African Cashew initiative (ACi)
Title: African Cashew initiative (ACi)
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Burkina Faso, Benin, Ghana, Côte d’Ivoire, Mozambique
Partner: SAP, Kraft Foods, Intersnack, OLAM, Trade and Development Group
Lead executing agency: Benin: Ministère de l’Agriculture, de l’Elevage et de la Pêche (MAEP); Burkina Faso: Ministère de l’Agriculture et de la Sécurité Alimentaire (MASA); Côte d’Ivoire: Ministère de l´Agriculture (MINAGR); Ghana: Ministry of Food & Agriculture (MoFA); Mozambique: Instituto de Formento de Caju (INCAJU)
Overall term: 2009 to 2016
More than 40 per cent of the global cashew crop is produced by about 1.5 million smallholder farmers in Africa. The vast majority of these farmers live in rural areas and struggle to earn as much as USD 150 from cashew production each year. The low incomes result from a number of factors, including low yields, poor quality nuts and a lack of business skills.
Cashew farmers in Africa rarely organise themselves into associations, which weakens their bargaining positions with dealers. Furthermore, the often poor quality of their cashew nuts hampers their competitiveness on international markets. Another disadvantage is the fact that less than ten per cent of Africa's raw cashews are actually processed in Africa. Consequently, opportunities for job creation, local value addition and poverty reduction remain largely untapped.
Africa’s cashew sector is sustainable, with producers and processors in Benin, Burkina Faso, Côte d’Ivoire, Ghana and Mozambique all increasingly competitive. Farmers, processors and other actors in the cashew value chain have benefited from a sustained increase in incomes.
The African Cashew initiative (ACi) represents a new and innovative model of broad-based multi‐stakeholder partnership in development cooperation. It is funded jointly by the German Federal Ministry for Economic Cooperation and Development (BMZ) and the Bill & Melinda Gates Foundation. It brings together a long list of national and international partners from the private and public sectors involved in the cashew value chain: the African Cashew Alliance; the Cashew and Cotton Board of Ivory Coast; the Netherlands-based sustainable trade initiative IDH and Trade and Development Group; Mozambique's national cashew institute INCAJU; the international corporations Intersnack and Kraft Food, and agri-business OLAM; Ghana’s Ministry of Food and Agriculture; the German software developer SAP; and USAID.
The main objective of ACi is to increase the competitiveness and incomes of Africa’s smallholder cashew producers and of its processors and other actors in the value chain, thereby achieving a lasting reduction of poverty in the project countries. The initiative aims to increase the cashew processing capacity within Africa, to develop sustainable supply chains and to improve the organisation and coordination of the overall sector.
As part of ACi, GIZ works with its partners TechnoServe and FairmatchSupport to provide technical training and business advice to farmers and processors, and to build links between farmers and processors. ACi reinforces other initiatives in the cashew sector and addresses questions of investment and processing. It specifically targets companies that process cashew nuts in Africa, advising them on their daily operations and helping them to stay informed about market developments. It supports their applications for credit and other financial assistance as well as their efforts to improve technologically, and it provides technical assistance for the processing itself. It is also developing data systems to supply farmers and processing companies with relevant market information.
The initiative promotes African brands to improve the profile of high quality African cashews on world markets. It works with stakeholders along the cashew value chain to find ways of persuading decision-makers in the project countries to improve the business climate for cashew production and processing.
ACi has accumulated valuable experience and knowledge in the production and processing of cashew nuts and its by-products which it shares with others in the industry, notably processors and potential investors in Africa’s cashew processing sector. With a combination of strategies, the initiative aims to improve the incomes of 430,000 farmers in the project countries. By 2016 they should be earning at least USD 600 a year from sales of raw cashew nuts alone. It also aims to create 5,500 new jobs in cashew processing factories, most of them for women, and to increase the quantity of raw cashews being processed, from 7,000 MT (2009) to 100,000 MT.
To promote sustainable business relations along the cashew value chain, ACi engages both private and public enterprises in implementing its projects. To do so it uses a funding instrument known as the Cashew Matching Fund. The projects financed in this way aim to improve quality standards, promote sales direct from harvest, and increase income opportunities.
Since it started in April 2009, ACi has provided training to more than 333,000 cashew farmers in Benin, Burkina Faso, Côte d’Ivoire, Ghana and Mozambique – almost 30 per cent of all cashew farmers in Africa. About 25 per cent of these are women. Meanwhile, some 2,200 cashew experts have received specialised training and are now qualified to work as trainers themselves.
On the production side, the quality of cashews has improved significantly, which has helped boost the links between smallholder cashew farmers and local processing companies. The initiative remains on course to meet its target of improving the raw cashew nut sales per farmer by 2016.
Already, nearly 5,800 new jobs have been created in the local processing industries, 73 per cent of them for women. Their combined earnings amount to about USD 6,000,000, with a maximum wage of USD 800 per woman per year. Of the 20 processors supported by ACi, seven companies are already operating self-sufficiently, using their newly acquired knowledge with no need for further support. Currently, 13 companies continue to benefit from technical assistance in building a viable business. By the end of 2014, overall cashew processing capacity had expanded considerably to 48,200 MT (from 8,150 MT in 2008). While not all this capacity is fully utilised as yet, local processing in Africa has risen from five per cent to ten per cent.