cashew processing in benin

Analysis of the Benin Cashew Sector Value ChainAfrican Cashew initiative

115716_ACI_Benin_gbRZ.indd 1

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African Cashew Initiative is funded by:COOPERATIONBENIN

and private partnersFEDERAL REPUBLIC OF GERMANY

Implemented by:

In cooperation with:

Published by: Deutsche Gesellschaft fr Technische Zusammenarbeit GmbH (GTZ) International Foundations Postfach 5180, 65726 Eschborn, Germany T +49 61 96 79-1438 F +49 61 96 79-80 1438 E [email protected] I www.gtz.de Place and date of publication: Benin, february 2010 Author: TANDJIEKPON Andr Mahoutin Responsible editor: Peter Keller (Director African Cashew initiative) African Cashew initiative (ACi) 32, Nortei Ababio Street Airport Residential Area Accra, GHANA T + 233 302 77 41 62 F + 233 302 77 13 63 Contact: [email protected]

Acknowledgement: This study has been implemented as part of the African Cashew initiative (ACi), a project jointly financed by various private companies, the Federal German Ministry for Economic Cooperation and Development and the Bill & Melinda Gates Foundation. ACi is implemented by the African Cashew Alliance (ACA), the German Development Cooperation GTZ, as a lead agency as well as FairMatchSupport and Technoserve. This report is based on research funded by the Bill & Melinda Gates Foundation. The findings and conclusions contained within are those of the authors and do not necessarily reflect positions or policies of the Bill & Melinda Gates Foundation. Design: creative republic Thomas Maxeiner Kommunikationsdesign, Frankfurt am Main/Germany T +49 69-915085-60 I www.creativerepublic.net Photos: GTZ/Rdiger Behrens, Thorben Kruse, Claudia Schlein & iStock, Shutterstock, creative republic


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Analysis of the Benin Cashew Sector Value ChainFebruary 2010


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ContentsList of Tables .....................................................................................................5 List of Figures ....................................................................................................5 Summary...............................................................................................................7 2.6 Ex-antepovertyimpactassessment....................... 36 2.7 Institutionalandpoliticalgovernancechain........ 39 . 2.7.1 elevanceofthecashewvaluechainin R thenationalpoliticalarena................................... 39 2.7.2 ural,regionalanddecentralisationpolicies R affectingcashewproduction/processing ............... 41 . 2.7.3 Businessgovernance............................................. 41 2.8 SWOTanalysisofthecashewvaluechain........... 42

1 Introduction .................................................................................................9 1.1 1.2 1.3 1.4 Purposeofthestudy............................................. 9 Method................................................................. 9 B riefdescriptionoftheACiprojectand activitiesinBenin................................................. 9 B riefdescriptionofcashewproductionand processing............................................................. 10

3 Cooperation and collaboration with other programmes .....46 3.1 3.2 Overviewofongoingcooperationactivities.......... 46 O pportunitiesandsuggestionsforfuture cooperationwithACi........................................... 46

2 Analysis of the Value Chain .............................................................20 I ntroductiontothehistoryofcashew productioninBenin............................................. 20 2.2 llustrationofthevaluechainandthe I marketingprocess................................................ 21 2.3 D etaileddescriptionofthecashew productionsystem................................................ 23 . 2.3.1 Productionsystem............................................... 23 2.3.2 Averageplantationsize........................................ 23 2.3.3 Accesstoland....................................................... 23 2.3.4 Useofinputs....................................................... 24 2.3.5 Productivity.......................................................... 24 2.3.6 Seasonaltimesequenceofintegratedcrops.......... 24 2.3.7 Ecologicalaspects................................................ 24 2.3.8 Genderaspects...................................................... 25 2.3.9 Economicanalysisofthecashewsystem.............. 25 2.3.10Cashewhouseholdincomeandpoverty .............. 25 . 2.3.11Organisationofgrowers/cooperatives.................. 26 2.4 D etaileddescriptionofcashewprocessing andtrading........................................................... 26 2.4.1 tructureoftheprocessingand S exportbusinesses.................................................. 26 2.4.2 Historyandlocationofprocessingunits............. 26 2.4.3 Processingcapacity............................................... 27 2.4.4 Technologiesused................................................. 27 2.4.5 Jobcreation.......................................................... 27 . 2.4.6 Competitiveness.................................................. 27 2.4.7 Organisationalchainandbusinessmodel........... 27 2.4.8 Pricestructure...................................................... 28 2.5 A nalysisofbusinessdevelopmentservices alongthevaluechain............................................ 31 2.5.1 Overviewofvaluechainserviceproviders............ 31 2.5.2 Needforoperationalbusinessservices ................ 31 . 2.5.3 verviewofthevaluechainsfinancial O serviceproviders.................................................... 31 2.5.4 Needforoperationalfinancialservices................. 31 2.1 4 Conclusions ..................................................................................................50 4.1Identificationofgapsininformation........................... 50 4.1.1 Overviewofmissinginformation........................ 50 4.1.2 Developmentofaplantocollectmissingdata..... 50 4.2 ReviewofACiprojectstrategy............................. 52 4.2.1 Strategypriorities................................................ 52 4.2.2 Suggestionsforotheractivities............................. 52

