MACNUT Advocates for the Sustainability of the Macadamia Sector Amidst Challenges from Unprocessed Nut Exports

The MACNUT Association of Kenya wishes to address recent claims made by the Nut Traders Association of Kenya (NUTAK) regarding the Agriculture and Food Authority’s (AFA) decision to deny export licenses for raw macadamia nuts. While NUTAK raises concerns, it is essential to consider the broader implications of raw nut exports on local industries, farming communities, and the overall economy.

Kenya has established itself as the fourth-largest producer of macadamia nuts globally, with a 13% market share, translating to 7,750 tonnes on a processed kernel basis. The macadamia sector has become a crucial cash crop for foreign exchange earnings, significantly contributing to the country’s economic development, particularly in employment creation and enhancing farmer and household incomes. Approximately 200,000 smallholder farmers are involved in this sector, which has seen production increase from 11,000 tonnes of nut-in-shell (NIS) in 2009 to 45,000 tonnes in 2023. The AFA estimates that production could reach 63,000 tonnes NIS by 2027, representing a 40% increase from 2023 levels.

On November 2, 2024, the government made a strategic move to restore the ban on unprocessed nuts, recognizing that value-added and processed nuts provide more comprehensive benefits to the Kenyan economy. These benefits include job creation for youth, higher revenues for the country, and diversified markets in Africa, the USA, Europe, Asia, and the Middle East. In contrast, the export of nut-in-shell primarily benefits traders, resulting in limited job opportunities, lost revenues, and the exploitation of farmers.

The export of nut-in-shell is fraught with malpractices that undermine the integrity of the macadamia industry. Many traders engage in unethical practices, such as underreporting the volumes of nuts exported, which leads to significant revenue losses for the government and local farmers. Additionally, there are reports of traders colluding with unscrupulous farmers to bypass regulations, resulting in the sale of substandard or unripe nuts that do not meet international quality standards. This not only jeopardizes Kenya’s reputation in the global market but also diminishes the potential earnings for farmers who invest in quality production.

Furthermore, the environmental impact of exporting unprocessed nuts is alarming. The sheer number of trees that must be cut down to dry the unprocessed nuts poses a serious threat to our forests and biodiversity. This practice contributes to deforestation, which exacerbates climate change and disrupts local ecosystems. The long-term sustainability of the macadamia sector is at risk if these practices continue unchecked.

We laud the government and urge it to maintain the law that restricts exports of unprocessed macadamia nuts in their shells in order to assure the growth of the sector and protect local processing investments that over 35 companies have made for value addition. We urge the government, in alignment with its agenda on promoting manufacturing and local processing, to strongly maintain and enforce this law without being unduly pressured by parties that are not interested in supporting the growth and expansion of the sector.

In collaboration with the government, the MACNUT Association is actively working to roll out scaling up support for farmers by enhancing direct sourcing from them to reduce exploitation by unscrupulous brokers, provide training and capacity building on good agricultural practices and integrated pest management. Additionally, the plans will include scaling up the dissemination of high-yielding seedling varieties from South Africa and Australia and exploring credit financing options for farmers to address short-term cash challenges. These initiatives are designed to empower farmers, improve productivity, and ensure that they receive fair compensation for their produce.

Moreover, there is a growing concern regarding the illegal trading of millions of kilograms of unprocessed macadamia nuts. Reports indicate that smugglers are operating without licenses, rejecting thousands of tonnes while preparing to inject these nuts back into the supply chain. This ill-intentioned move poses a significant risk of adulterating raw materials when the buying season begins on March 1st, further threatening the integrity of our local industry.

The MACNUT Association of Kenya was established to promote the sustainable growth and development of the macadamia industry, aligning with the goals of the Bottom-Up Economic Transformation Agenda. We are actively working with processors and farmers to enhance production and quality standards, expand markets, and position Kenya as a key origin of high-quality macadamia kernels and value-added products.

We urge the government to maintain its policy on raw macadamia exports to protect local processing industries. This action is vital for ensuring the long-term sustainability of the sector, safeguarding jobs, and maintaining Kenya’s competitive edge in the global market. If the ban is upheld, the processing and export of value-added macadamia nuts could contribute over USD 80 million (more than KES 10 billion) to the Kenyan economy, create 30,000 jobs for young men and women, and sustain over 200,000 households.

While MACNUT acknowledges NUTAK’s concerns, a holistic approach is necessary to protect farmers, processors, and the national economy. The future of Kenya’s macadamia industry hinges on local value addition, which is critical for its growth and prosperity.

We look forward to engaging in constructive dialogue with the government to address these pressing issues and ensure a sustainable future for the macadamia sector in Kenya.

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