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(Instituto Nacional do Caju, or INCAJU) was given autonomy, and privatization of the formerly nationalized processing factories was initiated. The nationalized factories were privatized by 1994, and new factories were built, also mostly using capital-intensive techniques. Starting in 1991–92, limited quantities of raw nuts were allowed to be exported, but producers were required to sell their raw cashews first to processors. A tax was imposed on the difference between the export free on board (f.o.b.) price and the factory gate price to minimize the reselling of raw cashews by processors rather than processing them.6 At first, this tax was 60 percent, but it was lowered to 35 percent in 1992/93. These tentative steps were followed by a large policy shift in 1994, in which quantitative restrictions on exports were removed.7 At the same time, in order to maintain some sort of protection for the domestic processing sector, the government introduced a graduated export tax equivalent to about 30 to 32 percent of the f.o.b. export value. This reform program was in line with that being implemented by the government for the general economy. The World Bank, along with other donors and groups in Mozambique, tried to accelerate liberalization of cashew marketing as a part of the more general agricultural pricing and marketing reforms undertaken after 1989.8 This occurred just after the end of the civil war, as many farmers returned to their fields. Along with resettlement support, it was hoped that increasing the price of cashews, which was among the few cash crops available to smallholders, would also facilitate a return to normal agricultural practices. In the 1995 Country Assistance Strategy (CAS) Report, the World Bank called on Mozambique to further liberalize cashew marketing and exporting in order to satisfy “base case” conditions and qualify for approximately US$400 million of loan assistance (World Bank 1995a). Although accepting the need for liberalization, the government and industry leaders disagreed with the World Bank regarding the extent of and timeframe for liberalization. The government proposed a 10-year time horizon for eliminating the tax, which the World Bank found unacceptable; a five-year time horizon was finally agreed upon by the World Bank and the government. The new tariff plan consisted of an export tax (on f.o.b. value) of 20 percent on the export of raw cashews in the first year, 1995/96 (from 35 percent during 1994/95), and a phased elimination in five years (that is, by 1999–2000). After the first year, the plan was never implemented in its entirety. The new policy met with intense opposition from leaders of the processing industry who had withstood the war years in Mozambique