List of Acronyms .............................................................................................54

Appendix I: Bibliography ......................................................................... 57

Appendix II: Detailed Information on commercial Companies ...........................................................................................................60


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List of TablesTable 1.4.1:ChangesinPACcargotraffic (1999-2008,inthousandsofMT)..................................... 11 Table 1.4.2:Importanceofthecashewvaluechain forthenationaleconomy................................................... 11 Table 1.4.3: Informationongrowers................................ 12 . Table 1.4.4:Informationontheprocessingindustry........ 14 Table 1.4.5: Informationoncommercialcompanies andactivities...................................................................... 15 Table 1.4.6:Valuechaincollectiveactionandpublic support(stakeholderassociationsororganisations)........... 16 . Table 1.4.7: Informationoncashewvaluechainpolicy.... 17 Table 2.3.1:Seasonaltimesequenceforcashews integratedwithannualcrops............................................. 24 Table 2.3.2: Distributionofworkalongthecashew valuechain,bysex............................................................ 24 Table 2.4.1: Summarydataontheprocessingunits......... 28 Table 2.5.1: Overviewofvaluechainserviceproviders .... 32 . Table 2.5.2: Synopticoverviewofagenciesfinancing a griculturalactivities......................................................... 33 Table 2.6.1:Generalpovertysituationandhigh relevancetonationalstrategiesandplans.......................... 36 Table 2.6.2: PSIAanalysisofstakeholders andinstitutions.................................................................. 37 Table 2.7.1: Relevanceofthecashewvaluechain inthenationalpoliticalarena............................................ 39 Table 2.7.2:Nationalpoliciesaffectingvaluechain performance....................................................................... 40 Table 2.7.3: Rural,regionalanddecentralisation policiesaffectingvaluechainperformance....................... 41 Table 2.7.4: Productionandprocessingstandards............ 41 Table 2.8.1:SWOTsynthesis........................................... 43 Figure 2.5.1:Needsofvaluechainparticipants formediumandlong-termfinancialservices..................... 35 Figure 2.8.1:Illustrationofthedifficultiesinthe cashewvaluechain............................................................. 42 Table 3.1.1: Cooperation/coordinationwithother p rogrammes....................................................................... 47 Table 4.1.1: Gapsininformation..................................... 50 Table 4.1.2: Timetableforobtainingthemissingdata..... 51

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List of FiguresFigure 2.2.1:Thestakeholdersinthecashew valuechain ........................................................................ 21 . Figure 2.2.2: Economicillustrationoftherawnutvalue chainforexportedrawnuts............................................... 22 Figure 2.3.1: Mapofcashew-growingareasinBenin....... 23 Figure 2.4.1:Economicillustrationofthevaluechain ofwhitekernelsproducedforexport................................ 30 Figure 2.4.2:Economicillustrationofthevaluechain ofroastedkernalsproducedforthelocalmarketand export ............................................................................. 30


