Cashew nut Business Performance and Smallholders‘ Farmers Welfare: Exploring the Nexus in Southern Regions of Tanzania

Abstract

Despite a significant increase in foreign exchange earnings from cashew nut exports in Tanzania over the past ten years, it remains unclear whether smallholder farmers have benefited from participating in the cashew nut business. This study bridges the research gap by assessing the impact of cashew nut business performance on smallholder farmers’ welfare in Mtwara and Lindi regions. A quasi-experimental design using cross-sectional data was employed, involving 384 respondents, 128 cashew nut farmers and 256 non-participants. Data were collected through structured questionnaires and Focus Group Discussions (FGDs), and analysed using Propensity Score Matching (PSM) and content analysis.The findings show that participation in the cashew nut business had a statistically significant positive impact on farmers’ welfare (t-value > 2). Participants reported higher food expenditure (TZS 58,687–58,829), non-food expenditure (TZS 52,312–55,385), income (TZS 1,763,592–1,786,650), and annual savings (TZS 697,232–701,714). They also owned more consumer durables, valued between TZS 13.9- TZS 14 million. As the study confirms the positive impact of cashew nut business on farmers’ welfare, local governments should encourage non-members to engage in the sector through sensitisation on its benefits. The Cashew Nut Board of Tanzania should continue regulating and promoting the quality, marketing, and export of both raw and processed cashew nuts. The central government should strengthen trade regimes and institutions that enhance positive and mitigate negative trade impacts on sustainable development. Lastly, smallholder farmers should improve their socioeconomic status through capacity-building programmes and adopt sustainable farming practices.