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Cashew Producers’ Pain Is Intermediaries’ Gain in Senegal

ZIGUINCHOR, Senegal, May 3 2012 (IPS) - Cashew nut growers in the southern Senegalese region of Casamance are complaining bitterly that intermediaries are cutting them out of a fair share of the profits.

The Casamance region produced 40 million dollars worth of cashews in 2011 – 40,000 tonnes – and employed more than 220,000 people, according to figures from the Chamber of Commerce in Ziguinchor, the regional capital.

But as of April this year, production stood at only 8,000 tonnes, more than 15,000 tonnes less than at the same point last year, says Ismaëla Diémé, the president of the Casamance Agricultural Producers’ Cooperative. The sharp drop has been attributed to unfavourable growing conditions, a decrease in rainfall, conflict in Casamance – where anti-personnel mines have been laid on farms – and producers discouraged by low prices.

Almost all of Senegal’s cashew harvest – gathered between April and June as the dry season draws to a close – is sold on in the form of unprocessed nuts for export. Large-scale Indian buyers come to the capital, Dakar, and contract local traders to actually purchase cashews; these traders in turn dispatch freelance agents to the often remote villages where farmers have nuts for sale.

Producers told IPS they faced numerous obstacles with respect to storage and transporting their crop from their villages to urban centres. They also said traders offered them laughably low prices for cashews, and argued that they were exploited by intermediaries who depress prices only to resell the nuts for far more to Indian exporters.

Idrissa Diatta, a farmer from Diattacounda, some 80 kilometres from Ziguinchor, said traders offer the equivalent of 60 U.S. cents per kilo at the farm gate, but are reselling it to exporters for nearly three times more, around 1.70 dollars.

He believes the best way to overcome this is to deal directly with the Indians, but says the middlemen have blocked all attempts so far. “The Indians will never come to see us here. They pass the work on to intermediaries. We’re thinking of getting ourselves organised and sending a delegation to the buyers in Dakar (the Senegalese capital) to discuss things,” he said.

Abdoulaye Diatta, another planter, says traders sometimes claim prices are low because supply exceeds demand, or foreign currency exchange rates are unfavourable. “But if the dollar exchange rate has shifted, or there’s really an oversupply, then we wouldn’t see a single cashew nut plucked from the bush. But no: every nut’s sold. Right now, they’re trying to swap us a sack of rice for two sacks of cashews: it’s ridiculous.”

But Jean-Marie Badji, one of the much-maligned middlemen, says the price of unprocessed cashews varies according to changes in the world market, and traders are trying to make ends meet, not trying to dupe growers.

“Look, we have to travel out to these villages to collect cashews. The roads are in terrible condition, and the truckers charge us heavily to transport goods over them. And we’re talking about completely isolated villages. If we pay more than 250 or 300 CFA (less than a dollar), we risk going bankrupt,” he told IPS.

Badji says that sometimes it is growers themselves who undercut prices. “In the first week of April, we were out in a village called Koundump. We came across a producer who hadn’t sold his nuts because of the utter isolation of the place. When he saw us, he offered us his entire stock for 200 CFA per kilo. I couldn’t refuse it,” he said.

Elimane Dramé, who employs 43 people at a facility that can process 250 tonnes of cashew nuts a year, says the sector has struggled to access operating capital. He says banks are typically willing to loan them only a third of what they need, causing delays in payment and leaving small producers in difficulty.

He told IPS that producers’ need for financing is seasonal. A farmer needs money to put up a storehouse immediately to safely hold the incoming harvest, but the bank often refuses to loan him money and he may be forced to sell hastily, reducing his ability to negotiate prices from a position of strength.

Ibra Fall, who works in the office of the governor of Ziguinchor, has a different take. He says producers are also in difficulty because they fail to fully exploit their resource locally.

“With local processing capacity able to handle less than five percent of the harvest, the only alternative for producers is to sell unprocessed nuts to exporters – with no real power to negotiate. Also, the cashew apples are falling unused beneath the trees, with only a small amount used to make cashew wine.”

Diémé with the Casamance Agricultural Producers’ Cooperative told IPS the problems facing producers ultimately stem from a lack of coordination that prevents them from defending their interests against those of others in the value chain.

“Because we are so poorly organised that it’s hard for a partner, no matter who it is, to meet us halfway, and because we have not improved our growing techniques, our yields. Basically, we don’t inspire confidence.”

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