsthelossinproductionandconsequentdropinincomeinjustoneyearistremendous.INCAJUhastriedformanyyearstostopthispractise,butwithlittlesuc-cess,suggestingitwillcontinue.
Insufficient replanting rates. Asdiscussedabove,thereareabout10 millioncashewtreesinNampulaprovince.Ifitisassumedthatthetreesreach30years,1/30ofthetreesshouldbereplantedeveryyearinordertomaintaintheagestructure,about333,000trees.Assuminganimprovedsurvivalrateof75%oftheseedlingsafterplanting,thenabout410,000cash-ewtreesseedlingshavetobeplantedeveryyearinordertomaintaintheagestructureofthetreepopulation.
ThecapacityoftheINCAJUnurseriesinNampulaprovinceiscurrentlyabout700,000seedlingsannually,however,onlyabout230,000seedlingsareproducedannually.Furthermore,theactualsurvivalrateisestimatedatonlyabout50%,whichmeansthatonly115,000ofthecashewtreesplantedeveryyearsurvive. Theconclusionfromthesefiguresisthatthepresentplantingrateisinsufficienttoevenmaintainthegivenagestructure,whichisdeterioratingastheaverageageofthecashewtreesincreases.Thereisthereforeadangerthattheaverageyieldandthetotalproductionwilldecreasefurtherunlesstheeffectsfromtheagingtreesarenotcompensatedbyothermeasures,suchasanincreaseinsprayingand/orpruning.
Inordertosignificantlyimprovetheagestructureofthetreepopulationmoreoldtreesmustbesubstitutedeveryyear.Itisassumedthatonethirdoftheexistingcashewtrees,aboutthreemillion,areolderthan30years.Ifthesetreesaretobereplaced
25 duringthenext10yearsthenanadditional300,000treeshavetobeplantedeveryyear.Assumingasurvivalrateof80%,thenanother400,000seedlingshavetobeplantedinNampulaprovinceannually. Thesecalculationsshowtheneedofaprogrammethatensurestheproduction,distributionandsuccessfulplantingofabout800,000seedlingsannuallyduringthenext10years.
Lack of interest in planting cashew trees. Therearedifferentreasonsforthelowreplantingrate.Asdiscussedabove,oneimportantreasonisthelackofinterestinreplantingamongthosesmallholderfarmersthatdonotseecashewsasacom-mercialcrop.Inadditiontothisisthatmostsmallfarmersdonothavethefinancialmeanstobuyseedlingsand/orthefamilylabourisinsufficienttoclearfields,digholes,plantseedlingsandtakecareofthemproperly.Theabsenceofassistancebytheextensionserviceisanotherreasonbehindthelackofin-terestinplantingtrees,especiallyinremoteareas.
Restricted availability of good quality tree seedlings at the village level.
ÿ Insufficientinvestmentintreenurseriesÿ Inefficientmanagementofnurseriesÿ Weaknessesofthedistributionsystemÿ Noinvolvement(andinvestment)oftheprivatesector
duetomarketdistortion(freetreeseedlingsdistributedbyINCAJU )
TheproductionofcashewseedlingsisdoneexclusivelybyINCAJU,whichdistributestheseedlingstovillages.INCAJUalsoownsthemothergardensfromwhichtheclonesaretakentograftontoseedlings.Themothertreesareselectedfrommod-ernvarietieswithareducedtrunkheightandwithahighyieldpotential.Thishasadoublepositiveimpact:
(1)thepruningandsprayingcanbedonemucheasierandmoreefficientlyand(2)thesetreesarelessvulnerabletostorms(cyclones),whichaccordingtoforecastswilloccurmoreofteninthefutureduetoclimatechange.Inadditiontothis,thesevarietieshaveahigheryieldthantheexistingtrees.
SeedlingproductionbyINCAJUsuffersfromproblemsthataretypicalfornurseriesrunbystateenterprises.Managementofthenurseriesisgenerallypoor.Inonecasehalfofthegraftedseedlingsdidnotsurvivebecausethegraftingwasnotdoneproperly.Itisclearlytheresponsibilityofthemanagementtoseetoitthatlabourersaretrainedandmonitoredappropriatelysothatthequalityofworkissatisfactory.
NurseriesinMozambiquehavetoensurethatadequatemeansoftransportareavailablefordistribution,asfarmerscannotfetchtheseedlingsfromthenurseriesthemselves.However,INCAJUdoesnothavesufficienttransportcapacitiestodis-tributeseedlings.Asignificantportionofthemarethereforenotdistributedorarenotdistributedintimeorattherighttime.Clearlythismakesnosense.
Thesameappliestoirrigation.Inmanycasesthelackofanadequateirrigationsystemordisrepairwerebehindnurserieswhosecapacitieswereonly50%orless.
INCAJUgivesupto50seedlingstosmallholdersfreeofcharge.Evenifafarmerbuysmoreseedlingsheonlyhastopayanominalamountwhichcomesnowhereneartocoveringthecosts.Thismeansthattheproductionofseedlingsishighlysubsidised,whichisthemostimportantreasonwhythepri-vatesectorisandwillnotbeinterestedinproducingcashewseedlings.
Insummary,theanalysisshowsthatthereareconsiderablein-efficienciesinINCAJU’sproductionofcashewseedlings.Inthelongruntheproductionofseedlingsshouldthusbetrans-ferredtoprivatesectorenterprisesworkingundercompetitiveconditions.Thisstimulatesefficiencyandamarket-orientedproductionanddistribution.
Whenseedlingsareproducedbytheprivatesector,thefarm-ershavetopayforthem.AccordingtoinformationreceivedfromINCAJU,seedlingscostabout15MTsto20 MTstoproduce.With70seedlings/hathecostsfortheseedlingsamounttoabout1,400 MTs(48US$),whichisbetween10%and15%ofthetotalcostsofestablishingacashewplanta-
26 tion.Forthisreasonitisnotexpectedthatthesecostswillsignificantlyinfluencethewillingnessoffarmerstoplantcashewtrees.
Low rate of survival of planted tree seedlings. Asdiscussedabove,thesurvivalrateoftreesisestimatedtobeonlyabout50%atpresent.Thisisduetoreasonssuchasaninefficientdis-tributionsystemwhichresultsintoomuchtimebetweentheseedlingsleavingthenurseryandbeingplanted,atimeduringwhichtheyarenotwatered.Anotherconsequenceofthelackoftransportisthedelayindeliveringtheseedlingstovillages,whichmeansthatfarmerscannotplanttheseedlingattherighttime.Also,theplantinghastobedoneatthebeginningoftherainyseasonafterthefirstheavyrainfalls,otherwisetheseedlingsdiebecauseofwaterstress.Thisisonereasonforthelowsurvivalrateofplantedcashewseedlings.Anotherdifficultyforsmallholdersisthattheseedlingsareusu-allydeliveredtothevillage,whichisoftenseveralkilometresfromthefield.Theburdentobringtheseedlingtothefieldthenlieswiththesmallholderwhodoesnothaveanytransport.Insomecasestheseedlingsremaininthevillageforseveraldays–andinmostcaseswithoutwater–beforetheyareplanted.Thismeansthattheseedlingsareplantedwhileunderwaterstress,whichlowerstheirsurvivalratefurther.Insomeyearstherainfallisirregularwithdroughtsinbetween.Ifadroughtpersistsformorethanoneweek,theplantedseed-lingshavetobewatered,whichisaheavyworkloadforthefarmerbecauseveryoftentheyhavetocarrywateroveradis-tanceofseveralkilometrestothefieldandwatertheplantsbyhand.Thuswateringisnotdoneregularlywhichresultsinalargepercentageoftheseedlingsdying.Additionally,themajorityofthesmallfarmersdonotpossesstheproperplantingtechnique.Onemethodistoputorganicmaterialintotheplantingholewhichhelpstoretainwaterforalongertimeandmakesitavailabletotherootsoftheseedlings.Inthiswaytheseedlingsurviveslonger,evenwithoutrain.
Also,strongwindoftenbreaksthegraftedseedlings.Thiscanbeavoidedbytyingtheseedlingtoasupportingstick.
Low quality nuts. ThequalityofcashewnutsproducedinMozambiqueisrelativelylow.Thisresultsinanlowaverageprice.Reasonsforthisaremanifold:
ÿ Smaller nuts growing on older trees. Asarulethenutsfromoldtreesaresmallerthannutsfromyoungtreesortreesofmediumage.Thesizeofthenutsisoneimportantcriterionfortheirquality.SincethecashewtreesinMozambiqueareoverage,theaveragequalityofnutsisbelowtheinternationalaverage.Accordingtoproc-essors,thenutcountisoftenabove200nuts/kg,whichin-dicatesthattheyarenothighgrade(180nutsmaximum).
ÿ Trees affected by diseases. ThemostprominentdiseaseamongMozambicancashewsispowdery mildew disease (PMD),whichleadstoshrivellednutsandlowoutputratios.Thediseaseismoreprominentnearthecoastandintreeswhichhaveaclosedcanopyinwhichmoistureiscontainedandwherethetemperatureishigher.Treevarietieswhichareresistanttothisdiseasehavebeenfoundtoyieldlessthannon-resistantvarietieswhichhavebeensprayedproperlytocontainthedisease.However,presentlyonly20%oftreeshavebeensprayed.ApartfromPMD,otherdiseasesoccur,buttheyhavebeenoflittleimportanceuntilnow(e.g.anthracnose,afungalinfectionaffectingtreesinthenursery,andheli-opeltis,apestaffectingyoungshootsonexistingtrees).Also,wheninsectsdamagethenuts,thekernelisoftenpartlycolouredblackorhaveholes.Suchkernelscannotbesold.
ÿ Inadequate harvesting and post-harvesting techniques. Cashewnutsarenormallyharvestedtwotothreetimesaweekbycollectingthefruitswhichhavefallenfromthetrees.Ifhiredlabourersareused,theyarenormallypaidperkgofcollectednuts.Inordertoincreasetheirsalarysomejustpickthosefruitsthatareeasyandquicktopick.
27 Afterharvestingandseparatingthenutsfromthecashewapplesthenutshavetobedriedinthesunfortwotothreedays.Becausethenutslooseweightwiththedryingprocessfarmerstrytosellthemwithahighermoisturecontentthantherecommended12%to14%.Ifthesenutsarestoredforweeksorevenmonthstheywillstarttorot.Cashewnutsshouldalsobestoredinjutebagsinsteadofplasticbagsasisfrequentlydone,sincetheycannotbreathinplasticbagsandbecomemouldyeasily.
