Cashew nut value chains need State support to flourish in the Casamance, paper finds

07/12/2016
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Three presentations were made during the ongoing 11th African Economic Conference in Abuja on the examining the dynamics and constraints of the agricultural value chain on the continent.

The first paper, titled “Agrobusiness de l’anacarde en Casamance (Senegal): atouts, contraintes et perspectives d’industrialisation” (“Cashew agro-business in Casamance (Senegal): Strengths, constraints and prospects of industrialization”), was presented by Sene Abdourahmane Mbade, of the Université Assae Seck de Ziguinchor in the Casamance, Senegal.

The paper looked at why production and the cashew nut value chain is not flourishing as it should in the Casamance region of Senegal despite the fact that there has been a rapid rice in the price of cashew nuts. The value has risen, in particular, since Indian firms entered into the business in 1995.

Constraints identified include that production is still done on a small scale by smallholder farmers and there are only two cashew nut-processing plants in the entire cashew nut region of the Casamance, thereby slowing down industrialization. This, coupled with problems of finance, the jeopardy of multiple taxation by authorities, and bad roads which add to the cost of moving the products to market made it difficult for the cashew nuts trade to boom.

Mbade was of the view that to improve the production of cashew nuts, which will greatly impact the economy of the Casamance region, the State needs to step in and be involved and help with cheap loans to the farmers as well as improving the economic infrastructure of the region.

Amani Nourredine Mensah, of the University of Lomé, Togo, discussed and proffered suggestions to strengthen and make the paper less theoretical and more empirical.

The second paper presentation titled, “Chaine de valeurs mondiale et montee en gamme des pays de la CEDEAO” (“Global Value Chain and Range of ECOWAS Countries), looked at the global value chain and how and where ECOWAS (Economic Community of West African States) countries fit in the chain.

The authors, Amani Nourredine Mensah and Abdul-Fahd Fofana, of the University of Lomé, first explained the concept of the global value chain, which looks at a product from the design stage all the way to the marketing and commercialization stage. Countries do not need to set up an entire production line for a product; however they can focus on producing components for which they have comparative advantage.

The study revealed that ECOWAS countries were weakly integrated in the lower rungs of the global value chain, being mainly producers of primary commodities. The countries concentrated more on low value added products thereby ranking low on the Rich Man’s ladder scale.

Mbade, of the Assae Seck University, Ziguinchor, and participants discussed the paper. It was suggested that the presenter review the plan of the paper and deepen the analysis, delve into the impact of the Economic Partnership Agreement with the European Union on ECOWAS, and the effect of commodities board policies in ECOWAS countries.

The final paper of the session was titled “Uganda’s warehouse receipt systems: improving market performance and productivity”. The paper was presented by Miriam Katunze of the Economic Policy Research Centre, Uganda.

The warehouse receipt system, WRS, makes it easier for farmers to obtain loans from financial institutions. The study set out to document perceptions of the actors in the e-WRS, and whether there has been an improvement in the system.

The researchers found out that farmers still have difficulties making the top grades and meeting standards in crops production. Access to credit was still an issue as only one cooperative could access an agricultural loan, and had difficulties paying back due to technicalities.

The study highlighted an interesting gender dimension to the production of the main crop, maize: namely, women did the farming and men did the trading. Women were found to be significantly better at repaying loans, at 80-90%, than men, whose repayment rate averaged 70-75%.

Discussing the paper, Robert Asogba of the United Nations Development Programme (UNDP) in Nigeria suggested that the study should be framed within the context of post-harvest losses. There should be an organic link between the objectives, the analysis and the recommendations as well as indicating whether the warehouse receipt system improved productivity, he said.

The session, which took place on Day 2 of the conference, was chaired by Colleen Zamba, Senior Economic Adviser with UNDP.

The African Economic Conference is taking place from Monday, December 5 to Wednesday, December 7, 2016. The annual event is organized by the African Development Bank, United Nations Economic Commission for Africa and the United Nations Development Programme.