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Research theme: Small-scale Producers and Local Economies

Liberalisation, Gender, and Livelihoods:

the cashew nut case in Mozambique and India

Project Dates / Duration:
Mozambique case study: Jan 2002 - June 2004; Follow-up Study 2005

India case study: November 2002 - December 2003 (first phase); April 2004 - December 2005 (second Phase).

Reports available

Introduction:

Globalisation processes and economic liberalisation are leading to fundamental changes in the livelihood sources and strategies of different groups all over the world. IIED, in collaboration with partners in Mozambique and South India, has developed a research programme on gender, markets and livelihoods in the context of globalisation. The programme responds to a policy concern that more empirical work is needed to understand the effects of economic liberalisation on poverty reduction and gender equality.

The research to date has focused on the cashew sectors in Mozambique and India. India is the world’s largest exporter of processed cashew nuts and also the biggest buyer of Mozambican raw nuts. There is a growing market for cashew nuts in Europe and the USA, with new markets opening up in other parts of the world, for example, Russia and Japan. Cashew provides an important source of income and food security for smallholder producers and for low-income groups, particularly women, who work in the processing sector in both Mozambique and India.

Objectives:

• Map changes which have taken place in cashew production and processing relating to liberalisation policies in both countries
• Examine the effects of changes on the livelihoods, employment and labour conditions of cashew producers and workers, giving voice to their own views
• Identify initiatives which could enhance the livelihoods of disadvantaged groups

Another main objective of the Mozambique case study is capacity building of local researchers.

Key findings:

Mozambique

The study carried out in the North and South of the country has now been completed. Results and recommendations were discussed at a workshop with key actors in Maputo in November 2003. Dissemination through action-oriented workshops in the two study provinces were carried out in May 2004, where representatives working in the cashew sector attended from government, NGOs, private firms and grassroot organisations. The Workshop events were highly received and seen as a beneficial way of stimulating discussion of the findings and recommendations analysing the implications for the work of different organisations and providing an opportunity to promote better coordination between the production, processing and marketing in the cashew sector. View the various reports in English and Portuguese...

The key findings of the study include:

• Liberalisation has resulted in changes in the forms of production, processing and marketing of cashew. Gains to small farmers and workers in the processing industry have been disappointing. Women, in particular, have lost jobs in processing and most workers who lost jobs have not found comparable sources of cash income. It is very difficult to live on agriculture alone.

• Women have a key role in cashew cultivation but this has to be better recognised by organisations working to increase production. A focus on chemical treatments for diseases affecting cashew trees has been ineffective for small farmers. More integrated approaches which differentiate between different groups of farmers are necessary. Nevertheless, cashew continues to have an important place in the livelihood strategies of small farmers and traders and is used creatively for social and economic ends.

• Some new smaller scale factories provide better wages and conditions than others and such better practice needs to be scaled up. Informal processing has increased in the south with women playing a central role.

• International markets for cashew nuts are characterised by competition, falling prices and a concentration of power with buyers and retailers in Europe and the US. Local and regional markets -where women are active and stand to gain more directly - need to be a focus of policy, as well as global markets.

Partnerships in Cashew Processing

During the research we identified an innovative government-private sector-NGO “partnership” in cashew nut processing in Nampula province. The project was designed to expand rural employment by setting up cashew processing ‘satellites’ around existing factories, which would do the labour intensive part of primary processing and leave the grading and packing to the factory. A follow-up visit was made in May 2005 to analyse this ongoing programme.

The programme offers at least four key lessons for NGOs involved in supporting small scale agro-processing enterprises:

• Firstly, NGOs seeking to enhance entrepreneurship have to understand the potential for collective efficiency which the enterprises have in practice, taking full account of the social and cultural context. In this case, an important component for the sustainability of the processing satellites has to be the building and maintenance of independent relationships and trust between the owners of the processing satellites, otherwise the competitive pressures of globalisation can easily undermine collective efforts.

• Secondly, learning and flexibility is essential to successful business in a dynamic context where global markets change rapidly. Cashew markets have not been and are unlikely to be stable. Spotting when things are not working is important, in order to cut losses as early as possible and consider alternative products.

• Thirdly, although niche markets such as fair trade are important in themselves, supportive public policies for small and medium enterprises are critical if such businesses are to thrive. Alternatively, large companies will use their capital, economies of scale and bargaining power with government to negotiate terms which even medium sized processors will find it hard to compete with.

• Finally, government has to show a commitment to the development of small job-creating rural enterprises by clear and consistent policies in their favour – and one of the key issues in many contexts is the provision of low-interest credit.

