Growing the Wealth of the Poor - World Resources Institute

ASSOCIATION PROFILE: SONGTAAB-YALGRÉASSOCIATION, OUAGADOUGOU, BURKINA FASOThe Songtaab-Yalgré Association is a women-run organization that facilitatesthe local production of shea butter, a vegetable fat used inhigh-end cosmetics that is made by crushing and roasting shea nuts.Collecting shea nuts has long been important to poor women in BurkinaFaso, as shea trees grow wild in the West African savannah and thenuts are used in local cuisine. However, the international demand forprocessed shea nuts has increased in recent years, creating a significanteconomic opportunity.In 1997, a study by the UN Development Fund for Women concluded thatthe economic benefits of selling processed shea butter on the internationalmarket were nearly 50 percent higher than selling raw nuts(Harsch 2001:4).The Songtaab-Yalgré Association has taken advantage of this differentialfor the benefit of poor women. It has formed relationships withwomen shea nut collectors in 11 villages near Ouagadougou and workswith two women’s unions, Siglé and Boussé, to establish a purchaseprice for the nuts that is considerably higher than what women used toget from private traders. Local women also work in the association’sproduction facilities. In all, the Songtaab-Yalgré Association providesincome to some 3,100 women who protect and manage nearly 20,000shea trees. It sells its product line of traditional and organic shea butterand soaps through a network of distributors in Europe and NorthAmerica (ASY 2007). Songtaab-Yalgré Association was an Equator Prizewinner in 2006.B U I L D I N G O W N E R S H I P, C A P A C I T Y , A N D C O N N E C T I O NGaining Market InfluenceBy building associations such as cooperatives, rural producersestablish a position from which to negotiate with traders ormarketing agents or to displace them and deal directly with largersuppliers or retailers. Traders are an integral part of rural marketchains, but their incentives are not always aligned with that ofrural producers. In Peru, for example, a small number oftraders—about 15 percent—dominate the market for straw hatsand can often fix the prices paid to rural hat producers (Youngand Portocarrero 2007:3). As individuals, rural producers oftenhave poor access to market information and little access to marketoutlets, putting them at a real disadvantage. Associations can helpproducers collect and disseminate market information, improveoverall bargaining power, and identify new markets. This changesthe power balance and helps local enterprises exercise greatercontrol within the market chain (Best et al. 2005:22-23).Cooperatives are the most common rural enterprise association,offering many examples of successfully organizingnature-based businesses. In 1980, tribal groups in the MayurbhanjDistrict of Orissa, India, formed a cooperative to harvest and sellsabai, a durable grass used for making rope and string. Prior tothat time, local sabai harvesters were at the mercy of traders, whodominated access to markets. The cooperative successfully alteredmarket dynamics in the area by gaining the support of the StateCooperative Department, which helped broker a deal with theState Forest Department in which it promised to purchase sabaionly from recognized cooperatives. Since the Forest Departmentwas a large buyer of processed sabai for bundling timber and otherforest products, this represented a significant economic opportunity(Harper and Roy 2000:96–97).Cooperatives have been important organizing forces in countlessother commodity areas as well. In Latin America, mostsmall-scale coffee farmers are members of cooperatives thatprovide technical and marketing assistance to individuals and oftengive them access to credit or invest in community infrastructure andeducation. Fair trade certifications for thousands of these cooperativesallow some 420,000 farmers in Latin America to bypass thenational coffee purchasing system that historically offered lowprices and has boosted these farmers’ incomes by between 100 and200 percent in some cases (Taylor et al. 2003:6-10).Beyond cooperatives, which are associations of individualproducers, rural enterprises also find advantages in bandingtogether in regional networks or clusters to work on mutual technicaland marketing concerns. In Nicaragua, 11 small hammockmakers—each with about 15 employees—formed a legally constitutedbusiness consortium called EcoHamaca with the help of theUnited Nations Industrial Development Organization (UNIDO).Prior to the formation of the group, the hammock makers hadcompeted in the local market. But once convinced of the need topool resources, their association allowed them to reconceptualizetheir product designs and production approaches. For example,they realized that by making their designs more eco-friendly theycould enter the lucrative European and United States markets, sothey shifted to using natural dyes and substituted more abundantContinues on page 103CONNECTION97