Nuts is one of the six focus sectors of IDH’s Fresh & Ingredients program, which provides cross-sector solutions on smallholder farmer livelihoods, working conditions, agrochemical use and climate change issues.

In the Nuts sector we focus our work on the improvement of livelihood of the smallholder farmers in Africa. Cashew acts as one of the main cash crop for approximately 2 million small-scale farmers in Africa. These smallholders typically have extremely low yields of around 50% of the world average. Further, the cashew harvesting season falls into the so-called hunger gap – a time of the year where smallholders typically struggle to make ends meet – which elevates the potential livelihood impact of improved cashew production beyond a regular increase in yield and income.

Worldwide the annual production is about 2.1 million tons of raw nuts (RCN) with an estimated value of US$ 1.5 -2 billion. The main cashew production regions are Africa, India, Vietnam and Brazil. World cashew demand is growing strongly in terms of volume and value and is expected to continue growing rapidly. Main buyers from US and Europe, but also India, Vietnam and Brazil will have to source from Africa. Currently more than 50% of the cashew world production of Raw Cashew Nuts (RCN) is produced in Africa but less than 10% gets processed (shelling and peeling)  into cashew kernels in Africa. The remainder is processed mainly in India and Vietnam followed by Brazil, leading to a loss of value in the value chain in Africa.

In close partnership with ComCashew – a puplic private partnership predomintantly funded by GIZ (Gesellschaft für Internationale Zusammenarbeit) and BMGF (Bill & Melinda Gates Foundation) –  we support the organization of sourcing areas and creation of strong market links between farmer aggregates, processing factories in Africa and end-buyers in western countries.  Whereas processors and traders traditionally buy their cashews on the spot-market, IDH’s interventions initiate a transition to direct sourcing from smallholders. By buying directly from smallholder groups and registering their deliveries in a newly developed traceability system, supply chain players can substantially reduce their supply and reputational risks. At the same time, collecting information about a farmer group’s performance allows private and public investors to better target their investments. At the farmer’s end, increased traceability and performance tracking translates into more relevant training, improved access to finance and ultimately higher income levels.

Benefits and Outcomes

The focus of the IDH work stream is to support businesses in creating sustainable business links along the supply chain by developing and implementing a traceability approach, while providing a more secure income and better livelihoods for farmers.

By tracing the quantity and quality of cashew, and the conditions under which it is produced, this system enables benchmarking and focused training for farmers as well as making supply more secure for traders and roasters. With the combination of traceability (3S system) and targeted actions (co-funded through ACI match fund), the (sustainability) risks in the supply chain can be mitigated and addressed.

The benefits of this approach include:

  • Farm to fork (risk) management: transparency for the retailer on production and processing conditions
  • More efficient sourcing
  • Stronger processor–farmer relations
  • Data-driven supplier performance that allows monitoring of product quality and quantity at farmer or regional level
  • Customized support to farmer groups resulting in higher yields and better quality
  • Existing certification/verification schemes can be easily linked in 3S, improving access to finance for farmers and processors by using the data sets and performance of the suppliers 

Supported initiatives in Nuts

Resources
Title Type Year
Fresh & Ingredients brochure Factsheet 2016
Fresh & Ingredients infographic Factsheet 2016

Nuts production, processing and trade to be more sustainable by 2020