Smallholders continued to be the backbone of the expanding industry. One survey conducted in the mid-1960s found that 71% of cashew farmers had total holdings of less than four acres, with the majority of farmers owning less than fifty trees."<sup>4</sup> In the survey area (e.g. Lulindi in Masasi District) approximately 25% of the total land area was covered by mature cashew trees, with cashews accounting for 78% of the total cash income of the farmers. At this time, efforts were also made to expand cashew production in the Tanga Region along the coast in order to replace cotton cultivation. The official agricultural staff provided seedlings and technical assistance for this effort."5 By 1972, the Agricultural Census reported national cashew plantings of 200,000 hectares, of which 139,000 hectares were monocrop and 61,000 hectares were intercropped with one or more crops.

During this period, a further attempt was made to develop a cashew processing capacity in order to increase value-added and to reduce the dependency of the industry on a single market-that of India for raw nuts. A government-sponsored study conducted in 1962 argued that uncertainties regarding the availability of labor in the south and shortages of skilled labor would prevent Tanzania from following the Indian model of manual cashew processing. The study recommended that the country move toward mechanical processing.'6 In 1965, an Italian company, Oltremare S.A. set up Tanzania's first mechanized cashew nut factory in Dar es Salaam with a 9000 ton raw nut capacity (ater upgraded to 12,500 tons)."<sup>7</sup> While the factory did begin to operate, its kernel exports were not profitable due to the generally low quality of raw nuts found in the DSM Reg. nn. The factory's non-profitability also stemmed from its comparatively poor yield of kernal material per ton of raw nuts. In 1968, a second mechanized factory was set up in Mtwara by a Japanese company (Cashco). The factory had a 8000 ton capacity, although equipment breakdowns and power shortages prevented it from operating for several years. By 1973, still less than 10% of the cashew crop was processed locally, with raw nut exports remaining the dominan **t** rade.

# Industrialization and Production Decline (1974 - 1985)

In 1973, the Cashew Authority of Tanzania was created in order to promote the expansion and wider development of the cashew nut industry. CATA would take over the crop buying functions of the NAPB and by-pass the former exporters by selling the crop to foreign buyers on a tender basis. CATA's mandate was much broader however, with plans outlined for the establishment of a cashew extension and grading service, the development of a cashew research program, an investment in a port storage facility for CSNL exports, and for further investments in large-scale cashew processing facilities. With the cooperative unions being phased out over the 1974-76 period, CATA would procure the crop directly from village societies and influence the determination of official, pan-territorial producer prices. 2 In 1974, one of CATA's main objectives was pursued with the initiation of a World Bank-funded project to construct five cashew processing factories with a total capacity of 36,400. The factories, to be located in each of the main towns in Mtwara and Lindi Regions, were to contain 'state-of-the-art' (Oltremere) equipment for mechanical processing. While factory construction proceeded satisfactorily, 14TTsaris (1967).

**'s** Ministry of Agriculture, Annual Report 1966.

' Tanganyika Industrial Development (1962), p. 44-52.

7 This was by far the largest cashew processing factory in the world at that time.

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