Cashew nut farmers adopt online payment system to beat brokers

Construction of a cashew nut factory in Kilifi County. [Omondi Onyango, Standard]

Cashew nut farmers at the Coast have established an online payment platform to get rid of brokers blamed for woes that brought down the once-thriving sector in the region.

The over 15,000 farmers from Kilifi, Lamu and Kwale counties recently also signed a purchase agreement with nut processor, Ten Senses Africa Limited, to buy their produce.

Yesterday, Ten Senses Africa Limited partnered with Safaricom to create a robust out-growers management system that is anchored on blockchain technology.

The online system will register all farmers, where each uses an identity card number as the access code. After the registration farmers would deliver their produce to a cashew nuts collection centre where an automated weighing machines have been installed to automatically relay all the details of each transaction to an individual farmer in real-time and payment made instantly to his Mpesa account.

With the collapse of the cooperative societies in the early 90s, brokers have dominated the industry, buying directly from farmers at very poor farm gate prices and selling to processors.

This has led to the decline of the sector since farmers could not venture into commercial farming in the sector due to low returns.

“The new technology aids in direct sourcing and traceability of the cashew products from farmer to the ultimate consumer. Further, being a social enterprise that specializes in organic farming and fair trade, farmers will get premium prices for their produce,” Frank Omondi, TSA Managing Director, said when the company opened cashew nuts buying from farmers for this season yesterday at Kilifi factory site.

The two partners are also offering cashew nut farmers one-stop accessibility to get agro inputs on loan that are also applied on mobile loan and accessed immediately as vouchers that farmers can use to procure farm inputs from any of 50 Agro shops the programme has established.

A farmer can get a loan of up to Sh500,000 depending on the number of trees on the farm, states the partnership agreement.

The loan also covers other crops that include maize, coconut, and green grams. Farmers will use the facility for land clearing and preparation, planting, and buying seedlings.

The platform, dubbed DigiFarm, farmers will also get insurance yield covers to cushion them against unforeseen losses.

The partners will also provide extension services to registered cashew farmers through remote agronomists stationed at the DigiFarm call center or on the ground- DigiFarm Village Advisors (DVA), through farmers clustered in groups of 200 at village level.

DigiFarm, a subsidiary of Safaricom PLC, is an integrated mobile platform that brings together farmers, buyers, input suppliers, services providers, agronomists among other players.

“This provides smallholder farmers with access to mobile phones, agronomic information, agri-finance support services, market linkages and agro-inputs,” Omondi Kasidhi, DigiFarm Director at Safaricom said, adding that it has over 1.3 million registered farmers in the country.

TSA is constructing a cashew nut processing factory in Tezo, Kilifi County that will be ready in February next year when the harvest season picks. It will have a processing capacity of 5,000 metric tonnes a year.

According to Omondi, equipment and machinery from Vietnam will arrive in the country in two weeks’ time. India and Vietnam process over 70 per cent of nuts from African, and according to Omondi, Kenya will also apply their models to create over 1,000 jobs in this labour-intensive sector.

The project is a culmination of a four-year journey that has been financed by the European Union (EU) to the tune of Sh240 million to revive a once-thriving cashew sector. The factory will next year process the first bunch of the nearly one million seedlings that have been distributed to the 15,000 organic farmers in the three counties during the project’s period.

The programme has also rehabilitated over 3,000 old trees, in what is technically known as top-working by removing aged and unproductive branches. This, according to Omondi, has increased their production 10-fold and the harvest will provide raw materials to the new factory.

The revival project is a partnership of the EU and Visegrad Group (v4) countries of Slovakia, Czech, Hungarian and Polish governments to plant over a million new seedlings by providing materials and other support to the 15,000 farmers registered to carry out organic farming.

Further, the programme is also supporting 150 schools that have planted 72,000 seedlings. 200,000 high-quality grafted seedlings will be distributed to selected high schools and primary schools. The schools will also be brought on board in the new programme.

“The school’s program is mutually beneficial, providing the schools with alternative revenue sources, equipping students with practical agriculture skills, supporting the country’s greening agenda by the planting of additional trees to help mitigate challenges of climate change adverse effects,” David Ogiga, the manager in charge of the programme at Ten Senses said, adding that this was important for the sustainability of the cashew production when the aging farmers are out of the business.

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