DAKAR, 18 July 2013 (IRIN) – A slump in cashew nut prices in Guinea-Bissau has left nearly half of the population eking out food, with families skipping meals or selling livestock to survive until the next harvest in September, aid groups say.
The average price per kg of cashews is 112 CFA francs (two US cents) – the lowest yet – down from an average of 300 CFA in 2012. The 63 percent drop is due to plummeting international prices, reduced demand from Guinea-Bissau’s main cashew importer (India), the April 2012 coup, disagreements between the government and traders on benchmark price as well as banks’ decision to reduce loans to traders.
“The result is a significant decrease of [people’s] food security which obliges them to revert to coping mechanisms such as skipping meals, reducing food intake, selling animals and so on,” Ussama Osman, the World Food Programme (WFP) country director in Guinea-Bissau, told IRIN.
This year marks a second consecutive year of falling cashew nut prices. In July 2012 the country exported 60,000 tons of cashew nuts compared to more than 100,000 tons by the same time in 2011.
Eighty percent of Guinea-Bissau’s 1.6 million people are involved in cashew nut production. Farmers sell their produce basically to buy food, or they barter cashew nuts for food. The terms of exchange have also worsened. One kilo of rice now “costs” 3kg of cashew nuts, up from an exchange rate of 1:1, Osman explained.
“People’s diet is becoming very poor. They stick to the basic food [rice] but the terms of exchange affect the quality and quantity of their food intake,” he said. “Forty-eight percent of the entire population faces a huge food gap during this lean period that requires an emergency intervention.”
A June rapid food security assessment conducted by WFP, the Food and Agriculture Organization (FAO), Guinea-Bissau’s Ministry of Agriculture, the National Cashew Nut Agency and the National Institute of Statistics in seven of the country’s nine regions found that only 8 percent of those interviewed had cereal stocks to last one and a half months.
Some 38 percent of this year’s harvest has not been sold due to the poor prices. Rice imports, which depend on cashew revenue, are expected to be low, “thus combining lack of access and availability of the main source of food during the lean season,” said Patrick David, FAO’s regional food security analyst based in Dakar.
Over-reliance on cashews
Cashews account for 90 percent of Guinea-Bissau’s exports and 45 percent of its GDP. With the withdrawal of budgetary support by key lenders following the 2012 coup, the government will face difficulty in paying public service salaries after the cashew harvesting season ends in September, the International Monetary Fund foresees.
Over the years, farmers have converted swathes of forest into cashew orchards and increasingly rely on the land-extensive and low-labour- intensive crop, thus drastically reducing cereal production. Cashew revenue funds tin roofing for houses, marriages, feasts, funerals, bicycles and buying rice among other things, explained Marina Temudo, an agronomist at the Portugal-based Tropical Research Institute (IICT).
“The country has been transformed into a huge cashew tree plantation. This has both economic and environmental hazards. While farmers are now aware of the economic perils of being exclusively dependent upon one cash crop whose market is highly unstable, they have still no idea of the risks of mono-cropping in terms of pests and diseases,” Temudo told IRIN.
“The change from a relatively broad-based food provisioning to almost full dependence on one cash crop is not without shortcomings for farmers’ livelihoods. Food insecurity and indebtedness are growing as a result of the combined effects of a reorientation of the farming systems towards cashew production and dependence upon the market for food supply, as well as the consequences of climate change and the increased use of credit to solve pre-harvest food shortages.”
Farmers should diversify, said Temudo, noting that some farmers have begun switching to food production. “This process should be supported by external agents and donors with incentives for food production and processing facilities,” she said.
The current crisis is forcing some farmers to sell their yet-to-be-harvested food crops at half price in order to buy staples, WFP’s Osman explained. The organization has seen funding for basic nutrition and food security programmes frozen since the coup.
“There is need for immediate financial support from the donors. They have to realize that political pressure, sanctions and boycott are punishing the most vulnerable. A gesture to these people is needed immediately,” he said.