ÿ Highly inefficient marketing system. Smallholderssellsmallquantitiesofnuts,sometimesonlyafewkilograms,tolocalshops.Buttheselowsellingvolumesleadtohigherunitcostsforthebuyersthatcollectthenuts.Forthisreasonsmalltradersorshopsareneededtocollectthenutsandsellbiggerquantitiestomiddle-men.Insomecasesthesemiddlemencollectevenbiggerquantitiesandsellthemtowholesalers,whosellthemtoexportersortotheprocessors. Ateachstepmoneyisusuallypaidinadvancefromthefinalbuyertothosethatselltohim,sothatthosebuyingfromthefarmerscanbepaid.Ateachstepthelossofsomepercentageoftheadvancedmoneymustbeaccountedforinordertomaintaintheprofitmargin,whichalsodepress-esthepricepaidtotheonesselling,andfinallythatpaidtotheproducers. Insummary,thismarketingchainofseverallevelsisineffi-cientandreducesthefarmgatepricesforsmallfarmers.Duetopoorinfrastructure(suchasbadroads)transporta-tioncostsareveryhighfortraders,whichreducesthefarmgatepricesfurther,especiallyinremoteareas.InadditiontotheseinefficienciesthereistheexportbanonRCNatthebeginningoftheharvestseasonandtheexporttaxof18%whichreducesfarmgatepricesfurther.Marketinformationsystemsthatincludecashewhavebeenbuiltupwithdonorsupport,inwhichdataisregularlycollectedatthedistrictlevelwithinformationprocessedbyINCAJU (or MINAG’s Statistics Division) andthenbroadcastviaradio.
However,reliableindependentmarketinformationsystemsarecostly,andthereforeinformationcollectionmaynotincludealldistrictsorbedonewiththerequiredfrequency.Also,thecontinuationofdonor-initiatedactivitiesinthisareahasnotalwaysbeenguaranteed.Effortsaredependentonunderstandinghowtheagentsinthesystembenefittheproducers,benefitswhicharesometimesnotmeasura-ble.Inseveralcasesprioritiesinthedistrictshaveledtotheuseoffundsmeantforcollectingmarketinformationformoreimmediateactivities.Also,specificdifficultieswithdonorfundinghaveattimesimpededtheuninter-ruptedfunctioningofactivities.Smallholders,especiallythoseinthemoreremoteareas,havedifficultiesingettingindependentandreliablemar-ketinformation.Tradersoftenhavebetterinformationandthereforehavemoremarketpower.ThistooreducesthefarmgatepriceofRCN.
2.2.4.2 Opportunities
Theanalysisalsoshowsthatthereareopportunitiestoim-provetheproductivityandproductionofcashewnutsintheprovince.Thesefactorsinclude:
An increasing demand for cashew nuts on the world market. Theworldmarketforcashewnutshasbeengrowingsixfoldsincethe1980s,from0.5milliontonstoover3milliontonsin2006and2007.AccordingtoTechnoserve,thecompoundannualrateofgrowthwasstillover7%duringthefiveyearsleadingupto2007.
Expanding processing capacity in the country.Technoserveandotherdonorshavebeeninvolvedinpromotingcashewprocessingandthecountrynowhasaprocessingcapacityofnearly36,000 tons.Thereisevenawillingnesstoexpandtoaccommodatetheincreasinglocalproductionvolumesinceobstaclesthathamperedtheprocessingcapacitybetween2006and2008havebeenremoved.
28 Strong involvement of the private sector in processing. Whiletherewasjustoneprocessorinthe2001/02season,by2009thenumberofprocessorshadincreasedto25accordingtoTechnoservedata.Theseareprivateenterpriseswhichhavetocompetesuccessfullyintheworldmarket.Whileatpresenttheybenefitfromdonorsupport,INCAJUofferedbankguar-anteesandtheprotectioncreatedbytheearly-seasonbanonexportsofraw cashew nutsaswellasthe18%exporttaxonunprocessednuts,thereisachancethat,withastrongmana-gerialcapacity,severalmayprovestrongenoughtocompetesuccessfullyintheworldmarket.
Potential to exploit market niches (ex. Fair Trade).Thereisapotentialtoseekmarketnichesthathelptoattainpremiumpricesintheworldmarket,e.g.byproducingundertheFairTradelabelorinsimilarsetups.However,inordertobenefitfromthis,thesmallholdersneedtocreateorganisa-tionsthatcanplayaroleinmarketingandprovideextensionadvicesothattheycanmeettheconditionssetbymarketpartners.
Expected increase of the producer’s price. Increasedpricesamongproducerscanbeexpectedforthreereasons:
ÿ Increasing demand for cashew nuts in the world market. Asstatedinthepreviouschapters,theglobaldemandhasbeenincreasingalmostexponentiallyforovertwodecades.Theauthorshavebeenunabletofindastudythatprojectsthepasttrendsintothefuture.Suchastudywouldhavetoconsiderthemarketpotentialbasedonpercapitacon-sumptionintheimportingcountriesandmaybecomparethedevelopmentovertimewithsimilarproducts(e.g.Macadamianuts).Thedisruptingeffectsoftheworldwidepeakinagriculturalproductpricesin2008,andthesub-sequentdecreasethrougheconomicstagnationin2009,wouldneedtobetakenintoaccount.
ÿ Increasing demand by the local processing industry. Thishasbeendescribedinthepreviouschapters.Itmustbementionedthattheincreasingpercentageofrawcash-ewbeingprocessedinthecountrysignifiesareductionof
INCAJU’sincomeandhenceoftheGovernmentofMozambiquefromthetaxonexportsofrawnuts.
ÿ Potential to streamline the marketing chain. Thereisapotentialtoreducetransactioncostsinthemarketingchain,mostnotablybybetterorganisingtheproducersandthewaytheyselltheraw cashew nuts.However,farmerorganisationsneedsupportforsuchimprovements.
2.2.4.3 Threats
AnumberofthreatsalsoexistthatMozambicanproducerswillhavetotakeintoaccount.Theseinclude:
Natural disasters that may destroy trees (increasing threat of cyclones).Theeffectofnaturaldisasterswasclearlydemon-stratedin2008,whencycloneJókwepassedthroughNamp-ulaprovinceanddestroyed1.47millioncashewtreesand113,000graftedseedlingsanddamagedtwonurseries,seri-ouslyaffectingtheircapacitytoproduceseedlings.Assumingthatglobalwarmingwillcontinueandcausemoreintenseandextremeweatherphenomena,suchdisastersmaystrikemorefrequentlyinthefuture.Thedamagecanbeminimised,however,byadaptingthewaycashewtreesaregrownandshaped.Treeswithamoreopenandlessdensecanopyandbranchingoutclosertothesoilsurface(half-trunk)aremoreresistanttodamagethanregular-sizeanddensecanopies.
(In the long run) a potential reduction of precipitation due to climate change. Fearsaboutclimatechangeincludethepossibilitythatannualrainfallfiguresmayfall.Thecom-binationofimpacts,bothpositive(lessmildew)andnegative(extendedperiodsofwaterstress),coulddamagetheproduc-tivityofcashewandleadtomorewildfiresharmingtrees.However,thiscouldbecompensatedbyadaptationsintheproductiontechnique.
Fall of the world market prices. Thedangerthatthemarketforcashewnutsmightbecomesaturatedsoonifproductionin
29 themainproducingcountries-especiallythoseinWestAfrica,VietnamandIndiacontinuestoexpandquickly-cannotbetakenlightly.However,thiscanonlybeassessedifathoroughstudyofglobaldemandandsupplyisconducted.Onemightassumethatinsuchasituationthelargerandmoredynamicorbetterorganisedproducerswouldpersistinthemarket,whereascountrieswithmanylowvolumeproducersandaninelasticagriculturalsectorwouldbecomenon-competitivesooner.However,sincealargepartofthecostsincashewpro-ductionarelabourcosts,countrieswhereproductionisbasedonsmallholdersmightweatherperiodsofreducedpricesmoreeasilythanthosewhereproductionisdependentuponwagelabour.
National policies that are not conducive to an enhanced business climate. ThechancethattheGovernmentofMo-zambiquemayreverseitseconomicpolicyofprivatesectorpromotion,marketliberalisationandadaptedfiscalpoliciesappearsslimintheeyesofthemission.Thestronglinkagetomajorbi-andmultilateraldonorsthatpromoteeconomicpoliciesthatsupporttheprivatesectormakesitveryprobablethatthepresentgovernmentalpolicies–andhenceprivatesectordevelopmentaswellasaconducivebusinessclimate–willbemaintained.
16
14
12
10
8
6
4
2
05 10 15 20 25 30 35 400
Prod
uctio
n pe
r tree
(kg
)
Age of tree (yrs)
32 3.0 Proposed Project Approach and Intervention Strategy
3.1 Proposed Areas of Intervention and Fields of Activities
3.1.1 Other projects in the cashew sector in Mozambique
Asmentionedabove,someprojectshavealreadybeenimple-mentedinthecashewsectorinMozambique.AnambitiousprojectwasimplementedbyAgence Francais de Developp-ment (AFD)from2001totheendof2006.Themainob-jectivesweretoincreaseproductionandstrengthenfarmers’groupsinthreesoutherndistrictsinNampula,namelyMoma,MogovolasandAngoche.Thetotalcostoftheprojectwas4.9millionEuros.Accordingtoinformationgathered,theprojectwasneitherverysuccessfulnorsustainable.Thereju-venationcomponentapparentlyregisteredfewsuccessesbe-causethesurvivalratesofseedlingswerefarbelowtheexpectedrate.Additionally,therewasnosustainableincreaseinthepro-ductionofthethreedistricts.
TheEuropean UnionalsofinancedaprojectthroughtheNGOAdventist Development and Relief Agency (ADRA).Theprojectlastedabout6yearsandaimedtosupportthecashewproduc-tioninprovincesinMozambique.Theprojectwasclosedtwoyearsago.Accordingtothedeskofficeritwasnotverysuccessfulandhadalimitedimpact.
USAID iscurrentlyfinancingtwoprojectsrelatedtothecashewsector:ThebiggestoneisAGRIFUTURO,whichpromotesthevaluechainofninecropsofwhichoneiscashew.ClosecooperationexistsbetweentheACiprojectandAGRIFUTUROandcomplementaryactivitiesinthecashewsectorwillbedeveloped.AGRIFUTUROisimplementednationwide.
USAIDalsofinancesafundwhich,throughcommercialbankcreditsofupto15months,supportsprocessingcompaniesinacquiringtherawmaterialtoproduceprocessednutsthrough-outtheyear.Creditsaregivenonceabusinessplanhasbeenpresentedandiftheclientshaveasafemarkettosellthepro-cessednuts.
3.1.2 Production-related aspects
Theanalysisledtotheidentificationofthreekeyinterventionareaswheresignificantimprovementsoftheproducer’ssitua-tioncanbeachieved:(a)Rejuvenationofthetreepopulation,(b)Improvementsinproductiontechniquetoenhancethetrees’productivityandproductqualityand(c)Improvementsinmarketingofcashewnuts.
3.1.2.1 Rejuvenation of the tree population
Asakeyfactorinfluencingtheproductionvolume,theageofmanytreesmustbeconsidered.Manytreeshaveclearlysur-passedtheageinwhichtheycanproduceattractivevolumesoffruit.Suchtreesfallintotheagerange(>30years)inwhichproductiondecreasestolevelsthatwarranttheirreplacement(see the following figure 3.1 onthedevelopmentoftheyieldovertimeinrelationtotraditionaltreevarieties).Treesof50yearsarenotuncommon.
Figure 3.1: Raw cashew nut production per tree (kg)
Duetotheiroldagethesetreesdonotpossesstheyieldpotentialofyoungertrees,eveniftheyaretreatedaccordingtotherec-ommendationsforbestpractices.Theiryieldwillnotonlybebelowthatofyoungertreesunderbestpracticeconditions,butitwillalsobebelowthatofyoungertreesthatonlyreceiveminimumcare(limpeza only,butnopruningorspraying).
