1. The African Cashew initiative (ACi)
ACi´s Sustainable Supply Chain Model
Rita Weidinger, Executive Director
World Cashew Convention, Dubai, 5 February 2015

2. Overview Africas role and its potential in a global cashew sector
What is the African Cashew initative (ACi)
ACi Success factors
ACi Achievements so far
The cashew way forward

3. Africa´s role and its potential in a global cashew sector

4. Consumption Production Processing
Keeping a balance between global supply and demand, Africa must increase current production level by 20% until 2019
Production
Africa produces about 45% of global cashew production
Processing
Less than 10% of African raw cashew production undergoes further processing in Africa
Consumption
More than 90% of global cashew is consumed outside Africa – the main consumers are North America, India and the EU.
Major consumers
Minor consumers
Major producers
Minor producers
Main producer India,
Production areas in India, Brazil, Vietnam go down, while cashew production and arable lands for cashew cultivation are increasing in west africa, also due to climate change.
The increase of local processing will have a positive impact on economic development. It creates jobs, especially for women. Higher expert earnings when the final product is exported opposed to the raw nut.
The global supply is reducing and demand is increasing – meaning higher prices if we do not increase cashew productivity. Africa must produce 30% more cashew nuts in order to meet the global demand
Global

5. The overview of cashew production shows that yields in Africa vary considerably
Est. Number of farmers
Thousands
Production volumes 2013/14 (MT)
Est. area planted
(000 ha)
Typical yield 3 (kg/ha)
Producer countries1
Cote d‘Ivoire
330
1.000
500
Guinea Bissau
1.000
245
550
Benin
200
213
400
Tanzania
90.000
250
300
300
Mozambique
90.000
1.000
325
250
Nigeria
70.000
n/a
175
400
Ghana
68.000 75 62
800
Burkina Faso
35.000 45
140
250
Senegal
30.000 60 57
350
Kenya
10.000 60 33
300
The Gambia
8.000 10 14
500
Countries in which ACi operates
Primary countries where cashews are grown
Typical benchmark yields are 1.2 tons/ha in India (Maharastra) or Vietnam (Binh Phuc Province)2, suggesting Africa’s yield gap is >500 kg/ha
1 There is some production in Sierra Leone, Liberia, Mali, and likely other African countries too, but no detailed data available
2 ISS based on reports from DCCD and Vinacas
3 Typical yields observed during the last 1-5 years, according to experts estimations.
Source: McKinsey analysis of report by ISS/Fitzpatrick; further ISS/Fitzpatrick updates

6. Climate change is expected to increase cashew’s importance as an income source in West-Africa
Current Situation in Côte d’Ivoire and Ghana 2
Suitability in 2050 in Côte d’Ivoire and Ghana 2
According to MAXENT, the current cashew growing areas in Ghana are located in the Guinea and Sudan savannah eco-zones, mainly in the following regions: Northern and Brong Ahafo region in Ghana and Zanzan, Valle du Bandama, Savanes, Worodougou and Denguele regions in Côte d'Ivoire .
Question Dana Bogess: “ This would be especially compelling if you could show that climate change is expected to make other crops harder to grow. Is there an expectation that farmers will have a higher dependence on cash crops such as cashew with food coming from elsewhere or just that the cash crop profile will change?”
Answer ACi: “A recent study which compiles the results of 16 published papers gives an overview of the sign, amplitude and uncertainty of CC impacts on food crops productivity (maize, millet, sorghum, soybean and cassava) in West Africa.  They found that the negative impacts of CC on crop productivity are more severe with more intense warming scenarios, with a medium yield loss near -15% for the moss intensive warming scenarios. This relationship between warming intensity and climate change impacts  highlights the positive effect climate change mitigation (e.g. buffer role of planted trees like cashew): mitigating global warming will result in less severe impacts.
Source: Roudier,P. et al., The impact of fucture climate change on West African crop yields : what does the recent literature say? Global Environ. Change (2011), doi: /j.gloenvcha
Climate change is expected to provide opportunity for cashew production to expand and replace other cash crops such as cocoa, as well as to “buffer” climate change effects on food crops
(food crops yield loss potentially -15% for most intensive warming scenarios).1
Green areas indicate best suitability for cashew
1Source: Roudier, P. et al., The impact of future climate change on West African crop yields : what does the recent literature say? Global Environ. Change (2011), doi: /j.gloenvcha
2Source: “Predicting the impact of climate change on cashew growing regions in Ghana and Ivory Coast”, International Center for Tropical Agriculture on behalf of BMGF, 2010.

