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Senegal: Making cashews pay

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13 July 2012

ZIGUINCHOR (IRIN) - As the cashew harvesting season draws to a close, producers in the Casamance region of southern Senegal are starting to organize themselves so as to have more say in the price that will be set for their product.

Middlemen—mostly from India—who export the raw nuts, usually walk off with the bulk of the profit, while producers struggle to get by. 'We are organizing—we think we can solve this problem,' Ismaila Dieme, a member of the Agricultural Producers' Cooperative of Casamance, told IRIN.

Dieme; harvested seven tons of cashews in 2011. 'Logically, the revenue generated by the sale of these nuts should have got me through the whole year, but the poor price meant that I won't get by. All the growers in the region are in the same situation,' he told IRIN.

Cashews are an economic mainstay in Casamance, bringing in 35 billion CFA francs (US$65 million) annually, second only to tourism, according to the government. The province produces about 100,000 metric tonnes per year, but exports only about half of that due to poor transport facilities to pick up the nuts. Another 50,000 mt of nuts is exported via Senegal from northern Guinea-Bissau according to Mamadou Dabo, a value and quality chain analyst at USAID in Dakar, the Senegalese capital.

Across West Africa, cashew production is mounting—the region produced 85 percent of the global harvest in 2011, according to USAID— with exports going mainly to India and Brazil. Each year a price is set for the crop—though the bulk of 2012 it hovered between 400 and 500 CFA (74 and 92 US cents) per kg. In 2011 the price varied from CFA 350 to 615 (65 US cents-$1.14), depending on the area.

Producers complain that they have no say about the price, but Nfaly Coly, one of the few Senegalese cashew exporters in Casamance, said the price is set by the market—'the famous law of supply and demand'.

Cashew prices fluctuate, depending on production levels and the value of the US dollar, to which they are pegged. As these vary wildly, so do the prices of raw nuts, in some years dropping as low as 75 CFA (13 US cents) per kg. Setting a fixed price leaves producers with no leverage, said Ndecky Francis, a spokesman for producers in the Adeane district, just east of Ziguinchor, the provincial capital.

'Our cashews will rot in our hands if we do not accept the price the middleman gives us... We are forced to sell off our crops, whatever the price, because we have our families to feed, and care and education of our children to pay for,'' he told IRIN.

Producers are also hampered by poor access to transport facilities—which means they cannot travel to cities to sell their nuts for higher prices—and there are very few processing facilities in the country. It is also difficult to get loans to finance their harvests.

Processing cashews involves separating the fruit and the kernel, and then drying the nuts. Raw nuts achieve much lower prices than processed nuts, said USAID's Dabo. Reorganizing the industry on terms more favourable to producers is possible, but only if they organize themselves better, he said.

Dabo urges those involved to restructure the industry, rather than pitting producers, processors and exporters against each other—all need to sign mutually beneficial contracts to negotiate a price. Once a contract has been signed, producers and processors can apply for credit to finance their harvest. 'This way, they all have the same interests at stake—ideally the contract could be win-win for all,' Dabo said.

The Chamber of Commerce in Ziguinchor is trying to work with producers to set up such arrangements. With help from the French Development Agency (AFD), they have created a platform to enable cashew producers to become better organized, and are trying to set up a fund to buy cashews for re-sale, Ehemba Pascal, president of the chamber, told IRIN.

'Our role is to try to organize all the people—producers, intermediaries and those who come to buy,' he said at a meeting between cashew producers and local authorities earlier this year. French funding will also be used to set up the region's first processing plant, following the example of Cote d'Ivoire, Ghana and Nigeria, Ehemba said.

There are just a few cooperatives processing nuts by hand in Senegal, including a women's cooperative in Thiès, 60km from the capital, Dakar, and a group in Sokone near the coast. Industrial processing will mean cashew production can expand, producers can sell their nuts for higher prices, and more jobs will be created, according to the African Cashew Alliance.

Currently, some 95 percent of Casamance's nuts are exported raw, but this is set to change, said Ehemba, albeit gradually. Meanwhile, individual producers are starting to speak out. Dieme plans to sell his cashews for no less than 500 CFA (about 92 US cents) per kg in 2013, 'Otherwise I'll just have to continue to give my produce away while others profit from my hard labour.'

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