India

This research project, in two phases, was completed in December 2005.  Findings include:

• India's share of the international cashew market has been reduced over time through the entry of other countries, most recently Vietnam. International prices of raw cashew and processed kernels are volatile and the terms of trade are deteriorating. At the same time, quality requirements and standards are increasingly applied to suppliers.
  
• While cashew producers in the south increasingly compete, market share has consolidated among a few retailers (supermarkets), roaster/salter companies and importers in the north. In the UK, supermarkets act as gatekeepers to consumers, and have tremendous power to determine price, quality, delivery, and indirectly - labour conditions, for suppliers and producers in the chain.
  
• Given the buyer-driven pressures in the supply chain, processors and exporters transfer the burden of competition to the workers (and to farmers). Cashew processing activities have shifted from factory to non-factory or 'cottage' and commission-based processing. Labour standards and working conditions are deteriorating, particularly for women, who represent the overwhelming majority of workers.
  
• Our survey of women cashew workers shows clearly that such work, while essential for survival, does not provide enough income to raise households out of poverty.
  
• There is a notable absence of an active role by government (national and state level) to implement existing labour laws or even to design policies which would allow the Indian industry to maintain its global position and competitiveness in the future.
  
• Action at a national level to promote workers’ rights is complex and should not restrict the livelihood opportunities of the poorest workers through intentional or unintentional protectionism nor raise labour costs to a point where competitiveness is reduced and jobs may be lost - to the detriment of livelihood opportunities for people with few choices. Until such policies which regulate entire global value chains are seriously explored, the cashew chain is going to remain a clear example of the way in which the international trading system fails to improve the livelihoods of disadvantaged groups.

Key Publications:

The reports of the Mozambique study and the Summary Report are available in English and Portuguese.  The follow-up study of Partnerships in Cashew Processing is available in English.

The report of the first phase and the final report of the India research are now available. See below for the relevant link (English only).

Liberalisation, Gender, and Livelihoods: the cashew nut case, Working Paper 1: Mozambique Phase 1- The North January - December 2002
Carin Vijfhuizen, Carla Braga, Luis Artur and Nazneen Kanji, February 2003
View PDF

Liberalisation, Gender, and Livelihoods: the cashew nut case, Working Paper 2: Mozambique Phase 2- The South January - December 2003
Carin Vijfhuizen, Luis Artur, Nazneen Kanji and Carla Braga, November 2003
View PDF

Liberalisation, Gender, and Livelihoods: the cashew nut case, Working Paper 3: India Phase 1 - Revisiting the Cashew Industry

Mridul Eapen, J. Jeyaranjan, K.N. Harilal, Padmini Swaminathan and Nazneen Kanji, December 2003

View PDF

Liberalisation, Gender, and Livelihoods: The Mozambique Cashew Nut Case: Summary Report

Nazneen Kanji, Carin Vijfhuizen, Luis Artur and Carla Braga

View PDF

Liberalisation, Gender, and Livelihoods: The Mozambique Cashew Nut Case: Workshops Report

Carin Vijfhuizen, Luis Artur and Nazneen Kanji

English
Portuguese

Appendices in Portuguese:

Gaza Province (South) Workshop Agenda

Nampula Province (North) Workshop Agenda

List of Participants to Workshops

NEW! Satellites and Subsidies: Learning from Experience in Cashew Processing in Northern Mozambique - November 2005

Luis Artur and Nazneen Kanji

View PDF (335KB)

NEW! Power in Global Value Chains: Implications for employment and livelihoods in the cashew nut industry in India

K.N.Harilal,Nazneen Kanji,J.Jeyaranjan, Mridul Eapen and Padmini Swaminathan

View PDF

Links to partners:

Mozambique: Faculty of Agronomy and Forestry, Faculty of Arts, University of Eduardo Mondlane, Maputo.

South India: Centre for Development Studies, Trivandrum, Kerala and Madras Institute for Development Studies, Chennai.

Project supported by:

• Netherlands Embassy and Irish Embassy, both in Mozambique
• Ford Foundation, India
• Swiss Agency for Development and Corporation (SDC)

Contact:

Nazneen Kanji, IIED (UK)
nazneen.kanji@iied.org

Luis Artur, University Eduardo Mondlane (Mozambique)
Luisartur@agronomia.uem.mz

K. N. Harilal, Centre for Development Studies (India)

harilal@cds.ac.in

Mridul Eapen, Centre for Development Studies (India)

mridul@cds.ac.in

Padmini Swaminathan, Madras Institute for Development Studies (India)

padminis@mids.ac.uk

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