Ashasbeencalculatedabove,assuminganimprovedsurvivalrateof75%ofseedlingsafterplanting,about410,000cashewtreesseedlingshavetobeplantedeveryyearinNampulaprovinceinordertomaintainthegivenagestructureofthetreepopulation.
Again:thecapacityofINCAJU’snurseriesinNampulaprov-inceisabout700,000seedlingsannually,resultinginonly115,000newlyplantedtreesbeingsuccessfullyestablished(surviving)inthefield.
So,inordertoreplaceanassumed3milliontreesthataretoooldtobecomeproductiveinthenext10years,300,000treeshavetobeinstalledeveryyearinadditiontothenumberneededtomaintaintheagestructure.Presumingasurvivalrateof75%to80%,another400,000seedlingshavetobeplantedinNamp-ulaprovince,elevatingthetotalnumberofrequiredtreesestab-lishedinthefieldto800,000annuallyduringthenext10years.
Table 3.1: Calendar of activities in cashew production
Plant’s stage / Human activity
Month
Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.
Flowering
Nut ripening
Weeding
Spraying
Harvesting
Transplanting seedlings
33 Asaconsequenceofthissituation,keyfutureactivitiesare:anincreasedproductionoftreeseedlingstoreplaceoldtreesinNampulaprovinceandfewerlossesfromtheseedlingpro-ductionstageonwards.
Need to transfer existing nurseries to the private sector and support the establishment of additional private nurseries.Thissituationistypicalofthemanagementofnurseriesbystateorganisations.Manyprojectshaveinthepasttriedtoimprovesuchsituationswithouttouchingthequestionofwhoisresponsiblefornurserymanagementandhavefailedtoachievelong-termimprovements.Thisisduetothelackofcompetitioninpubliclyrunsystemswhichpreventsefficientlyoperatingnurseriesfromsurviving.Itisthereforeimperativetodevelopastrategytotransfertheexistingnurseriesfromthepublictotheprivatesectorduringanadequateperiodoftime–say3to5years.
Themissionthereforestronglyrecommendsdeterminingastrategytoachievethischangeofresponsibilityforseedlingproduction.Thestateshouldinfuturerefrainfromproducingseedlingsitselfandconcentrateonregulatingandsupervisingthesector,i.e.bysettingrulesandstandardsandcertifyingseedlingproducersandseedlingproduction.
Clearly,privatenurseriescannotdistributeseedlingsfreeofcharge.Thefirststepisthereforetheabolitionofthedistribu-tionofseedlingsfreeofchargetoproducers,evenbyINCAJU.Ontheonehandthiswillmakecashewgrowersvaluethetreesasaninvestmentthatneedstobetakencareof.Ontheotherhandthepossiblecomparisonbetweenvariousseedlingproduc-erswillhelpensurethatthemoreefficientseedlingproducerssurviveandensureconstantimprovementsovertime.Ifnec-essary,theseedlingproducersmustreceiveasubsidyduringthetransitionperiod.
Lookingatthepolicytobefollowedatthefieldlevel,theprojectwillnotsupportthereplacementofindividualtrees,butoughttorecommendtheestablishmentoftreestandsthat
followproventechniques.Hence,farmersshouldbeadvisedtoplanttheirseedlingsattherecommendedspacingof12 mby12 m,andshouldplantatleasthalfahectare(about35trees)minimum.
Thiswillhelpfarmersviewtheircashewtreesasacropthatisworthbeingactivelymanagedandtakesthemawayfromcollecting/harvestingfruitsfromtreesthatstandscatteredontheirpropertyandwhicharenottakencareofproperly.Also,sincetheprojectdoesnotneedtosupportlargecom-mercialproducers,anupperlimitof10 haor20 hashouldalsobeobserved.Henceitisrecommendedthattheprojectlimititssupporttoestablishingtreestandsofbetween0.5and10or20hectares.
Recommended types of seedlings Modernvarietiesandformsoftreescombinetomakecashewproductionmoreefficientandeconomic.Akeyelementisthewaytreesareshaped.
Asinothertreecultures,treatmentsandharvestingarefacili-tatedifthetreesarenotpermittedtogrowastallasisthecasenow.INCAJUhasproventhattreesofvarietiesthatbranchoutlowabovethesoilandthatareshapedaccordinglycreatetheseadvantagesfortheproducer.Ithasalsobeenob-servedthatsuchtreesaremuchlesspronetodamagebystorms.Inthiswaytheriskofloosingalargepartofthetreesduringcyclonescanbeminimised.
3.1.2.2 Improved crop and pest management
Arangeofmeasuresisneededtoenhancetheproductionofindividualtrees,independentoftheirage.Themixofrecom-mendedpracticesisknownasintegrated crop and pest man-agement (ICPM).
34 ICPMnormallyincludespreventivemeasures(pruning,cuttingunwantedshoots,weeding,biologicalcontrolofharmfulor-ganismsand,ifneeded,theuseofchemicalstocontrolthem).Thepreventivemeasureswouldbecomplementedbyemergencymeasurestocontrolharmfulorganismsincaseofoutbreaksofactualdiseasesorwhenmajorattacksareobserved.Thesecouldbeapplications(spraying)ofchemicalsbutwouldbestrictlyappliedandconsidereconomicthresholdlevels.
InMozambiqueICPMhas,untilnow,beencomposedofonlypreventivemeasuresandincludescalendarsprayingsofpartofthecropwithsubsidiespassedonthroughINCAJU.Thetable 3.1 (on the last page) showstheactivitiesincashewproduc-tionandthetimesoftheyearwhentheyareexecuted.
Spraying regimeINCAJUissupportingfarmerswhoownatleast100cashewtreestobecomecontractorsforspraying(port:provedor)otherproducers’trees.
Inthesystem,eligiblefarmersreceivetwodaysoftraining,asubsidyforbuyingamistsprayerandarethenlicensedtotreatthetreesofothercashewproducersaccordingtotherec-ommendationsofINCAJU. INCAJUfurnishesthecontractorswiththechemicalsfreeofcharge.ThefarmerswhosetreesaresprayedpaythecontractoranamountrecommendedbyINCAJU(between15and20 MTs/treeforseveralapplicationsintheseason2009/2010).Sincesmallfarmershavelittlemoney,someprovedorestakeinkindpaymentfromsmallholdersof2kgto3kgofcashewnutspertree.Withthegivenpriceof10MTsto13MTs/kgtheprovedormakesgoodprofit.ForNampulaprovince,INCAJUrecommendsthreecalendarsprayingsattwothree-weeklyintervals,butmoreifnecessary.
Theweaknessesofthissystemcanbeseeninthefollowing:ÿ Thecalendarsprayingtechniqueleadstoexcessiveuse
ofpesticidesÿ Therearenotenoughcontractors,especiallyinremote
areas,andonlybetween20%and25%ofthecashewtreesoverallarebeingsprayed
ÿ Thecontractorshaveatendencytogiveprioritytotreatingtheirowntreesandownersoflargernumbersofcashewtrees
ÿ Somesmallholdersclaimthatthecontactorsdonotspraythetreesasthoroughlyasneeded
ÿ Theheavysubsidiesofthissystemmaynotbesustainableinthelongrun
ÿ Withapriceforraw cashew nutsaround10 MT/kg,thesprayingiseconomicallyfeasibleiftheyieldpertreeisincreasedbyatleast2to3 kg/tree.Ifthetreeisoverageitisquestionablewhetherthefarmergetsanincrementalbenefitfromthespaying;iftheyieldpotentialdoesnotallowanincreaseofatleast4to5kg/tree,thismeasureisnotprofitableforthefarmer.
3.1.2.3 Improvements in marketing
Frequently,improvementsintheareaofmarketingareneededtocomplementincreasesinproduction.Thisisalsothecaseinthecashewsector.Improvementsinthisareahavethepo-tentialtocontributesignificantlytoincreasingtherevenuesoftheproducers.
TheimprovementsrequireontheonehandthattheGov-ernmentofMozambiquesetsfavourableconditions,e.g.theviabilityoftheexistingtaxonexportsofRCNandtheexportbanuntiltheendofDecembershouldbereviewedinthelongrun.Suchataxcanbejustifiedtoprotectdomesticprocessingfacilitiesduringaninitialphaseofestablishment.Butinthelongrun,Mozambicanprocessorsshouldbecomecompetitiveontheworldmarketandbeabletosurvivewithoutaprotec-tionistexporttaxonRCN.
Favourableconditionsforcashewmarketingcanalsobein-creasedbyprovidingbettermarketinformation.Forthefarmersinparticular,suchaninformationsystemisofvitalinterest.Farmersoftenselltotheclosestbuyersandtraderswithoutknowingaboutregionalcashewprices.Theirconditions(e.g.nostorageand/ortransportfacilities,hungerandthereforeurgentneedforcash)veryoftenpreventthemfromsellingelsewhere,butbetterinformationaboutpriceswouldinsomecasesprobablyleadtohigherrevenuesforfarmers.
Meanwhile,producerscangainbyorganisingthemselvesinassociationsorothersuitableformsinordertoofferlargeranduniformlotsforsalethataremoreattractiveforbuyers.Someofthemeasuresmentionedfalloutsidetherangeofmeasuresthatfarmerscancontrol.Jointactionofthestakeholdersshouldbepromotedinordertohelpimplementtherequiredchangesinthisarea.CLUSA,forexample,issupportingthecreationoffarmers’organisationsintheprovinceofNampula,andtheireffortstopromotejointmarketingshouldencompasscashewnuts.
Sellingasanassociationorcooperativehasseveraladvantages.Largeranduniformlotsaremoreattractiveforbuyers.Theindividualfindsthemselfinabetterpositionfornegotiatingahigherpricewhensellingtogetherwithothers.Ifwell-man-aged,anassociationcanequipitselfwithasmallstoragefacilitywherethememberscanguardtheirproduceuntiltheendoftheseasonwhenpricesusuallyraise.Organisedfarmerscanalsomoreeasilyselldirectlytothecashewfactories,avoidingthenumberofmiddlementhatareoftensituatedalongthevaluechain.
Theproducersneedtobemadeawareofthepotentialaddedincomethatcanbecreatedbycooperativeformsofmarket-ing.Jointactionofthestakeholdersshouldbepromotedinordertohelpimplementthechangesinthisarea.Forexam-ple,somedonorsandNGOssuchas CLUSA, ADPP andSNV
35 aresupportingthecreationoffarmers’organisationsintheprovinceofNampula.Sucheffortscanincludethejointmar-ketingofvariousagriculturalproducts,cashewnutsbeingonlyoneofthem.
TheACiwillconcentrateonexactlythisformoffunctioningfarmers’groups.Besidesprovidingagriculturalextensionad-vicetoFarmerFieldSchools,theprojectwillsupportthepar-ticipatingfarmersinorganisingthemselvesforjointmarket-ing.Thiscanbeintheformofanassociationorcooperative,butdoesnotnecessarilyhavetobeformalised.Theimportantfactorhereistoprovidefarmerswiththeknowledgeandca-pacitiesonhowtoselltheirproducetogether,e.g.explainingthepotentialbenefits,teachingbusinessskillsandpossiblyprovidingmeasurestoconstructastockroomorfacilitiesforsortingnutsaccordingtoquality.
