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Chapter 4 Agricultural markets for increased incomes 125
BOX 8 Faso Jigi and the cereal market in Mali
Faso Jigi was established in 1995 with the
support of the Canadian International
Development Agency (CIDA) and the Quebecois
agri-agency L’Union des producteurs agricoles
– Développement international (UPA-DI), in the
framework of a programme for restructuring
cereal markets. Created as an association of
farmer cooperatives, it aimed to facilitate
smallholders’ access to markets and to obtain
better and more stable prices for cereals (i.e.
rice, sorghum and millet) and shallots.
Over time, the collective marketing system set up
in Faso Jigi gathered together important volumes
of product, earning the organization significant
bargaining power in local and national markets,
and reducing transaction costs for both the
farmers and other market actors thanks to
economies of scale in storage and transportation.
The system also guaranteed stable farm prices
and wide dissemination of market information on
prices to smallholders, which also strengthened
them with buyers. Faso Jigi also enabled
members to have access to technical advice,
which improved the quantity and quality of their
yields, and to collective purchase of fertilizers,
which ensured better prices and quality. Finally,
the association has developed a mechanism of
advanced payments to help its members address
the problem of accessing working capital at the
beginning of the agricultural season. Through the
system, farmers receive loans against a delivery
commitment to Faso Jigi. Faso Jigi then requests
a loan from a financial institution based on the
aggregated credit needs of its members, using its
marketing fund as guarantee. An insurance fund
has also been established to cover possible
damages and price shocks.
Since its establishment, Faso Jigi has become
a remarkably successful organization, gathering
more than 5,000 farmers grouped into more
than 134 cooperatives. It sells more than
7,000 tons of cereals annually, valued at more
than 2.5 million euros. It has gained significant
capacity to influence both markets and
agriculture policies. Wholesalers prefer sourcing
from Faso Jigi and are willing to pay higher
prices because the association offers
centralization of stocks, better quality in storage
facilities and accessibility. However, cereal
markets are in permanent change in the region,
thus Faso Jigi must adapt its marketing system
to stay competitive.
Source: “Faso Jigi: A people’s hope” http://www.acdi-cida.gc.ca/acdi-cida/acdi-cida.nsf/eng/FRA-42715145-QBN
Their roles in agricultural markets can vary, from facilitating smallholders’ participation
in a particular part of value chains (e.g. production, post-harvest handling, marketing)
to controlling entire chains through vertical integration. In different contexts, different
types or combinations of roles can be most appropriate. 179 The success of a producer
organization is critically dependent on at least three factors: first, there must be a strong
economic rationale and common interest for its formation; second, its geographical
space, size, structure, governance, management arrangements and legal status must all
reflect the purpose for which it has been established; and third, its members must be
actively committed to pursuing agreed objectives and abiding by an agreed set of rules.
It follows, among other things, that groups formed for community or social purposes
may find particular challenges in representing the specifically economic interests and
playing the economic roles that producer organizations seek to play. Moreover, producer