What you need to know about the macadamia and cashew nut ban

Kenya is one of the largest producers of macadamia nuts in the world. It has over 20 licensed processors and over 6,000 macadamia farmers, with a majority of them coming from the Mount Kenya region.

About 90 to 95 per cent of macadamia produced is exported, making it the most lucrative cash crop in the country after tea.

This has increased in recent years, making Kenya among three leading macadamia producers globally, with a global market share of 13 per cent.

The ever increasing demand for macadamia nuts has led the Kenyan government into imposing laws and changes over the years that are meant to benefit both the farmers and the country in general.

In 2009, President William Ruto, the then-Agriculture minister, banned the export of raw macadamia and cashew nuts to improve the nuts industry and also introduce new processors to intensify competition in the sector.

This change led to an increase in production of macadamia from 13,000 tonnes to 27,000 tonnes annually, and farmers pay from Sh30 per kilogramme to Sh120.

However, in December 2010, Ruto's successor, Sally Kosgey, lifted the ban for six months to mop excess nuts that had caused producer prices to fall.

In 2015, the ban was upheld through the new Agriculture, Fisheries and Food Authority Act of 2013 which stated: "The government banned the export of raw cashew nuts, pyrethrum, bixa, macadamia or any other agricultural product as may be prescribed, except with the written authority of the Cabinet Secretary (CS)."

The ban was placed by the government to promote local processing, boosting industrialisation and creating employment opportunities for Kenyans. This saw the creation of different processing plants, one of them being Sasini Macadamia Factory.

Farmers would sell their raw macadamia and cashew nuts to these processors who would later look for market for the processed nuts.

A section of traders who were unhappy with the law, threatened to file a petition if the Act 2013 won't be repealed. They accused the nuts processors of exploiting farmers by buying their produce at low prices.

In 2016, the then-Principal Secretary (PS) Dr. Richard Lesiyampe started a crackdown on individuals who were secretly exporting raw macadamia and cashew nuts.

Lesiyampe insisted that the government's decision to discourage export of raw nuts was because they wanted to develop the local industry.

"You cannot just come from nowhere because the prices are good and start collecting nuts. Companies are investing huge amounts of money in setting up processing plants and here we have brokers or middlemen who want to reap where they did not plant. The government will not allow it," Llesiyampe said.

Already, Sasini had planted about 6,000 macadamia seedlings in its coffee plantations in Kiambu County and had over 20,000 seedlings in nurseries.

For a short period of time, the ban benefited both the farmers and the government. However, with time, the processing companies started buying macadamia and cashew nuts at a throw away price with a kilogramme fetching as low as Sh20 compared to Sh200 a few years back.

In 2023, the Trade Cabinet Secretary Moses Kuria lifted the ban for one year. According to Kuria, lifting of the ban will open the market to global buyers, thus allowing farmers to sell to the highest buyer.

"Don't sell your macadamia at Sh20 to brokers and allow us to give the way forward after ten days. I don't want the farmers' products to go to waste due to low cost, thus through the AFA board, I'll ensure we get the right terms," Kuria said.

Senators are now pushing for the permanent lifting of the ban on the exportation of raw nuts, saying that it has resulted in significant losses for local farmers since it came into force with value-added macadamia going for Sh3,600 a kilogramme while farmers receive at most Sh30 a kilogramme.

The lifting of the ban is expected to benefit small-scale farmers, who have been hit hard by the low prices, and enable them to sell their produce at better prices and enable Kenya to tap into the growing demand for macadamia nuts globally and increase its exports.