Analysis of the Cashew Sector Value Chain in Côte d’Ivoire

Cashew nuts are grown in northern, north-western and north-eastern Côte d’Ivoire, where cashews and cotton are the main cash crops. The total production of cashew nuts in Côte d’Ivoire rose from 6,300 tons in 1990 to 335,000 tons in 2008, with over 20% of the increase occurring between 2004 and 2010. According to Autorité de Régulation du Coton et de l’Anacarde, the government body overseeing the cashew sector (ARECA), the rise resulted from increased land cultivation rather than a rise in productivity, and cashew plantations covered around 420,000 ha in 2005.

Côte d’Ivoire currently exports more cashew nuts than any other country worldwide and is the world’s third highest producer of cashews; the lion’s share of the production is exported in the form of raw cashew nuts to India (71%) and Viet Nam (28%). 8 9

The civil war in Côte d’Ivoire, which began in 2002, has had serious consequences for the national cashew sector – more than 54% of the cashew-growing areas are located in the area occupied by the rebels. Cashew farmers depend heavily on manual labour for maintenance and harvest and the war has had a negative impact on the cost and availability of manpower –most farm workers are from neighboring countries such as Mali, Burkina Faso and Guinea, and have returned home because of the crisis.

The poverty rate in Côte d’Ivoire has risen sharply: in 2008, one in two persons was categorized as poor, compared to 1 in 10 in 1985. Poverty is primarily a rural problem: 12 out of 20 rural inhabitants are classed as poor, whereas only 6 out of 20 urban dwellers are poor. There are no specific figures on the prevalence of poverty among cashew farmers. In recent years, however, poverty has spread essentially in rebel-held areas – the areas where cashews are grown. It can be assumed therefore that many cashew farmers belong to the poor population
group.

Cashew nuts are grown mainly by small-scale farmers. Owing to property laws, female farmers account for only about 17% of all cashew farmers. Farmers cultivate cashews extensively, using few inputs. Few farmers use insecticides. Some cashew trees profit from the fertilizer given to intercropped cotton. Furthermore, farmers do not make sufficient efforts to properly maintain the trees, carefully harvest the fruit or carry out proper post-harvest treatment. Women are traditionally in charge of harvesting, transporting, sorting and drying the fruit. Yield per
tree is very low, amounting to 2 or 3 kg of raw cashew nuts per tree per year. Average income from cashew production is subsequently also very low.

Associations of cashew farmers are still weak. However, experience in other countries has shown that strong producer group associations are a pre-condition for accessing inputs (in particular, credit), making use of economies of scale and better defending the interests of the sector at political level. Various actors at local, national and international levels are involved in the marketing of cashews. Most farmers sell their nuts to local traders, mostly community members whom they know and who come to their farms. The local traders sell their products to independent buyers or to buyers working with bigger trading companies. Local traders thus operate as intermediaries between buyers and farmers. Certain buyers work with big trading companies or export companies, some of which have global connections and pre-finance the costs of the buyers for the nuts. This system for marketing cashews functions relatively well and ensures some degree of competition, at least at the level of buyers and trading companies. Marketing of the nuts is dominated by export firms, which exported more than 76% of output in 2009. However, despite the minimum producer price fixed by INTERCAJOU (Association inter professionnelle de la filière cajou), which is made up of representatives of farmers, exporters and processing companies, it is doubtful whether farmers have a sufficient overview of price changes on local, national and global markets or the knowledge to negotiate with traders.

Only a small part of the cashew nuts is processed locally. The cashew processing industry in Côte d’Ivoire is in its infancy and most factories started operations as recently as 10 years ago. The oldest and one of the biggest companies is SITA, which has a processing capacity of 2,500 tons and started operations in 1998. Apart from SITA there is OLAM Ivoire, with a processing capacity of 5,000 tons per year, and a third company with a 5,000- ton processing capacity is currently being constructed. Two further small-scale processing companies and many small-scale processing cooperatives have started up in the past ten years. Major bottlenecks to expansion, especially for small-scale companies and cooperatives, are access to working and investment capital and inappropriate technologies that lower the quality of the processed nuts.

Whereas the bigger processing companies in Côte d’Ivoire have strong growth potential, smaller companies and cooperatives will have to prove their competitiveness on national and global markets in the coming years. Cooperation agreements between smaller units and well-established processing companies could be the means to ensure the sustainability of cashew processing cooperatives.