Cashews: When Opportunity Strikes

My all time favourite political show is Power & Politics with Rosemary Barton on CBC. I’ve been watching the show, on and off, for the past ten years all the way back to a time when Power & Politics was just called “Politics” and Don Newman was the host and Rosie was an up and coming, scrapper, of a political journalist. Don would open the show with his famous “Welcome to the Broadcast” line. His last show prior to his retirement was full of sniffles and awes as he told Rosie that her success in being a journalist relied on her “just being herself.” Well, Don was right, eventually. It was just pure silly oversight on Don’s part, but he forgot about gender inequities in the workplace. First, Evan Soloman took over Don’s job despite the fact that I’m pretty sure he didn’t do much political reporting prior to (think Sunday morning show host) and from one puff interview after another I stopped watching. Then Evan Soloman decided to partake in a few improprieties using his CBC job to sell some expensive artwork to some fancy people, and BOOM it was Rosie’s time to shine. Well, not quite yet. The CBC named Rosie the temporary host of Power & Politics, because we all know ladies we need to earn our way. It was only after a truly slaying interview with Conservative MP Chris Alexander on the Conservatives inaction on the Syrian Refugee Crisis that Rosemary finally proved her chops to the CBC brass and got the job! Since then, Rosie has solidified herself as “my type of oprah” weaving good-hearted fun with hard-hitting interviews. It’s certainly the best way to consume Canadian Politics.

So, there I was, last week watching my favourite political show. Rosie was interviewing a fella by the name of Dominic Barton (no relation) who is on the government’s Advisory Council on Economic Growth. By the sounds of it, it’s a group of people in suits, pretty sure the suits part is a requirement, and they brainstorm ways the federal government can improve the economic growth of the country. Pretty dry stuff. Indeed! The main substance of the interview was how does the Trump administration affect a trade dependent country like Canada, and Dominic’s response was two-fold–it’s a challenge and it’s an opportunity. Dominic believes that the challenges the Trump administration poses could, in a way, jolt the Canadian economy to a new level of growth. As the USA is pulling in on itself, we can take advantage of their absence and build new relationships with other countries and enter a new era of Canadian economic wealth. Sounds divine, in a twisted sort of way, to take advantage of what is essentially a horrible and chaotic situation for our neighbours to the south. Yet, to think that the Canadian government and Canadian companies wouldn’t try to make the most out of a bad situation would be a bit naive. Case in Point. At the end of January, a group of Canadian tech companies sent an open letter to the Canadian Government to ask for an “immediate and targeted visa” to those people affected by the United State’s Muslim Ban. Was it a political stand against government overreach and Islamophobia? Or, were they ceasing the opportunity to recruit top talent to their companies. The later, maybe, yes, definitely. Which brings us to this week’s episode, as we delve into the cashew industry and look at a few countries taking advantage of a bad situation. This week’s episode is Cashews: When Opportunity Strikes.

First off, before we continue, I would like you do something. If you wouldn’t mind, bring up your internet browser and search Cashew Apple.
Photo Credit: Greenthaicurry.com Flickr via Compfight cc
Do you see what I’m seeing? I have a feeling the last time you were eating a bowl of roasted cashews you didn’t have this in mind. It looks like an apple is midway through a bowel movement, and it reminds me that, at some point, I really need to get down to the equator so I can try this cashew apple out. If you are not too sure what you are looking at, the cashew nut is what is hanging below the apple and is technically the seed of the cashew apple. If you are wondering why you’ve never heard of a cashew apple before, well it’s because it doesn’t transport well, so, unfortunately we cannot try it’s sweet juiciness up here in Canada. However, as for the nut after it’s shelled and roasted it is exported in droves. It’s popularity has been growing faster than any other nut, yes even almonds, so much so that demand has jumped by 53% since 2010. All you have to do is enter a vegan restaurant to understand why: cashew cheese, cashew butter, cashew ice cream, cashew milk. Cashews have to be one of the most versatile nuts, and as plant based diets become more popular so does the nut. This popularity presents an opportunity, especially when things go awry.

