<p></p><p>The Bank of Tanzania has set aside Tsk29 billion (US$18.3 million) loan to purchase cashew-nuts 'stranded' in warehouses across Tanzania. According to Tanzania's Prime Minister, Mizengo Pinda, the central bank loan will be directed to small holder cashew-nut farmers, who have not been paid after selling produce to their cooperatives.</p> <p>"The central bank loan is a government effort to help farmer's cooperatives to pay arrears of their members. The money will mostly be directed to cashew-nut farmers in Mtwara and Lindi, in the southern part of Tanzania," Pinda said. Besides payment Pinda said the price fluctuations was another challenge facing farmers. </p><p>He urged cashew-nut farmers through their cooperative unions to form a special board which will be responsible for overseeing all issues related to price fluctuation of their produce. In 2011/12 harvesting season, Tanzania produced 157,000 tons of cashew-nut, however, due to lack of buyers, only 72,000 tones were sold leaving 85,000 in warehouses. Some of the cooperative unions owe small scale cashew-nut farmers about Tsk64.7 billion (US$40.9 million) after receiving the produce. </p><p>The acting director general of the Cashew-nut Board of Tanzania, Mr Ayubu Mbawa said the central bank loan will include 30% payment balance to farmers who initialled received 70%. He added that the outstanding Tsk51.2 billion (US$ 32.3 million) which is 30% balance of the second payment have been paid but about Tsk13.2 billion (US$8.3 million) remains. </p><p>"Due to this, the government through the central bank decided to pay the cooperative unions under the scheme called Export Credit Guarantee," he said. Farmers sell the cashew-nut to their cooperatives at a cost of Tsk1,200 (US$0.76) per kg while traders bought from the cooperatives at a cost of Tsk1,700 (US$1.10) a kg, said Mbawa. He noted that buyers were offering a lower price citing reduced prices on the world market.<br></p><p></p>