3.1.3 Economic aspects and expected impacts of the project
Manymembersofthesmallholdercommunityareilliterate.Therefore,mostareunabletorealisticallyestimatetheeco-nomicsofcropproduction,andevenmoresointhecaseofapermanentcroplikecashew.
Still,evenundersuchcircumstancesandevenacceptingthattheprofitabilityofacropmustnotbetheonlycriterionfordecisionmaking,producersmustknowtheeconomicsofcash-ewproductionandmustbemadeawareoftheimplicationsofmaintainingaloss-makingbusinessoverseveralperiodswith-outtakingstepstomakeitmoreeconomicallyadvantageousorswitchingtoothercropsthatrenderahigherincome.
Cashewproducersmustbeabletocalculateoratleasttoesti-matewithanacceptabledegreeofcorrectnessthecosteffective-nessofchangesintheproductionsystem(i.e.thatofdifferentintensitiesofproduction,forexamplecomparingthelessormoreintensivemaintenanceoftrees).
Also,andmoreimportantly,cashewtreesreachtheirfullpro-ductivityonlyinornearthetenthyear.Aspectsofinvestmentanalysisandliquiditymustthereforebeconsideredwhencashewplantationsaretobeestablishedaneworwhenexistingplan-tationsaretoberejuvenated.
Similarly,aproducermustbeabletocomparetheviabilityofaninvestmentincashewproductionwithotheralternatives,includingannualcrops,andhemustbemadeawareofhowtorateaspectsofriskandthevaryingdegreesofsusceptibilityofalternativestotheriskposedbyclimaticvariationslikedroughts.Itisthereforeimperativetobuildtheawarenessofcashewproducersoftheeconomicsofcashewproductionandtoenablethemtoweightheeconomicsofdifferentoptions.
3.1.3.1 Impact at the farm level
Asreported,manysmallholdersdonotcareforcashewtrees,butjustcollectthenuts.Theydonothavecostsrelatedtocashews.Assumingayieldof3kg/treeandapriceof10MTs/kgtherevenuefromthenutsisabout30MTs/tree,equivalenttoabout2,100MTsperha.Inadditiontothis,farmersproducealcohol (aguadente)outofthedriedappleswhichhasamarketpriceofabout20MTs/l.Theaguadenteisoftenusedtopaycasuallabourersemployedforharvesting.Itwasre-portedinNampulaprovincethatonaveragefarmersget0.125lofalcoholperkilogrammeofnutsharvested.
Figure 3.2: Cashew yield/revenue
3 kg/ tree
x 10 MTs/kg
= 30 MTs/kg
x 70 tree/ha
= 2100 MTs/kg
Othersproducejuiceoutoftheapplesandconsumeitorsellitonthemarketifthefarmissituatednearatownorabiggerroad.
Itseemstobethatfarmersinotherregionstakemorecaretoproducealcohol,probablybecauseofbettermarketopportu-nitiessuchasintheprovinceofGaza,whichisnearertothebigmarketofMaputoandwithalotoftourists(andpotentialclients)arrivinginGaza.Somefarmersreportedthattheirrevenuefromaguadentewasashighastherevenueofsoldnuts,whichsignificantlyboostsincome.Thedifferencesintheproductionofalcoholmaybebecauseofreligiousreasonsaswell,sincetherearemoreMuslimsinNampulaprovincethaninthesouthofMozambique.
Thefollowingcashflowanalysis (see next page)wasmadeofanewcashewplantationtoassesstheprofitabilityofcashewnutsandtoanalysetheincrementalbenefitforsmallholderswhenbettercultivationpracticesarechosen.Thetotalcashflowcontains25years,butduetospaceconstraintsononepage,only17yearsarepresented.However,itisimportanttorememberthatuntilthe25thyearitisassumedthateachyearinvolvesthesameoutflowsandinflows
Smallholderscarryoutallormostoftheworkontheirfarmswithfamilylabour.IntheruralareasofNampulaprovince,findingworkisalmostimpossible,especiallyforunskilledlabourers.Therefore,opportunitycostsforlabourmustnotbeconsideredandtheinputoffamilylabourisnotacostitemforthesmallholder.
However,twoalternativeswereconsideredinthecashflowcalculations:oneexcludinglabourcosts,assumingthatasmallholderisestablishingandrunninganewcashewplan-
Cost during establishment Cost peak produktion period
20%
80%
50% 50%
MTs/ha
6.000
4.000
2.000
0
6.000 MTs/ha
2.850 MTs/ha
Without Labour cost With Labour cost
36 tationwithfamilylabouronly,andasecondassumingacom-mercialfarmerhastohireandpaycasuallabourforallthelabourneeds(see the cash flow analysis, Table 3.2).
Foracommercialfarmerthemaincostsintheestablishmentofacashewplantationcomefromlabourduringthefirsttwoyears.Thesehaveashareofover80%,whereastheseedlingsaccountfortheremaining20%.Bycontrast,thesmallholderhastobearonlythecostsoftheseedlings.Duringthepeakofproductionbetweenthe16thandthe25thyear,abouthalfofallcostsforacommercialfarmerarelabourcostswhiletheotherhalfaresprayingcosts.
Figure 3.3: Cost split
Labour Seeding Spraying
Thebalancecashflow(themarginobtainedwhentheannualcostsaresubtractedfromtheannualrevenues)amountstoabout6,000 MTs/ha(207USUS$/ha)withoutconsideringthelabourinputand2,850 MTs/ha(98US$/ha)includinglabourcosts.Duringtheseyearsthevalueofthelabourinputofabout55workingdaysperhectareisabout110 MTsperday(3.8 US$/day)(balancecashflowwithoutlabourcostsdividedbytherequireddaysoflabour)whereasacasuallabourercostsabout50 MTs/day.Inotherwords:whenworkinginacashewplantationthefamilylabourergainstheequivalentoftwicethesalaryofacasuallabourer,whichcanbeassumedtoindi-catetheopportunitycost.
Figure 3.4: Balance Cash flow
TheInternal Rate of Return (IRR)ofcashewturnsouttobeveryhighwhenlabourisnotaccountedfor(inthecaseofthe
familyfarmer)atabout68%over25years.Whenincludinglabourcostsitisreducedtoabout12%.However,theprofitandthereforetheIRRwillincreaseifthesmallcashewtreesareintercroppedwithfoodcropsduringthefirstthreeyears.Sesameisonesuchcropthathasahightolerancetoheatandwaterstressandrendersaproduct(grain)andby-product(straw)thathavevarioususes.Inadditiontothis,thereisahighdemandforsesameinthecountry,thepriceisattractiveandtheGrossMarginispromising
InthiscasethereisapositivebalancecashflowfromthefirstyearonwardswhennotconsideringthelabourcostsandconsequentlyanIRRcannotbecalculated(itwouldbeindefinite).However,whenconsideringalllabourcoststheIRRisabout62%.
Afterthe10thyear,whencashewtreesareinfullproduction,thebalancecashflow(comparablewiththeGrossMarginofanex-istingplantationoranannualcrop)isabout6,000 MTs/ha/year(200 US$)withoutthecostsoflabourandabout2,850 MTs/ha/year(100US$)ifthelabourcostsarefullyconsidered.
3.1.3.2 Expected impact on poverty reduction
Assuminganestimatedyieldof3 kgpertreeand70 trees/ha,asmallholderwhojustcollectsthecashewnutswillatpresentharvest210 kgnutsperha.Atanaveragepriceof10 MTs/kgthegrossmarginwouldbe2,100 MTs/ha(about70US$).
Comparedtothe6,000 MTs/hawiththenewplantationand/ortheimprovedcultivationtechniques,theincomeismorethandoubledinthisway.WiththeapplicationofICPMtoexistingcashewtrees,anincreaseof5 kg/tree(from3 kg/treeto8 kg/tree)canbeassumed.Evenifweconsiderthatthefarmerhastopayonaverageatleast2 kg/treeforspraying,theincrementalbenefit(notconsideringtheincrementalneedoflabour)isabout3 kgofnutspertree,resultinginthedou-blingthefarmer’sincomefromcashewfrom70 US$perhaandyear.Theincreaseinincomevariesfromfarmtofarmac-cordingtothenumberoftreesorthearea.
Onaveragefarmersownabout20to30trees.Thismeansthatjustbyhavingthetreessprayedthepotentialofanincreaseofincomewiththeexistingcashewtreesisabout30 US$/yearfortheaveragesmallholder.Inadditiontothisithastobestatedthatthisincrementalyieldcanonlybeachievedifthetreesarenotoverage–whichinmanycasesisafact–andthetreesre-spondtotheimprovedcultivationtechniques.
Thiscalculationshowsclearlythatwiththeexistingcashewtreestheimpactonpovertyreductiononthemajorityofsmall-holdersisverylimited.Ifoneassumesanimpactof30 US$/yearandafamilyofsixpeople,thenthecontributiontothedailyincomeperpersonisjust0.014 US$/dayperfamilymember.
Cash
flow
ana
lysi
s of
a C
ashe
w tr
ee p
lant
atti
on (2
5 ye
ars)
Year
Uni
tNr.
of
Uni
tspr
ice/
unit
12
34
56
78
910
1112
1314
1516
17…
Infl
ows
Prod
uction
of Ca
shew
/tre
eKg
/tre
e10
1,0
35
77,5
88,
68,
89
9,2
9,4
9,6
9,8
1010
10
Rev
enue
of Ca
shew
/tre
eM
Ts/t
ree
10,0
30,0
50,0
70,0
75,0
80,0
86,0
88,0
90,0
92,0
94,0
96,0
98,0
100,
010
0,0
100,
0
Prod
uction
of Ca
shew
/ha
kg/h
a70
,021
0,0
350,
049
0,0
525,
056
0,0
602,
061
6,0
630,
064
4,0
658,
067
2,0
686,
070
0,0
700,
070
0,0
Rev
enue
of Ca
shew
/ha
MTs
/ha
1070
021
0035
0049
0052
5056
0060
2061
6063
0064
4065
8067
2068
6070
0070
0070
00
Rev
enue
of ag
uade
nte/
ha (0,12
5 l/
kg d
e ca
stan
ja)
l/ha
2017
552
587
512
2513
1314
0015
0515
4015
7516
1016
4516
8017
1517
5017
5017
50
Tota
l gr
oss
reve
nue
(MTs
/tre
e)M
Ts/h
a13
3863
8894
100
108
110
113
115
118
120
123
125
125
125
Tota
l gro
ss r
even
ue (M
Ts/h
a)M
Ts/h
a87
526
2543
7561
2565
6370
0075
2577
0078
7580
5082
2584
0085
7587
5087
5087
50
Tota
l gro
ss r
even
ue ($
/ha)
$/ha
3091
151
211
226
241
259
266
272
278
284
290
296
302
302
302
Outfl
ows
Labo
ur c
osts
Clea
ring
of th
e la
ndM
anda
y/ha
150
507.50
0
Lini
ng, d
iggi
ng the
hol
esM
anda
y/ha
450
200
Tran
spor
t of
the
see
dlin
gs to
the
field
(3
km)
Man
day/
ha5
5025
0
Plan
ting
Man
day/
ha2
5010
0
Irriga
tion
of th
e se
edling
sM
anda
y/ha
250
100
Rep
lant
ing
mis
sing
pla
nts
(20%
)M
anda
y/ha
250
100
Wee
ding
(lim
peza
) (1
hour
s/tr
ee, 2
tim
es)
Man
day/
ha12
5024
050
472
096
012
0012
0012
0012
0012
0012
0012
0012
0012
0012
0012
0012
00
Prun
ing
(1 h
our/
tree
)M
anda
y/ha
1250
6012
024
036
048
060
060
060
060
060
060
060
060
060
060
060
060
0
Har
vest
ing
(1,5
MTs
/kg)
MTs
/kg
1,50
105
315
525
735
788
840
903
924
945
966
987
1.00
81.02
91.05
01.05
01.05
0
Dry
ing
of the
Cas
hew
nuts
days
150
1020
3040
5050
5050
5050
5050
5050
5050
Dry
ing
of the
Cah
ew a
pple
sda
ys1
5010
2030
4050
5050
5050
5050
5050
5050
50
Prod
uction
of ag
uade
nte
(1 litro
por
8 k
g ca
stan
has)
days
550
250
250
250
250
250
250
250
250
250
250
250
250
250
250
250
250
Labo
ur c
osts
tot
al8.