Vietnam is the largest exporter of Cashews by far. It exports approximately 58% of cashews grown in the world today.. It’s important to note that Vietnam is not the largest grower, just the largest exporter. In fact two thirds of the cashews that Vietnam processes is grown somewhere else.  I find the cashew trade pretty insightful. It gives a glimpse into the dynamics between countries. Why some countries can make more money producing the same product compared to others. In a nutshell, here’s how the bulk of the cashew trade works. Cashews are grown in various countries in West and East of Africa. Most of the cashews grown in Africa are shipped, raw, to India and Vietnam. India and Vietnam then process the cashews from Africa as well as process cashews they grow themselves and then they export the roasted cashews to the rest of the world. It’s why my current bag of cashews states it’s origin as Vietnam / Ivory Coast. The fact that cashews are being sent from African countries to Vietnam and India to be processed implies that these countries don’t have the infrastructure to process their own cashews. This lack of infrastructure also means that they are not getting the full value out of their product. They’re missing out on money. Enter into this reality a drought. What? Another drought you say. So, while cashews are being sent from Africa to Vietnam and the whole world keeps on gobbling them up, Vietnam goes through one of their worst droughts in a century. Drought in the Mekong Delta forces Vietnam to lower exports on many agricultural goods: rice, black pepper, coffee, and seafood. And this past year, Vietnam’s cashew harvest fell by 11% forcing the price of cashews up to an all time high. Now we have a very valuable product and an opportunity.

For the Cashew farmers of the Ivory Coast when they look at their plantations they see money growing on trees. It appears to be a running theme in the food industry today, but with increase demand in China, changing food habits in Europe and North America, and environmental stresses around the world, food is becoming more valuable. Ivory Coast farmers can make more money on cashews than any other crop. Yet, it’s not the amount of money the Ivory Coast is making off of cashews that is on the top of their mind, but how much money they are not making. Countries, like the Ivory Coast, Burkina Faso, Zambia, Nigeria, and Tanzania are a part of a group of African countries who are intent on shaking up the cashew trade. Although there are some farmers and exporters that are doing well, the number of people benefiting from cashews is relatively small and these countries intend to change that. They hope that if they expand their cashew production and create substantial investment in infrastructure that they can grab a bigger piece of the cashew pie and in turn create more economic opportunities for their people.  In 2014, it was reported that Tanzania lost around $551 million over a five year span simply because they exported raw cashews over processed ones. To these countries this is millions of dollars that they are just throwing away.  

However, it isn’t an easy process to build an infrastructure. If all of the factors were in place to have a thriving processing industry then that industry would already be there. Instead one must look at the obstacles in place. For, Burkina Faso, they must educate farmers so that they can improve growing techniques and increase their yield. They need to better integrate and professionalize all the different players that are currently in the industry. They need to improve financing, so that farmers and processors can have access to credit. Smallholder farmers need to group together and have national representation, so that farmers and not agribusinesses are reaping the rewards. Depending on the area, in Burkina Faso cashew production is the main avenue to reduce poverty. For many, cashews are providing an opportunity that they cannot let slip out of their hands. The question is whether fundamental reforms can come together before Vietnam recovers and the opportunity is gone.          

 

Coconuts For You

 

Coconut farmers don’t make a lot of money. In fact on average they make so little that I really should stop complaining about how much I make. Approximately 60% of small-scale coconut farmers live in poverty. They make anywhere between $70 to $7000 per year. Let’s say that again. They make anywhere between $70 to $7000 per year.  Poverty cannot be easily explained and definitely not easily solved, but to be sure the system that coconut farmers find themselves in takes advantage of that poverty. In order to better understand poverty’s reign we must take a closer look at the conditions that support its existence.

The Philippines is the second largest producer of coconuts in the world, accounting for 26% of the world’s production. Indonesia is number one. Most coconut farmers in the Philippines do not own their own land. They are tenant farmers, and their landlords tend to be teachers, managers, military officers, and other professionals, and for the most part these landlords are absent. The fact that most coconut farmers do not own their own land already places them at a disadvantage. First, most farmers are under agreement with their landlords to share in the profit. These types of agreements can vary from reasonable to outright exploitative. Second, because the farmers don’t own their own land that means that they have little to no assets or equity. Therefore, unlike most farmers in Canada, Filipino Coconut Farmers cannot use typical financial mechanisms, for instance, lines of credit, to reinvest in their farms and improve their profitability. Third, their reality limits their power in decision making and negotiations. Coconut Farmers usually have no say in investments in their industry or national programmes.

