We have mentioned earlier on Asia Perspectives that expansion of exports is crucial to the growth of the Bangladeshi economy (it is not a platitude), and previously our short term focus was on expanding readymade garments (RMG). In the long term, the expansion of exports in frozen food should be considered as a priority. In this paper, we look into one such area of food export, the export of cashew nuts.
While the coconut and peanut are ahead of it in terms of world production, the cashew continues to be world’s most sought after nut. As of 2013, world production was 4.4 million tons and increasing. A strong demand, especially in Western countries, has fuelled a cashew boom that has revitalized several countries in Asia and Africa.
Yet, to our knowledge, Bangladesh has not looked into the production of cashew nuts in any serious fashion. This is sadly true for both the government and private industry. Our initial search did not find any worthwhile source indicating that Bangladesh has any cashew plantation or that it processes cashew nuts in substantial amounts. There seems to be one business organization, Mega Group of Chittagong, who claim that they have a plantation in the Chittagong Hill Tracts with very limited production. The Krishi Gobesona Foundation of Dhaka (a Bangladesh government-sponsored NGO) indicated in a 2010 paper that production of cashew crop has significant growth possibility in Bangladesh.
In contrast, when one looks at neighbouring India, it is amazing to find the level of development of the cashew industry. Albeit, Portuguese colonials brought cashew plantations to India more than two hundred years ago. Indians consume cashews in the form of nuts and liquor and have exported cashew nuts for decades. On the other hand, the cashew as an agricultural crop has not been established in Bangladesh despite agronomists finding no reason why it should not grow in Bangladesh. Similar soil and weather conditions in the Indian states of Andhra Pradesh and Odisha have been growing cashews for at least a century. Another not-too-distant country of Bangladesh, Vietnam, started its production of cashews in 1988 and has emerged as the one of the main producers of the nut in the world. In 2013, it ranked as the largest producers globally with more than 25 percent of the total world production of approximately 4.5 million metric tons.
We consider that it is of utmost importance for the Bangladesh government to actively move into assisting the farmers, processors and traders of cashews with a target of producing 80,000 metric tons by 2021, similar to the way Vietnam moved into this industry in the ‘80s. This will provide increased income to Bangladeshi farmers, employment in the processing sector and expand trade opportunities. While human rights abuses have been reported in Vietnam in the cashew industries, we consider that potential women’s employment could lead to women’s empowerment, as seen in the RMG sector. The cashew industry is significantly different from RMG. A number of RMG manufacturers in Dhaka have mentioned to this author that it is fostered almost completely by the entrepreneurship and hard work of private industry. For cashews, the government needs to be actively involved. Without active participation of government agricultural departments, local governments, research organizations and universities, cashew production cannot take off. The support of private investors is also important for processing and export. The involvement of NGOs may also make the industry grow faster. In fact, cooperatives and cashew production councils have made significant progress in India. NGOs have made great strides in Bangladesh in the banking, telecom, education and health sectors. The author is not aware of the involvement of NGOs in cash crop business.
On consultation with various agronomic and regional development experts, we consider that the initial thrust in the cultivation of cashew crops should be given in the Chittagong Division and later expanded to other areas. According to statistics prepared by the World Bank and Bangladesh Bureau of Statistics (BBS), Chittagong Division has areas below the poverty line in the same proportion as other divisions of Bangladesh (median of the overall prosperity or poverty). Whereas, Dhaka Division is more prosperous than the other divisions in Bangladesh. One may question why areas of extreme poverty are not recommended. While we have not done any extensive soil analysis of Bangladesh, experts consider that Chittagong Division, and particularly the Chittagong Hill Tracts, may be useful from a soil erosion perspective as well. In any case, most consider that this development will be a win-win situation for trade and employment.
Our subsequent posts will relate to, (a) processing stages of cashew with maximizing the potential of the crop, (b) determining market potential and marketing strategies, (c) capital inputs and estimated costs for small operators, (d) employment with gender considerations, (e) project planning with estimated costs and projected profitability with guidelines for calculating internal rate of return, and (f) suggested steps for reaching the 2021 target for the Bangladeshi government with assistance from the Bangladesh Cashew Alliance.
In future posts, we will also look into two other nuts, the coconut and peanut. These are, however, quite different from the cashew nut industry. Bangladesh has been a producer of these nuts for a long time, but the farming, processing and trading have major deficiencies. In other words, peanuts and coconuts in Bangladesh are in a mess. According to FAOSTAT, Bangladesh produced approximately 51 thousand metric tons of peanuts and 81 thousand metric tons of coconuts in 2013, compared to 9.5 million metric ton peanuts and 12 million metric tons of coconut by neighbouring India. Even considering that India is 19 times bigger than Bangladesh in its agricultural land, Bangladesh is significantly lagging behind. The reason why we will separate these topics is that the cashew is almost new to Bangladesh, whereas both the peanut and coconut industries already exist. It has been seen in the past and in other countries that the development of a new industry is easier than improving an existing industry.