7. Introduction to ACi

8. ACi tackles these challenges and transforms them into business opportunities for all actors along the value chain
Production
‘Increasing raw cashew nut production and quality’
Processing 
‘Increasing quantity and quality of African cashew kernel and cashew apple processing’
Supply Chain Linkages
‘Establish and expand sustainable links to the global market place’
Sector organization
 ‘Advocate policies that favor cashew production and processing’
ACi vision for 2016: farmers increase their family income

9. A Strategic Alliance of Private and Public Partners ensures sustainable and market-driven implementation of activities
Funding, Contributing and Implementing Partners (16)
Public
Private
CSO / NGO
Other partners (30+)
Matching Fund Partners (30+)
10+ National Research Institutions, Universities and Extension Organisation
10+ Buyers, Traders, Processors, Farmers Organisations
10+ National and International NGO’s

10. ACi works in five countries along the Cashew Value Chain: From Farm to Fork, A Win - Win Situation for all
Budget Size
$97 mio in total
$52 mio in cash
$45 mio in-kind
From farm to shelf for europe

11. ACi Success factors

12. 58 Master Trainers from 7 West-African countries
Success factor 1: Developing Local Capacities and multistakeholder Partnerships in the Cashew Sector
380,000+ farmers; 2,200+ trainers
58 Master Trainers from 7 West-African countries
5 countries policy advise , Regional networking, Conferences
Communication, based on data and facts.
Using ICT for Management Information Systems, tracebility, trainings, etc.

13. Good marketing position for farmers Traceability Good quality
Market Power Past
Market Power Future
Success Factor 2: Changing power relations in agricultural value chains provide high potential for a more inclusive business model
Good marketing position
for farmers
Traceability
Good quality
Cooperation/ joint initiatives
Bad marketing position for farmers
No traceability
No incentives for improvement
Bad quality
No cooperation/suspicion
Potential for increased value addition for farmer based organisations
Processors take increasing initiative
to link with
farmers
Producer
Processor
Buyer
In a market evolving toward supply driven model, there is potential for producers and their organizations to increase the value of production and trading functions.
Main benefit to all: Close market linkages reduce the transaction costs also for processors and buyers, eliminating ineffective trading and improving quality and market compliance.
trader
trader
Traders play a less significant role, although will not likely be eliminated entirely

14. Success factor 3: For sustainable inclusive business, processors and others must apply an incentive mechanism for farmers
Loyalty packages
Benefit to farmer
Knowledge/Training
Inputs
Community warehouse/decentralized cracking
Traceability
Pre-financing
Market information
Know how
quality and quantity; prices
Bulk sales;
Speculation
Increase price / income for farmers
Premium
Production;
Personal needs
Competition

15. Business Development Services for processing industry
Success factor 4: Increasing efficiency and viability for processing and farming by reducing costs, increasing ROI and in-country value
Advise for Financial Institutions, facilitating $12 mio + for processing
Business Development Services for processing industry
Sector analysis: e.g.
margin distributions, and
cost factors for development activities,
e.g. cost per ton processed; costs per farmer training.
ACi internal:
Key Cost indicators
Return on Investment

16. ACi Achievements so far

17. ACi shows visible and remarkable Achievements until today
380,000+ cashew farmers trained;
22% of them women
$120 million accumulated incomes
Plus $120 net income per farmer
Nearly 5,800 jobs created in new cashew processing industry
75% being women
$3.6 million accumulated wage
$620 annual max. wage per worker

18. ACi shows visible and remarkable achievements until today
20 processing facilities receive technical, financial and managerial assistance
These increased capacities from 8,150 MT in 2008 to 48,200 MT 2014.
Processing in Africa increased from 5 % to 10 %.
18 projects were established to facilitate linkages with farmers
10 new projects in 2015
Total investment of $15 million, reaching 200,000 farmers

19. The Way Forward

20. The Cashew Way Forward for Africa depends on….
… Which new actors are joining to build stronger linkages
… How fast will investors move into processing in Africa
… How innovations in processing equipment improve labour and capital efficiency
… How financial institutions and investors will be sharing risks, e.g. participating in equity
Farmers are well trained
Products meet international quality standards
Trustful linkages and relationship along the value chain are established
Great potential will within the cashew sector and beyond for other crops
… stays engaged

21. Thank you for your attention!
For more information, please visit: ACi Website ACi Facebook Page ACi on Youtube