150
160
735
1.34
91.
915
2.50
52.
938
2.99
03.
053
3.07
43.
095
3.11
63.
137
3.15
83.
179
3.20
03.
200
3.20
0
Inpu
ts
Seed
ling
s (r
equi
red
Qty
+ 2
0%) (C
osts
incl
. Tra
nspo
rt)
seed
ling
7020
1.40
028
0
Cost
s of
spr
ayin
g/ha
(ex
cl. c
hem
ical
s)M
Ts/t
ree
7020
280
560
840
1.12
01.40
01.40
01.40
01.40
01.40
01.40
01.40
01.40
01.40
01.40
01.40
01.40
0
Voltra
id (10
ml/
arvo
re 3
tim
es)
l0,
0350
021
042
063
084
010
5010
5010
5010
5010
5010
5010
5010
5010
5010
5010
5010
50
kara
te (5
ml/
tree
2tim
es)
l0,
0135
049
9814
719
624
524
524
524
524
524
524
524
524
524
524
524
5
Tota
l Out
flow
s ex
cl. L
abou
r (M
Ts)
1.40
028
053
91.
078
1.61
72.
156
2.69
52.
695
2.69
52.
695
2.69
52.
695
2.69
52.
695
2.69
52.
695
2.69
52.
695
Bala
nce
Cash
flow
(Gro
ss M
argi
n 1)
(M
Ts/h
a)-1
.400
-280
336
1.54
72.
758
3.96
93.
868
4.30
54.
830
5.00
55.
180
5.35
55.
530
5.70
55.
880
6.05
56.
055
6.05
5
Bala
nce
Cash
flow
(Gro
ss M
argi
n 1)
(U
S$)
-48
-10
1253
9513
713
314
816
717
317
918
519
119
720
320
920
920
9
IRR
68%
Tota
l Out
flow
s in
cl. L
abou
r co
sts
(MTs
)9.
550
440
1.27
42.
427
3.53
24.
661
5.63
35.
685
5.74
85.
769
5.79
05.
811
5.83
25.
853
5.87
45.
895
5.89
55.
895
Bala
nce
of c
ash
flow
(Gro
ss M
argi
n 2)
(M
Ts)
-9.5
50-4
40-3
9919
884
31.
464
930
1.31
51.
777
1.93
12.
085
2.23
92.
393
2.54
72.
701
2.85
52.
855
2.85
5
Bala
nce
of c
ash
flow
(Gro
ss M
argi
n 2)
(U
S$)
-329
-15
-14
729
5032
4561
6772
7783
8893
9898
98
IRR
12%
37
Tabl
e 3.
2: Ca
sh fl
ow a
naly
sis of
a C
ashe
w tr
ee p
lant
attion
38 Asignificantcontributioncanonlybeachievedinthelongrunbyestablishingnewplantationsofatleasttwotothreehectarespersmallholder.Asshownabove,1 hainfullpro-duction,whennotaccountingforlabourcosts(assumingthatthenecessarylabourinputisprovidedentirelybyfamilyla-bour),resultsinaGrossMarginofabout200 US$/ha/year.Thisisabout0.09 US$/familymemberperyear.Ifafarmergrows3 ha,thepovertyreductioneffectperfamilymemberwillbeabout0.30 US$/dayinthelongrun.
3.1.3.3 Impact on the volume of production
Inordertohaveanoticeableimpact,theprojectisexpectedtoreachabout10%ofthecashewproducersintheprovince,about30,000growersduringitsimplementationperiodof3years.
Asdiscussedabove,anincreaseintheaverageproductivityinNampulaprovincefromthecurrent3 kg/treeto8-10 kg/treewithpropermanagementappearsrealistic.Withthisincreaseof5kg/treetheproductionofatypicalgrowerwith30treeswouldincreasebyabout150kgperyear,whichmorethandoublestheactualproduction.
Theincreaseoftotalproductioninthepilotdistrictswillde-pendonthedegreetowhichtherecommendedtechnicalpackageisused(intermsofpercentageoffull,partialandnon-adopters).Assuming100%adoptionbythetargeted30,000treeowners,thetotalproductiondifferentialcouldreachabout4,500tonsayear–whichcorrespondstoatleast10%oftheprovince’sand5%ofthenation’spresentproduc-tionvolume.
Ontheonehandnotallparticipatingfarmersinthe Farmer Field Schools (FFS)willapplytherecommendedICPMculti-vationtechniquesentirelyand/or100%correctly.Thishasanimpactontheaverageyieldincrease.OntheotherhandthefuturemembersoftheFFSwillownanumberoftreesabovetheaverage,sinceexperienceshowsthatfarmerswithmoretreesorbiggerplantationsaremoreinterestedinnewtechnol-ogiesandinnovations.
Atthenationallevel,theproject’seffectwouldresultinin-creasedreceiptsfortheGovernmentofMozambiquethroughthetaxonexports.Thesemustbebalancedwiththeincreasedvolumeofsubsidiesfortheacquisitionofpesticidesandmistsprayersand,inthemediumandlong-term,theneedtomul-tiplytheproductionoftreeseedlingswhicharenowdistribut-edfreeofchargetothegrowers.
Thedescribedeffectsandtheideathatthegovernmentmight,inthelong-term,bettersupportthebuild-upofprivatesectorcapacityforseedlingproductionandserviceprovision,suggestthatafteratransitionperiodsubsidiseddirectgovernmentin-terventioninproduction,andhencethecostsassociatedwithsuchsubsidies,maybereduced.
3.1.3.4 Impact on the quality of production
Aswehavelearnt,thequalityofcashewnutsdeliveredbythefarmersisbelowinternationallevels.Variousmeasuresarepos-sibletoimprovethisquality.Butfirstithastobestatedthataslongastheprocessorsandexportersarenotwillingtopaypricesaccordingtoqualitythereisnoincentiveforthefarmertoproducehighqualitynuts.Thishasbeenthecasesofar.
OrganisedfarmerscouldeasilyperformaninitialselectionofRCNaccordingtoqualityaspects.Atthemoment,RCNarenotusuallypricedaccordingtotheirquality.Buyerspaythesamepriceperkgwithoutconsideringbetterqualityproducts.Someprocessingfactorieshavestatedthattheywouldpayaccordingtoqualitycriteriaifsuchasystemwereintroducedeffectively.Whileasinglefarmerwithoutstoragefacilitiescouldhardlymanagetosortouthisnuts,thiscouldbepossibleinanassociation.Thisimplies,however,thatthereissufficientproductioningeneralsothatthenutsoflesserqualityareactuallyinlessdemand.Sofar,everyrawcashewnut,regardlessitsquality,willfindabuyerontheMozambicanmarket.
Sofaronlyonefactorypurchasesaccordingtoquality,paying2MTs(20%)morethanforaveragequalitynuts.Duetohighdemand,farmersareabletoselltheirlowqualitynutsfortheaveragemarketprice.Buttheprocessorismixingthehighquality(bigger)nutswiththeotherrawmaterialbecausehewouldotherwisetreatthelabourersunequally,whichmightleadtobadrelationssincethosewhichprocessthehighquali-tynutwouldbenefitmorebecausetheyallarepaidbythekilogrammeofprocessednuts.
Themostimportantmeasurestoincreasethequalityofnutsaregoodcultivationsuchaspruning,pestmanagementandweedingandsubstitutingoveragetreeswithnewplantationsofcashewtrees.ToachievethisobjectivebestpracticesincashewgrowingwillbetransferredtothefarmersthroughextensiontechniciansandthefacilitatorsoftheFFSandamajoreffortwillbemadetorejuvenatethecashewtreepo-pulationinthefourpilotdistricts.
Thisneedsasoundstrategyforproducingnurseriesandcon-vincingpoliticians,otherdonorsandNGOsnottosubsidisetheproductionofseedlingsinordertogivetheprivatesectorthechancetoenterthismarket.
39 3.2 Implementation Strategy
3.2.1 Methodological approach
Giventhelowlevelsofliteracyamongsmallholders,thedif-ficultiesofusingmodernmeansofcommunicationandtheneedtocommunicatetoalargenumberofthoseinvolved,espe-ciallywomen,inlocallanguagesratherthaninPortuguese,
arereasonsthatfavouratieredsystemfortheintendedknowl-edgetransfer.Thiswaythenumberofpeopletargetedbyprojectpersonnelismultipliedandthefollow-upofchangesintroducedattheproducerlevelisdonebythoseclosetotheproducersorbytheproducersthemselves.InotherAfricancountriesinwhichthesituationofsmallholdersresemblesthatofthoseinMozambiquetheapproachcalledFarmer Field Schools (FFS) hasprovedmosteffective.Themaincharacteris-ticsoftheFFS-approachare explained in the box below.
Strengths of the FFS approach
Adult education: FFSs ensure the integration of the adult farmers’ existing knowledge/experience into the programme.
Convincing facilitators: The group facilitators are more convincing because they grow the crops themselves. Usually they are colleagues from the same or a neighbouring village. They are usually elected by the group, receive training and their judgement is therefore respected.
Based on crop phenology and time: The assistance of the growers is based on the crop phenology and continues throughout the year ensuring that farmers can immediately use and practice what is being learned and are not over-burdened by theoretical knowledge that cannot be applied right away.
Group study: Groups members can support each other, both with their individual experience and strengths.
Field School Site: Field Schools are always held in the community where farmers live so that they can easily attend. The FFS will choose a stand of trees in which the recommended techniques are demonstrated and applied by the group members and where they themselves practice the operations which they then repeat with their own trees.
Building groups: One of the jobs of the facilitator is to assist the FFS to develop the group spirit so that participants support one another after the FFS is over. This is done by having elected officers (head, treasurer, and secretary), and thus having a group identity. Such groups may even choose to extend their activity into the area of marketing by creat-ing a marketing association.
Basic science: FFS focus on basic processes through field observations, season-long research studies, and hands-on activities. It has been found that when farmers have learned about basics, combined with their own experiences and needs, they make effective decisions.
Trial fields: The FFS determines a stand of trees in a field for group study where farmers practice the recommended techniques and can carry out studies without personal risk. Here the groups can treat one group of trees in the tradi-tional way and another in the recommended way. The advantages of the recommended techniques are thus demonstrat-ed convincingly.
