Cashew Subsidy Voucher Pilot Impact Evaluation 2021-2022 Baseline and Endline Survey Rounds Mozambique

Despite strong and sustained economic growth over the last two decades, poverty in Mozambique has remained high, particularly in rural areas (Baez and Elabed, 2020). National economic growth has been in primarily capital-intensive and import dependent sectors, while rural poverty has remained entrenched, particularly in the agricultural zones of the Northern and Central provinces (Baez et al., 2018). 67% of Mozambicans live in rural areas (INE, 2017) and over 80% of the population derives its livelihood primarily from agricultural activities (Cunguara and Hanlon, 2010). However, the agriculture sector accounts for less than 32% of GDP (Suit and Choudhary, 2015). Increasing agricultural productivity and dynamism therefore appears to be a prerequisite for more inclusive economic growth. Demand for cashew nuts has been booming globally since 2010, with global trade increasing by 133?tween 2010 and 2018 (UNCTAD, 2021). This provides an opportunity for Mozambique to capture a growing global market and improve existing jobs, as well as creating new jobs at all stages of the cashew value chain.

Cashew is an important crop for farmers in Mozambique, with 1.3 million households growing cashew, 150,000 households being involved in the post-harvest industry, and a total of 6.5 million people deriving their livelihoods in part from cashew (Costa and Delgado, 2019). Cashew farming is an important source of income, with cashew production generating 53.6% of total household income (DIME, 2022). The cashew industry in Mozambique is centered around the production and primary processing of Raw Cashew Nut (RCN). Nampula and Zambézia provinces are the two most important areas for cashew production and processing, with 63% of total production and virtually all active processing factories situated in these two provinces. Although the production of cashew increased to an estimated 130,000 tons in 2018, Mozambique’s production remains below its previous production peak of 216,000 tons in 1972, when Mozambique was the world’s leading cashew exporter (Grob and Maceda, nd).

Cashew production in Mozambique is characterized by low yields (3 kg/tree on average) and a low quality of RCN (the kernel out-turn ratio of cashew is 44-45) com pared to other African countries such as Tanzania (kernel out-turn ratio of 50) and Cote d’Ivoire (kernel out-turn ratio of 48). In 2015, only 19 out of 40 million cashew trees were considered to be at a productive age, with a further 1 million trees estimated to become unproductive each year (Grob and Maceda, nd). The low yield and quality can be attributed to the high age of trees, inadequate production and harvesting practices, and the insufficient use of pesticides to protect trees against pests and diseases (Costa and Delgado, 2019). The Mozambique Nuts Institute (IAM) is tasked by the Ministry of Agriculture and Rural Development (MADER) to significantly boost production in the sector. The Government of Mozambique has prioritized revitalization of the cashew sector, aiming to significantly increase RCN production and regain its former strong position in the world market. One of the main policy responses in the sector has been the promotion of orchard rejuvenation through seedling planting and pesticide sprayings (Costa and Delgado, 2019). The correct application of pesticides is estimated to have the potential to increase yields from around 3 kg per tree to 10-15 kg per tree (Grob and Maceda, nd).