Ban on export of nuts was meant to exploit farmers, so why is it still on?

Just the other day, five MPs from Murang’a and Embu counties appealed to the government to re-impose the ban on the export of raw macadamia nuts.

The MPs said they would introduce a motion in Parliament seeking a formal ban on the exportation of unprocessed nuts.

It was instructive that MPs Elias Mbau (Maragwa), Muturi Mwangi (Kiharu), Clement Wambugu (Mathioya), Emilio Kathuri (Manyatta), and Maina Kamau (Kandara) were speaking at the premises of a nut processing factory where they were honoured guests.

They railed against the government for allowing exportation of raw nuts while the country had the capacity to process and export value-added products, hitting out at middlemen whom they accused of buying macadamia nuts directly from farmers for export to the Chinese market.

Before their fulminations, however, the MPs would have been advised to read the April 7 edition of Business Daily.

The newspaper reported that cashew farmers at the Coast were reeling from the ban on the export of raw nuts.

Tonnes of cashew nuts were rotting in the fields and stores since the ban on exports left them at the mercy of local processors who were offering peanuts, pun fully intended, and were not even able to take up the full production.

Both cashew nuts, grown almost exclusively at the Coast, and macadamia nuts, produced largely in parts of central and eastern Kenya, were affected by the export ban imposed by then Agriculture Minister William Ruto in 2009.

The ban on export of unprocessed macadamia, cashews, pistachio, and oyster nuts was premised on the excuse that exports were depriving local industry of the opportunity to add value in processing and packaging that ultimately earns the country much more in foreign exchange and also creates local employment.

What we were not told was that the export ban was designed to benefit the processors who, in effect, got a stranglehold on both the produce and the market.

Hapless farmers were condemned to selling their produce at prices way below what they could get on the international market.

And with only a couple of serious factories dominating the processing and marketing end, what the government did was create a cartel from which farmers had very little bargaining power.

Processing nuts is a very simple and inexpensive business. It is basically frying or roasting, and adding salt.

When you go to the local supermarket, you are made to pay an arm and a leg for a small packet of the snacks.

The prices we pay as consumers might be in touch with the international prices, but what the farmer gets from that exploitative arrangement is hardly enough to keep him away from starvation.

Even without going into the complexities of the pricing structures, it is clear that something is very wrong when you visit Kilifi County, where cashew nuts are a key crop, and find farmers living hand to mouth while their products are selling like gold at the local shop.

If I was a macadamia or cashew farmer, I would demand the right to sell my produce to the Chinese, Japanese, Americans, Indians, Germans, or anyone else who would give me a fair price.

And I would vote out any MPs who colluded with local processors to deny me fair returns on my investment.

When Dr Sally Kosgei, who replaced Mr Ruto, in May last year temporarily lifted the export ban, the reason provided was that the window provided would “facilitate mop up of the excess raw nuts with farmers.”

That, in itself, was an admission that the ban was a monumental failure for it left nuts rotting for lack of a market.

Yet, soon after the export ban was lifted, the Parliamentary Committee on Agriculture said it was investigating Dr Kosgei’s action.

Committee chairman John Mututho said complaints had been received from the industry. It is apparent from the latest intervention by MPs that the industry is still lobbying hard.

Now the MPs must decide whether they stand with farmers, who suffer exploitation and penury because of export bans that don’t make sense, or with one or two big corporates that stand to reap millions by underpaying the growers.

mgaitho@ke.nationmedia.com