Evaluation and Certification: The results obtained with the traditional and improved techniques in the trial field are evaluated economically at the end of the production period. FFSs may include field-based pre- and post-tests for the participants. Then certificates can be awarded, which have a motivating effect, especially on those without school cer-tificates.
Follow-up All FFSs normally benefit from a longer follow-up period, in which the facilitators support the groups even after the direct involvement of the project has ceased. Regarding cashew trees, follow-up during a 3 to 5 year period is recommended when the planting (new or as a substitution of old trees) is demonstrated.
Community action: Once they have introduced communities to group action, FFSs may foster further community action, thus leading to other socio-economic benefits for the rural population.
Adapted from: Gallagher, K.D.: Farmers Field Schools (FFS) – A Group Extension Process Based on Adult Non-Formal Education Methods. Global IPM Facility 1999 See: http://www.farmerfieldschool.net/document_en/FFS_GUIDe.doc
Training of Facilitators(technically sound facilitator training)
Farmer Field Schools ÿ basic field course ÿ group organisation ÿ research methods
Community Action ÿ joint marketing
of nuts ÿ clubs, etc. ÿ joint procurement
of inputs ÿ farmer forums
40 TheFFSsystemhasanaddedadvantageoverthefrequentlyusedTraining and Visit Systemsinceitmakesthefieldactivitiesmoreindependentoftheofficialextensionservicesandtheiroftenprecariousfinancial.IntheFFSsystemextensionofficerssupervise/backstopfacilitators(upto5or6perextensionist)whoaremembersofthefarmingcommunitythathavebeentrainedforthepurpose.Thefacilitatorsguide/accompanythegroupsoffarmersformedatthevillagelevelthroughouttheseason.Afacilitatormayworkwithuptothreegroupsof20to30farmersandisusuallysomeonewithhands-onexperienceofthecropthatisatthecentreoftheprogramme.
Thedescribedstructureisalsoproposedforthisproject(see figure 3.7 on the next page).Thegenericactivityflowisvisual-isedintheschematicbelow.
Figure 3.5: Activity flow in extension programmes using Farmer Field Schools
3.2.2 Area and organisational structure of implementation
3.2.2.1 Districts proposed for implementation
Itisnotrecommendedtoimplementthestrategyinthewholeprovincebutratherinfourpilotdistricts.Toimplementtheproposedstrategyseemspossibleinrespecttotheavailablere-sourcesgiveninthecalculationbelow.
ImplementationistocoverfourdistrictsinNampulaprov-ince.Theproposeddistricts(see the figure 3.6) wereselectedusingthefollowingcriteria:
ÿ Districtisoneofthemaincashewproducingdistrictsoftheprovince
ÿ AlldistrictsarecloselyspacedtofacilitatelogisticsandbackstoppingbytheprojectstafflocatedatNampula
ÿ Highpopulationdensity(atleast25%oftheprovince’stotalinthefourdistricts)
ÿ Totalpopulationinthefourdistrictsshouldbeapproxi-matelyonemillion(170,000familieswith80%or135,000beingfarmingfamilies)
ÿ Processingindustriesexistinthedistricts(atleast5facto-riesinthefourdistricts)
ÿ Farmersorganisationsexistÿ INCAJUandMINAGRItechnicalstaffare
sufficientinnumberfortheproject‘sneeds
BasedonthesecriteriathedistrictsofMogovolas,Moma,AngocheandMogincualareproposedfortheimplementation.Theyaregroupedtogetherinthesouth-eastoftheprovince.
Figure 3.6: Districts in Nampula province proposed for the implementation of the Project
3.2.2.2 Organisational structure
Theprojecthastoavoidbuildingparallelextensionstructures.Thiswouldcreatehighcostsinthelong-runwhichcannotbemanagedinasustainableway.However,someINCAJUandMINAGstaffinthedistrictsarecurrentlyunderutilisedduetolimitedfinancialresourcesfortransport,communication,etc.,weakmanagement,bureaucraticprocedures,etc.
Therefore,theteamrecommendscooperatingcloselywiththesegovernmentalorganisations,especiallywithINCAJU.Theyaretheonlyorganisationwithspecialisedknowledgeofthecashewsectorandwithsufficientextensionagentsatthedis-trictlevel.Inadditiontothis,andaccordingtotheinforma-tionfromtheDirector,INCAJUisveryinterestedincoop-eratingwiththisproject.
Theorganisationoftheprojectwillfollowthestructuresuc-cessfullyusedinothercountrieswithintheprojectAfrican Cashew Initiative (ACi) – Analysis of the Cashew Value Chain in Mozambique withit’sheadquarterinAccra,Ghana (see figure 3.7 on the following page).
ThestrategyshouldbedefinedandapprovedbyaSteeringCommittee,whichconsistsofrepresentativesofimportantstakeholdersinthecashewsectorinMozambiqueandespe-ciallyintheprovinceofNampulasuchasINCAJUonthenationalandprovinciallevel;NGOsactiveinthecashewsectorinNampula;representativesoffarmerorganisations,processingindustry,traders,exporters,ACi,etc.TheSteeringCommitteeshouldmeettwotothreetimesayearandoneofitstasksshouldbetolobbyonbehalfofthecashewsectorandcoordinateandharmonisethestrategiesandactivitiesbe-tweenthedifferentactorsinthissector.
Regional Office Accra, Ghana
Coordinators in 5 other countries Nat`l, Coordinator Mazambique
Coordinator Moma Coordinator Mogincual Coordinator Angoche Coordinator Mogovolas 4
1–2 Extensionists per Aministrative Post 1–2 Extensionists per Aministrative Post 1–2 Extensionists per Aministrative Post xx
x Facilitators x Facilitators x Facilitators xx
FFS FFS FFS FFS FFS FFS FFS FFS FFS xxx
41
3.2.2.3 Project personnel
Capacity neededTomeetthetargetof30,000farmersduringa3yearperiod,thenumberofFFSshoulddevelopfrom120inthefirstyearto540inthesecondandthirdyear.Thenumberofsmallhold-ersreachedandofextensionistsneededtotrainandsuper-visethefacilitatorsinyear1(ratio1:5)andinyears2and3(ratio1:6)areindicatedinthetable 3.3 below.
Table 3.3: Number of farmers reached, of FFS, of facilitators, of extension technicians and District Coordinators needed
Type 2010 2011 2012
Farmers 3000 13500 13500
FFS 120 540 540
Facilitators 40 120 120
Extensionists 8 36 36
District Coordinators 4 4 4
National coordinator, deputy coordi-nator (agricultural economist) and ‘expert of farmers organisations’
3 3 3
Inthecaseoftheproposedprojectthefacilitatorsthataccom-panythefarmers’groupsaretobechosenamongthecashewproducersinaparticipatorywayatthevillageorcommunitylevel.Likelycandidatesmaybeproducersthathavebeencho-sentoprovidesprayingservices(provedores).
Proposed project personnel TheprojectwouldemployaNational Coordinator,whowouldworkoutofanofficeinNampulaandbesupportedbyaDeputy Coordinator(agriculturaleconomist)andaspecial-ist for supporting farmers organisations andanOffice Manager (administratorwithdutiesassecretaryandaccount-ant).Adriverandguardswouldcompletetheteam.TheNampulaofficewouldworkwith4 District Coordinators,oneineachdistrict,eachofwhichwouldconnecttobetween5and10extensiontechnicians.
Eachoftheextensionists (8inyear1and36eachinyears2and3)wouldinturnaccompany5to6facilitators.
Eachofthefacilitators(40in2010and120eachinyears2and3)wouldworkwiththreeFarmerFieldSchools.
Inthisway120FFScouldbeaccompaniedinyear1and540eachinyears2and3.
Thissystemwouldreach3,000cashewproducersinyear1,13,500inyear2and13,500(different)cashewproducersinyear3,i.e.atotalof30,000producersduringtheproposedimplementationperiodofthreeyears.
TheProject CoordinatorwouldbesupportedbyaGIZ Coordinator (junior expert) inahalf-timepositionwhichwouldbeattachedtotheGIZofficeinMaputo.Sheorhewouldsupportandbackstoptheprojectintheadministrationoffinancialmatters,therealisationoftrainingcoursesandM&Eactivitiessurroundingtheperformanceoftheproject,especiallyconcerningthelogisticsandthecontractingofnationalshort-termexperts.Thispersonwouldalsosupporttheproject’snetworkingwithotherdonorsandNGOsandpromotedialoguebetweentheprojectandrelevantgovern-mentalinstitutions.
OneInternational Short-Term Expertwouldberesponsi-bleforprovidingtechnicalbackstoppingandadviceoncurriculumdevelopmentand,specifically,economicaspects.HeorshewouldalsoorientthedevelopmentofanM&E systemforperformancemonitoringandassessmentoftheproject’simpactatthefarmlevelandproposeandlobbyforapolicyenvironmentthatsupportsthedevelopmentofthecashewsector.
National Short-Term Experts,mostlikelymembersofresearchandeducationalorprofessionaltraininginstitutions(likeIIAM ),wouldberesponsibleforcurriculumdevelop-mentandfortherealisationofthetrainingcoursesforextensionistsandfacilitatorsaswellastheimplementationofrequiredfieldcomponentsofthemonitoringsystem.
Figure 3.7: Proposed organisational structure of the Project Component Mozambique
42 3.3 Training Activities
3.3.1 Training of facilitators
Inordertotrainthefacilitatorsitisnecessarytoaccountforacertainpercentageofdropouts,sothenumberoftraineesneedstobe20%higherthanthefigures in Table 3.3 on page 41,hence48,216and216duringthethreeyearsforatotalof480individuals.
Thetrainingoffacilitatorswouldincludefourmodulesoffivedayseach,covering: (1) plantinganddiversification,(2)pruning,weeding,(3)integratedpestmanagement,(4) harvestandpost-harvestactivitiesandmarketing.Eco-nomicaspectswouldbeanintegralpartofthesemodules.
Thenumberofcourses,basedon20participantspercourse,is(mathematically)2.4inyear1and10.8eachineachofthefollowingyears,theirnumberaugmentedby2refreshercoursesinthesecondyearand9inthethirdyear.
3.3.2 Training of extensionists
Thetrainingandmonitoring/backstoppingofthefacilitatorsisdonebyextensionistswhowillbeselectedfromamongthemembersoftheextensionserviceandINCAJUinthepilotregions.Atotalof80peopleareneededduringthethreeyears:8inthefirstand36additionalonesineachofthefollowingtwoyears.
Theextensionistswillreceivetrainingingroupsof10byin-ternationalandlocalspecialists.Thistrainingconsistsofsixmodulesoffivedayseach,covering:(1) plantinganddiversi-fication,(2)pruning,weeding, (3)pestmanagement,(4) har-vestandpost-harvestactivitiesandmarketing,(5)economicsofcashewproductionand(6)farmersassociations.
Onesuchcoursewillbeheldinthefirstyearandfoureachwillbecarriedoutinthesecondandthirdyeartotrainnewprojectstaffplus,inaddition,onerefreshercourseinthesec-ondyearandfourinthethirdyear.
3.3.3 Training contents
Thetrainingcontentsofthecoursesaretoalargedegreeidenticalinsofarasfarastheycoveraspectscloselyrelatedtocashewproductionandmarketing.