The plight of these farmers really came to light after Typhon Haiyan damaged or destroyed more than 33 million coconut trees in the Philippines in 2013. Coconut farmers were stuck in limbo as there was no communication or agreement with the landlords concerning who would cover the costs of the clean-up. They did not have the necessary equipment to clean up the damage themselves if they wanted to, and they were without any source of income or food. Quickly following the typhon international agencies urged the Filipino government to make wide-sweeping reforms in order to improve the situation, and one of these reforms had to do with a decades long battle between the government and the coconut farmers, and it also highlights probably the main reason poverty can be so entrenched. And that reason is corruption.

   In 1971, the Filipino government enacted a law to establish the Coconut Investment Fund. A fund that was created to invest in the development of the coconut industry. Guess where they were going to get the money for this fund? Well, they were going to tax the coconut farmers. Not surprisingly at all, the money that was taken from the coconut farmers over a decade did not go into building up the industry, instead the President and his friends personally profited when they used the fund to buy a bank and other corporations in which the President and his friends held a majority stake. The issue is still ongoing today, with the farmers fighting for a share in the investments that was made with their money. There is currently $1.3 billion in the coconut levy fund.

The impoverished reality of coconut farmers cannot be more starkly contrasted to the seemingly overwhelming success of today’s coconut industry. There is not just coconut oil, but there is cold-pressed, raw coconut oil. There is coconut flour, coconut meat, coconut chips, coconut ice cream, coconut creamer, coconut milk, coconut hand wash, coconut shampoo, oh and let’s not forget…coconut water. There are so many coconut products out there that at one time I opened up my fridge, turned to my husband and said, “I think we are slowly turning into coconuts.” As well, these coconut products are not cheap. So, there is obviously money being made, but if not the farmers than who is making the money. Unfortunately, due to decades of corruption, an archaic land ownership system, and remote geography the farmers have little power and are at the whim of the middleman, and it’s the middleman and the corporations near the end of the coconut food and beverage chain that are rolling in the dough. The middlemen purchase coconuts from coconut farmers for approximately 10 to 20 cents per coconut. So, in one year a coconut farmer can expect to make about $17.00 per coconut tree. The middleman then raises the price by 50% and sells the coconuts to factories for processing. It’s in the processing where what the industry calls “value added” products are made. Value added basically means you are creating value out of something that previously had no value or little value and coconut water is the ultimate value added product. You see, just because you buy coconut water does not mean that demand for coconuts rise and the prices of whole coconuts go up. The reason we in North America and Europe can even drink coconut water today is because of advancements in technology which preserved coconut water for storage and shipping. Prior to these advancements coconut water was just thrown out. So, basically because these companies created value out of nothing all profits from coconut water goes to the beverage and food corporations and none goes to the farmers. Then you wonder, well at the very least who are these corporations? Well, the top three coconut water brands are Vita Coco, Zico, and O.N.E Coconut water. Vita Coco is owned by Dr. Pepper Snapple Group, Zico is owned by Coca-Cola, and O.N.E is owned by Pepsi Cola.

Wrapped up in this messy chain of food, poverty, corruption, and multi-national corporations is you. Why did I buy that expensive coconut water in the first place? Well, because I was told it was good for me. In fact, coconut water contains 97% water and only 3% nutrients. Sure, it’s good for me, but I could also just drink some water and eat a banana. Coconut water is health marketing at its finest, and we get so carried away with being healthy, that when it comes to buying products we forget about the all too important Fair Trade label. You know that little label that tells us that the farmers are getting an okay deal, yeah that one. So, the next time you browse the long line of coconut products keep your  cynicism in good working order and don’t let the pristine labels and nice sounding words trump a simple label that tells you that what you are getting is a fair deal.