Regional Markets

Regional Markets for Local Development
demand in the urban sub-sector for bananas. It took the initiative to improve productivity
of a group of farmers by introducing new technologies: disease-free, tissue-cultured
bananas; better plantation management; improved access to inputs; better storage
and ripening facilities and transport; and the introduction of grading standards that
have improved both productivity and prices (though at increased production costs).
Matanuska is a private company, and as the only large-scale buyer of bananas, there is a
risk of monopoly in this sub-sector. Matanuska actually demanded the exclusive right
to buy from the communities involved in the project; however, with the aid of external
organisations like SNV, a balance was struck. The farmers were aware of the monopoly
risk and demanded the right to sell to alternative traders and exporters, when not producing
under out-growers contracts. This had the impact of increasing the price offered
by Matanuska, because if its prices were seen as too low, side-selling could no longer
be prevented. Also, competing banana trading companies could enter the value chain.
These additional parallel arrangements improved the small-scale producers’ position in
negotiating prices with Matanuska.
In the case of the women groundnut farmers in Senegal, another example, the processors’
traditional strong position also indicated potential threats. Dating from the
period of parastatal involvement in the markets, the largest companies retained a strong
position. Together with a number of large trading houses, they dominated the market
and offered such low prices that farmers could not recover their costs. In a national
roundtable discussion, the government agreed to increase the price offered to farmers
by 30%, in order to kick-start the sector after it had ground to a halt due to unchecked
liberalisation. The role of Action Aid Senegal in this case, providing the impetus for
farmers to organise themselves and get recognition, was extremely important. There
was a delicate balancing act between the farmers’ organisations and their supporting
service providers (the government, the groundnut oil industry and the traders) to allow
all parties to recover their costs, make a profit and continue to participate in the value
chain. Whether the costs of topping up the price by the government can be sustainably
maintained against the rising revenues for all parties (including the state through collected
taxes) is an interesting question. This arrangement mirrors the situation in the
EU where support programmes for the agricultural sector provided by the EU have
indeed resulted in the creation of a strong and very profitable export-oriented agricultural
sector.
These reflections can be visualised in a triangle graphic, where we position the cases
in relation to three aspects (producer context, the value chain context, and the policy
context). NGOMA for example is focusing on both the government context (lobbying
for the position of producers) and on the producers (to strengthen their position in the
chain). Thus, NGOMA appears in the right hand part of the triangle, and seems to
move towards the left-hand corner of the chain.
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