However,thetrainingoftheextensionistsincludesaspecificmoduleontheeconomicsofcashewproduction,asthisgroupshouldunderstandaspectsrelatedtoproductivitynotonlyofcashewproduction,butalsoofthemethodologyfordetermin-ingthefeasibilityofinvestmentsandalternativecrops,whichwouldbebeyondthepresentcapabilitiesofthemajorityofsmallholders.
Themodularconstructionofthetrainingcourseswillfacilitatetheeasyadaptationofthecoursecontentstothespecificneedsofthetrainees.Aproposalforthecontentsofthecourse(toberefined)isgiveninthetable 3.4 on the following page.
Table 3.4: Proposed main contents of the training modules
Training Course CASHEW PRODUCTION for extensionists (E) and FFS facilitators (F) (contents to be refined by project staff)
Objective: Participants know how to increase the productivity and profitability of cashew production as well as of nursery management and are aware of gender and HIV aspects
Method: Short exposure to the relevant theories, brief presentation of research results, group exercises in the classroom and in the field building on/incorporating participants’ experiences
Module 1: Integrated Crop Management (ICM) in cashew nut production (for E+F) ÿ Pruning and cleaning trees ÿ Prevention and treatment of pests and diseases ÿ Natural and chemical control measures ÿ Use of mist sprayers / health protection ÿ Harvesting and post-harvest techniques ÿ Marketing of cashew nuts ÿ Increasing the value added of by-products
Module 2: Planting and plant substitution (E+F) ÿ Field preparation for planting ÿ Suitable times for planting ÿ Proper seedling care before and after planting
• Supply of nutrients• Physical support• Plant protection • Watering
Module 3: Intercropping and diversification (E+F) ÿ Reasons for diversification (aspects of risk) ÿ The ‘machamba’ as a production system ÿ Production planning involving various crops
• Aspects of food security • Aspects of soil fertility• Labour requirements and monthly budgets• Economic aspects (income effects,
liquidity aspects, monthly cash flow) ÿ Intercropping of cashew with annual crops
(costs and benefits, problems)
Module 4: Farmers associations (FA) / Cross-cutting issues (E+F) ÿ Types of farmers groups and their characteristics ÿ Benefits expected from group action ÿ Differences between FA and private enterprises ÿ Management of farmers associations ÿ Factors determining an FA’s success or failure ÿ Legal aspects of FAs ÿ Gender aspects in cashew production ÿ Precautions against HIV
Module 5: Nursery management (E and persons interested in establishing private nurseries) ÿ Plant selection for rootstocks ÿ Grafting of plants ÿ Production techniques and plant hygiene ÿ Logistics (seedling distribution) ÿ Economics of producing tree seedlings (fixed and variable
costs, unit cost calculation, investment analysis, etc.)
Module 6: Adult Learning and Didactics for rural advisors (E+F) ÿ Differences between adult and child education ÿ The learning process ÿ Communication techniques ÿ Visualisation techniques ÿ How to increase the rate of adoption of new techniques
(management of demonstration fields)
43
44 3.4 Estimated Costs of the Project
Thecostsoftheproposedprojecthavebeenestimatedusingtheprincipalsofcostestimation(usingthehigherestimatesincasecostsvary).
3.4.1 Costs of experts
Thesecostsamountto441,660 US$duringthetotalperiodandinclude:
ÿ ThesalaryofapermanentGIZCoordinator(JuniorExpert)attheGIZofficeMaputoworkinghalf-timefortheproject,amountingto72,000 US$peryearand216,000 US$intotal
ÿ FlightandothertravelcostsoftheGIZCoordinatorwithinMozambique,amountingto5,220 US$peryearand15,660 US$intotal
ÿ Thecostofinternationalshort-termexpertsworkingfortheprojecttwomonthsperyear,being66,000 US$peryearand198,000 US$intotal.Thisisbasedon22,000 US$/monthhonoraryfee,4,500 US$/monthperdiems,andacostof5,700 US$forinternationalflights
ÿ Thecostofnationalshort-termexpertsworkingfortheprojecttwomonthsperyeartopreparecurriculaandcarryouttrainingcourses(4,000 US$/yearand12,000US$in3years)
3.4.2 Investment costs
Thesecostsamountto106,500 US$.Thesearecomposedof:ÿ Officeandcommunicationequipment(1,500 US$inyear1)ÿ Thecostofafour-wheel-drivecar(40,000 US$inyear1)ÿ Thecostof6motorbikes(30,000 US$inyear1–forthe
DeputyCoordinator,theSpecialistforsupportingfarmersorganisationsandthe4DistrictCoordinators)
3.4.3 Costs of technical staff a t the project office in Nampula and office running costs
Thesecostsamountto632,760 US$forthetotalperiodandconsistof:
ÿ ThesalaryoftheNationalCoordinatorandhishousingallowance,whichamountsto48,000 US$peryearand144,000 US$intotal(basedon4,000 US$/monthin-cludingsocialsecuritycontributions)
ÿ ThesalaryoftheDeputyCoordinator(AgriculturalEcono-mistandMarketingSpecialist)andhishousingallowance,whichamountsto24,000 US$peryearand72,000 US$intotal(basedon2,000 US$/monthincludingsocialsecuritycontributions).Itisimportantthatoneexpert,specialisedineconomicsandmarketing,isemployedbytheprojectto
adviseandsupervisetheextensionists,tosupportthemarketingofcashewnuts,especiallythroughfarmers’organisationssuchasfarmers’groupsorassociations,andtoadvisethemanagementofsuchfarmergroupsonhowtomaximisethebenefitsforthemembersbymarketingproducts,buyinginputsjointlyorrenderingservicestoitsmembers
ÿ ThesalaryofaSpecialistforSupportingFarmersOrgani-sations(InstitutionBuildingandCapacityDevelopmentSpecialist)andhishousingallowance,whichamountsto24,000 US$peryearand72,000 US$intotal(basedon2,000 US$/monthincludingsocialsecuritycontribu-tions).Attheprovinciallevelsuchaspecialistshouldbeavailabletosupportfarmersgroupsthatwanttodevelopintoformalassociationsandinordertoadviseexistingassocia-tionsinstrengtheningtheirorganisationalandmanagerialcapacities.HewillcooperatecloselywithNGOsworkinginthisfieldinNampula
ÿ ThesalaryoftheOfficeManager,whichamountsto6,600 US$/yrand19,800 US$intotal(basedon550 US$/monthincludingsocialsecuritycontributions)
ÿ Thesalaryofthedriver,whichamountsto4,800 US$peryearand14,400 US$intotal(basedon400 US$/month)
ÿ Thecostofguardsandancillaryofficecosts(electricity,stationaryetc.)whichamountsto1,800 US$peryearand5,400 US$intotal(basedon150 US$/monthinclud-ingsocialsecuritycontributions)
ÿ Therentforthe3-roomofficewhichamountsto12,000 US$/yrand36,000 US$intotal(basedon1,000 US$/month)
ÿ Thesalariesofthe4DistrictCoordinators,whichamountto48,000 US$peryearand144,000 US$intotal(basedon1,000 US$/monthincludinghousingallowanceandsocialsecuritycontributions)
ÿ TheallowancesoftheDeputyCoordinator,theSpecialistforSupportingFarmersOrganisations,andthe4DistrictCoordinators,whichamountto19,800 US$peryearand59,400 US$intotal(basedon10nights/month/personand1,000MTs/nightequalling330 US$/month/personatanexchangerateof30 MTs/US$)
ÿ Runningcostsoftheprojectcarof5,000 US$peryearand15,000 US$intotal(20,000 kmperyearat0.25 US$/km)
ÿ Runningcostsofthemotorbikesof13,500 US$/yearand40,500 US$intotal(basedon6motorbikes,50 km/day/motorbike,300work-daysperyear=60,000 km/yrandbasedonvariablecostsof0.15 US$/km)
ÿ TravelcostsoftheCoordinatorof3,420 US$/yrand10,260 US$intotal(assuming2flights/yrtoAccraandbackat2,000 US$each,6flights/yrtoMaputoandbackat300 US$each,16internationalovernightallowancesof180 US$/nightand18in-countryovernightallowancesof30 US$/night)
45 3.4.4 Costs of the extension technicians CooperationisintendedwithINCAJUandMINAGwhicharekeyplayersinthesector.ItisassumedthatINCAJUandMINAGcanbepersuadedtoreorienttheworkoftheiragentsintheprojectareasothattheycanserveassupervisorsoftheFFSfacilitators.Theirsalariesmustthennotbeconsideredasaprojectcost.Thecostsassociatedwiththetrainingoftheextensionworkersandwiththeirworkexecutionitselfamounttoatotalof219,313 US$duringthe3yearperiodandincludethefollowing:
ÿ Thecostsoftrainingtheextensiontechnicians(extension-ists)andincluding,inyear1,sixprojectstaffmembers,of2,257,500 MTsintotal.Thecostcalculationforthetrain-ingcoursesconsiders25 daysofthecourse,10participants/course,acostofthe2trainersof2x3,000 MTs/day,roomandboardfortheparticipantsof350 MTs/day/trainee,andcostsoftrainingmaterialof100 MTs/day/trainee)
ÿ Thecostsofone5-dayrefreshercourseinyear2andfoursuchcoursesinyear3,amountingto262,500 MTsintotal
ÿ Thecontributionoftheprojecttotheextensionists’useoftheirmotorbikesinthefollow-upofthefacilitators,whichamountstoatotalof4millionMTsinthe3years
3.4.5 Costs of the FFS facilitatorsThecostsassociatedwiththetrainingofthefacilitatorsandwiththeirworkamounttoatotalof355,649 US$forthe3yearperiodandinclude:
ÿ Incentivepaymentstothefacilitators,whichamounttoatotalof1.2millionMTs(basedon50 MTspaidpermeetingwiththeFFSmembers,3FFSperfacilitatorand20meetingswitheachFFSduringtheyear=3,000 MTs/facilitator/year.With40facilitatorsinyear1and180inyears2and3,theannualtotalsare120,000 MTsinyearoneand540,000 MTsineachoftheyears2and3)
ÿ Thecostsofhandouts(leaflets)giventotheFFSmembers,amountingto180,000 MTsinyear1and810,000 MTsineachofthefollowingtwoyearsforatotalof1.8mil-lion MTs(basedonacostof60 MTsperhandout)
ÿ Thecostoftheinitialtrainingofthefacilitators,whichtotals7,224,480 MTsduringthe3yearperiod.
Thecalculationconsiders20 daysofthecourse,20partic-ipants/course,acostofthe2trainersof2x3,000 MTs/day,roomandboardfortheparticipantsof350 MTs/day/trainee,costsoftrainingmaterialof100 MTs/day/traineeatransportallowanceof50 MTs/traineecovering4trips,andtheneedtotrain20%morepeoplethanthenumberoffacilitatorsactuallyneeded
ÿ Thecostoftwo5-dayrefreshercoursesinyear2andofninesuchcoursesinyear3,totalling445,000 MTs
3.4.6 Training institutionItissuggestedthattrainingbecarriedoutatADPP’strainingcentreinIthuculo.Thistrainingcentrehasthefollowingad-vantages:
ÿ Sufficientcapacity(upto40participants)totrainfacilita-torsandtechnicians
ÿ Existingdidacticmaterialfortraining,e.g.pinboards,flipchartstands,etc.
