Regional Markets

Regional Markets for Local Development
Producer and consumer prices
International markets determine the purchasing price of groundnuts. The government,
in consultation with farmers organisations, controls producer prices. SUNEOR has
a capacity to buy 300,000 tons of groundnuts per year, which provides a minimum
purchasing capacity and some security of product placement. However, with the significantly
fluctuating production volumes and the current level of one million tons,
Senegalese farmers need to find additional markets. This is the key bottleneck, where
and through which channels to market surplus production during good harvest years.
Even though rural areas have dynamic weekly markets, with very competitive prices
offered by individual buyers, their absorption capacity is limited.
The women farmers in Taiba Niassene receive 775 CFA francs per litre (USD 1.5) for
a volume of over 50,000 litres. For lesser quantities the price is slightly higher, CFA
franc 800 (USD 1.6). Very small quantities for local consumption bring in CFA franc
900 (USD 1.7). The women smallholders have already signed a contract to provide
72,000 liters to a private buyer in Dakar. The small processing units help absorb part
of the remaining surplus 700,000 tons because other GIPAs (Thiakho Maty, Ndrame
Escale and Diossong) ship their groundnuts to the Taiba Niassene processing unit. The
price is substantially higher and seen as fair (165 CFA franc per kilogram, compared
to the CFA franc 125 offered by intermediary agents). Also the farmers benefit from
cash payment on delivery, while the national industry champions that usually buy the
groundnuts operate with a payment delay of at least 4 months. Table 3.4 illustrates the
profit margins for processing one ton of groundnuts into oil.
Innovation and sustainability
CCPA and ActionAid Senegal entered into a seed cultivation partnership in 2006. From
the very start, CCPA has been running the programme without any strong government
support. It links up with organised GIPAs, which are preselected by the national agricultural
research institute to receive the improved seeds. The seed programme producers
buy these cultivation seeds for 2,500 CFA franc per kilo (USD 5). They produce and
sell Base and N1 seeds (for CFA franc 400 and 250 respectively) which are much more
attractive than the seeds offered by private sector providers (often of inferior quality
and offered at widely fluctuating prices). By supporting the launch of this seed cultivation
programme, AAS wanted to assist farmers to find the best way to grow a marketable
crop. When the farmers subsequently faced problems selling their produce, AAS
encouraged the establishment of processing units. As the farmers are directly involved
in the programmes, they can control their production, add value to their product and
gain access to markets at the same time.
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