ÿ Thepossibilitytoofferfullboardinthecentreitselfÿ About100 haofcashewtrees,whichcancomplementthe
trainees’theoreticallessonswithpracticalexercisesÿ Equipmentforprocessingthenutsandextractingthe
juicefromthecashewapplesÿ Additionalcrops,whichareimportantfortheobjectives
ofdiversifyingfarmproductionandincomesÿ Thecentrehastrainerswhowillbeabletotrainthepar-
ticipantsinICPMandwhoknowthesituationonsmallfarmsbecausetheyalreadyadvisefarmersgroupsoncash-ewproduction
ÿ Trainingmaterialforcultivatingcashew,whichonlyhastobeadaptedtotheneedsoftheproject
Inthecostcalculation,thecostoftrainingisbasedontheratesofthistrainingcentre.
3.4.7 Contingencies
Inordertocoveradditionalexpensesthatcannotbeforeseenatthepresenttime,contingenciesof175,000 US$(roughly10%ofthecalculatedtotalcosts)areincludedinthebudget.
Table 3.5: Costs of Project Business Skills to Farmers in FFS - Mozambique, Nampula Province
Year 2010 2011 2012 Total
No. of Farmer Field Schools (FFS) 120 540 540 1.200
No. of farmers in FFS 3.000 13.500 13.500 30.000
Cost of experts Unit US$/unit No/yr US$ US$ US$ US$
GIZ Coordinator Maputo (half-time, 6000 US$/calendar month)cal.
month6000 12 72.000 72.000 72.000 216.000
National flights and travel costs for GIZ-coord.(5 days/visit) 1 visit 870 6 5.220 5.220 5.220 15.660
International short term experts 2 month 33000 2 66.000 66.000 66.000 198.000
National short term experts month 2000 2 4.000 4.000 4.000 12.000
Subtotal 441.660
Investment costs
Furniture, office equipment, communication set 1500 1 1.500 1.500
Car, 4 wheel drive unit 40000 1 40.000 40.000
Motorbikes unit 5000 6 30.000 30.000
Subtotal 71.500
Cost of technical staff and running costs of the project office Nampula
Coordinator salary incl. housing cost month 4000 12 48.000 48.000 48.000 144.000
Deputy coordinator incl. housing cost month 2000 12 24.000 24.000 24.000 72.000
Farmers organisation specialist (FOS), incl. housing cost month 2000 12 24.000 24.000 24.000 72.000
Office manager/acountant/secretary 3 month 550 12 6.600 6.600 6.600 19.800
Driver month 400 12 4.800 4.800 4.800 14.400
Guard, cleaning, electricity, stationary, etc. 3 month 150 12 1.800 1.800 1.800 5.400
Office rent (three rooms) month 1000 12 12.000 12.000 12.000 36.000
Four district coordinators incl. housing cost 3 month 1000 48 48.000 48.000 48.000 144.000
Allowances for deputy, FOS, and district coordinators (330 $/month each) 4 month 330 60 19.800 19.800 19.800 59.400
Running costs of the car km 0,25 5.000 5.000 5.000 15.000
Running costs for the 5 motor bikes (50 km/day, 300 days/year) km 0,15 13.500 13.500 13.500 40.500
Travel costs of the coordinator (to Maputo and international travel) 5 3.420 3.420 3.420 10.260
Subtotal 632.760
Costs of extention technicians
Subtotal extension technicians (see calculation below) 219.313
Costs of facilitators
Subtotal facilitators (see calculation below) 355.649
Contingencies
Subtotal contingencies (~ 10%) 175.000
GRAND TOTAL (US$) 1.895.883
GRAND TOTAL (EURO) 1.365.036
46
Costs of extentionists 6 Unit Total 2010 Total 2011 Total 2012 Total 3 yrs
No. of extension technicians needed No 8 36 36 80
No.of courses needed to train extensionists (10 persons/course) No 0,8 3,6 3,6 8
Cost of training extensionists (plus, in 1st year, 6 project staff members) 7 MTs 367.500 945.000 945.000 2.257.500
No. of 5-day refresher courses for extensionists No 1 4 4
Cost of 5-day refresher courses for extensionists MTs 73.500 189.000 262.500
Costs of transport (motor bikes) for extensionists MTs 400.000 1.800.000 1.800.000 4.000.000
Subtotal (MTs) 6.579.400
Subtotal (US$) 219.313
Cost of facilitators
No. of farmer field schools No 120 540 540 1.200
No. of trained farmers (Ongoing training) No 3.000 13.500 13.500 30.000
No. of needed facilitators No 40 180 180 400
No. of trained facilitators (20% more than no. of trainers needed) No 48 216 216 480
Costs of the FFS (incentive for facilitator) MTs 120.000 540.000 540.000 1.200.000
Costs of handouts for farmers MTs 180.000 810.000 810.000 1.800.000
No. of training of facilitators No 2,4 10,8 10,8 24
Cost of the training of facilitators MTs 722.448 3.251.016 3.251.016 7.224.480
No. of refresher training courses per year (5 days/course) No 2 9 11
Costs of refresher ToTs per year (5 days/course, 2 trainers) MTs 100.000 345.000 445.000
Subtotal (MTs) 10.669.480
Subtotal (US$) 355.649
Exchange rate (US$ : MTs) 30
Exchange rate (US$ : Euro) 0,72
Base values used in the calculation of the costs of training extensionists and facilitators and determining costs associated with their work execution Unit Value
No. of participants per training course for extentionists No 10
No. of training days fextensionists 8 days 25
Costs of trainers for training facilitators or extentionists (per day per trainer) MTs/day/p. 3000
Costs of room and board (full board) during training for extensionists or facilitators (per day and per person) MTs/tr.day/p. 350
Costs of training material (per day and per person) MTs/tr.day/p. 100
Costs of training for extensionists (2 trainers per course) MTs/course 262.500
No. of trainees needed in training course to produce one trained facilitator No 1,2
No. of training days for facilitators 9 days 20
No. of participants per ToT for facilitators No 20
Costs of transport for facilitators to the training (to and back, 4 times) MTs 50
Costs of one training course for facilitators (2 trainers per course) MTs 301.020
Costs of transport (motor bike) for extensionists 10 MTs/year 50.000
No. of facilitators supervised by one extentionist No 5
No. of participants per FFS No/FFS 25
No. of field days/year per FFS No/FFS 20
No. of FFS per facilitator No.FFS/Facil. 3
Incentive paid to facilitator per field day assisted MTs/field day 50
Cost of handouts for farmers MTs/farmer 60
1 6 flights/year, 300 US$ each, 30 days allowances, (30 US$/day and 80 US$/night) sums up to 5220 US$/year2 Costs of an international short term expert: 4500 US$/month per diem, 22,000 US$/month honorar fee, 5700 US$ for international flights3 including expenses for social security 30.5%4 Costs for overnight staying of district coordinators (10 nights per month, 1000 MTs/night, 10,000 Mts/month/coordinator)5 Costs of travel for the coordinator: 6 national flights/year to Maputo 300 US$ each, two international flights/year to Accra 2000 US$ each. In addition to this per diems of 30 US$/night for 18 nights in Maputo, 180 US$/overnight for 16 nights in Accra6 The salaries of the extentionists are paid by INCAJU or MINAG. Each extentionist is assisting the field days of each facilitator he super-vises two times during one training month. There will be 10 training months per year. 7 The training in year 1 will include 6 project staff members, hence (8+ 6)/10 trainees requiring 1,4 courses at a cost of 25 days/course x 9500 MTs/day8 Training for extentionists: 5 modules, 5 days each: (a) Planting and diversification; (b) Pruning, weeding; (c) Pest management; (d) Har-vest and post harvest (e) Economics of Cashew production9 Training for facilitators: 4 modules, 5 days each: (a) Planting and diversification; (b) Pruning, weeding; (c) Integrated pest management; (d) Harvest and post harvest.10 Costs of transport by motorbike (investment 5000 US$, residual value 500 US$ economic live 6 years) depreciation 750 US$/year, fuel 80 US$ /month, maintenance and repairs 50 US$/month, 10,000 /year) 0,15 US$/km or 5 MTs/km. Average distance is about 25 km/visit
47 Table 3.6: Calculation of the cost of extension technicians and facilitators
48 3.5 Next Steps
Oncethisprojectproposalhasbeendiscussedbytheauthori-tiesconcernedandaProjectAgreementhasbeensigned,thefollowingstepswillhavetobeinitiatedtobegintheprojectimplementation:
ÿ EstablishingaSteeringCommitteeanddefiningitstasks.ÿ Selectingimplementationpartnersandreachingagree-
mentontheimplementationstrategyandprocedures.ÿ Contractingexpatriateandlocalprojectstaffandestab-
lishingtheofficeinfrastructure.ÿ Reachingagreementswithorganisationsthatcanprovide
trainers.ÿ Holding a joint planning workshop with representa-
tives of all stakeholders. Reaching agreement on the planned activities (Plan of Operations for the entire implementation period of 3 years and Plan of Activi-ties for year 1, which should include the following):• Realisationoftrainingforthefirstgroupsofexten-
sionistsbyspecialists(internationalandnational)Groupsizeshouldnotexceed10people–thecoursemaybesplitintotwoormoresections
• IdentifyingandformingtheFarmer Field Schools (lo-calities,members,facilitators,selectionofplotsforthefielddemonstrations)
• Trainingofthefacilitators(20peoplepercourse,modules1,2,3,4and6above).
• ActivatingfirstFFSinthedistricts.
Apartfromthesekeyactivities,theprojectneedstodevelopadditionalactivitiesto
ÿ Identify,afterapprovalbyINCAJU,privatesectorpartnersthatareinterestedintheproductionofseedlingsandad-visethemonthestart-upoftheactivity.
ÿ Supporteffortstoimprovesmallholders’accesstoformalcredit.
ÿ Helpimprovesmallholders’accesstoinputs.
49 List of Acronyms
ACA AfricanCashewAlliance
ACi AfricanCashewInitiative
ADPP AjudadeDesenvolvimentodePovoparaPovo
AIA AgroIndustriaisAssociados
AICAJU AssociaçãodosIndustriaisdeCaju
AFD AgenceFrançaisedeDéveloppement
CLUSA CooperativeLeagueoftheUnitedStatesofAmerica
EPV EstimatedProductionVolume
FAO FoodandAgricultureOrganization
FFS FarmerFieldSchool
GIZ DeutscheGesellschaftfürTechnischeZusammenarbeit
ICPM IntegratedCropandPestManagement
IIAM InstitutodeInvestigaçãoAgráriadeMoçambique
INCAJU InstitutoNacionaldoCajú
IRR InternalRateofReturn
M&E MonitoringandEvaluation
MINAG MinistériodeAgricultura
MT/MTS Metical/Meticais(Mozambicancurrencyunit)
NGO Non-governmentalOrganization
PMD PowderyMildewDisease
RCN RawCashewNuts
SNV NetherlandsDevelopmentOrganization
SWOT Strengths,Weaknesses,Opportunities,Threats
TIA TrabalhodoInqueritoAgrícola
USAID UnitedStatesAgencyforInternationalDevelopment
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