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SummaryThisanalysisofthecashewsectorhasbeencarriedoutfortheBMGF-fundedACiproject,afederative projectimplementedinfiveAfricancountriesproducingandexportingcashewnutswithlittlevalue added.Thelaunchofaprojectofthisscoperequiresustotakestockofwhatisknownaboutproduction,processing,marketingandexportintheparticipatingcountries.Theaimofthisanalysisis thereforetoenhanceunderstandingofthecashewvaluechaininBenin. Thecashewvaluechainrepresentsanenormouseconomic,socialandenvironmentalopportunity forBenin.Thecashewsectorhasgainedinimportanceinrecentyears,especiallysincethelate1990s. Cashewplantationshavegonefromcoveringanestimatedsurfaceareaof10,000haatthetimeto over190,000hanationwidetoday,withmorethan75%ofplantationsbeingunder10yearsold. Similarly,exportsofcashewproductsrosefrom10,000tonnesin1996to116,398tonnesin2008. Thelocal,regionalandnationaleconomieshaveusedthesubstantialrevenuesobtainedthankstothe sectorshealthcashewsaccountfor8%ofnationalexportrevenuesand24.87%ofagriculturalexport revenuestostabilisethetradebalance.Thesectorsbasiccharacteristicisthatincomefromcashew productsisderivedchieflyfromexportsofrawnutswithnoaddedvalue,makingprocessingthe weakestlinkinthecashewvaluechain. Therehavebeensomesuccessstories,andthepotentialfordevelopingthecashewsectorinBenin istrulyfavourable,butagreatmanydifficultiesremaintobeovercomebeforenationalproductionis competitiveandbecomesasourceofgreaterrevenuesforthevariousstakeholders.Thosedifficulties includepoorlyfunctioningproducerandstakeholderorganisations,ageingplantmaterial,problemsof accesstocashew-specificfundingandinputs,lowlocalprocessingcapacity,thetrendtowardslower productprices,lowplantationproductivity,poorcontrolofmarketaccessrules,fewincentivesto investinprocessing,thelackofreliablestatistics,theabsenceofappropriatecreditandtheexporters strangleholdonthemarket. ThesedifficultiesorconstraintsarethemajorchallengesfacingtheACifederativeproject.The projectwillbeimplementedinpartnershipwithGTZ,whichcoordinatesallactivities,TechnoServe, whichisdevelopingprocessing-relatedactivities,andFairMatchSupport,whichisinchargeofmarket accessactivities.TheACApromoteslinkagesbetweencashewgrowers,processorsanddealersthrough thetransregionalexchangeofexperience.


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1 Introduction1.1 Purpose of the study

1.3

Brief description of the ACi project and activities in Benin

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Themainreasonforanalysingtheplannedcashewvalue chaininthecountriesparticipatingintheACiprojectis tosynthesiseandsystematicallyanalysealltheinformation availableoncashewsinordertoenhanceunderstanding oftheactivitiescarriedoutinthesector,togaugetheirimportanceforthenationaleconomyandtomeasuretheir impactonpovertyreduction.Theaimisthustobuildon thereferencedataavailableattheoutsetoftheprojectin ordertoensurethevariousdevelopmentstructuresdonot duplicatetheiractivitiesandtoaugmentsynergyand effectiveness.Specifically,thestudyaimsto: analysethecashewvaluechainatnationallevel,focusing onproduction,processingandtradeofcashewnutsand theirderivatives usetheanalysisofthecashewvaluechaintodocumentongoingactivitiesoractionsandtobringtolightnewpriority activities.

TheACiprojectaimstobringaboutlastingimprovementin thecompetitivenessofAfricancashewnutsmallholdersand toreducepovertyinBenin,BurkinaFaso,CtedIvoire, GhanaandMozambique.Itisafederativeprojecttargeting thefollowingdevelopmentobjectives: asustainableincreaseintheprofitability,productivity andqualityofcashewproduction asustainableincreaseinthequantityandqualityof localcashewprocessing distributionofandrecognitionforthehighqualityof Africancashewnutsintheglobalmarketplace improvingincomesfromcashewproductionandlocal processing learningandinnovation. Fourorganisationsareinvolvedintheprojectsimplementation: GTZ,whichcoordinatesallactivities,theNGOsTechnoServe andFairMatchSupport,andtheACA,whichpromoteslinkagesbetweencashewgrowers,processorsanddealersthrough thetransregionalexchangeofexperience. Aftertheprojectsofficiallaunchon15to18April2009in Accra(Ghana),activitiesinBeninstartedwithakickoffworkshoppresentingtheprojecttothevariousplayersinthecashewsector,on20and21July2009inCotonou.Theworkshop enabledgrowers,processors,economicoperatorsandtechnicalandfinancialpartnerstolearnabouttheprojectsobjectives,tohighlightthespecificchallengesinBeninwhich theACicouldhelptoovercome,todefineajointstandard planningframethattookintoaccountnationalstrategies, andtoidentifythemembersoftheprogrammesnational steeringbody.FollowingtheannouncementinFebruary 2009thattheprojectwouldbefundedbyBMGF,steps wereimmediatelytakeninBenintolaythegroundworkfor meetingtheprojectsobjectives(information,awareness- raising,reviewofnationalstrategieslinkedtothecashew valuechainandtheirindicators,communicationtomobilise thestakeholders,etc.)andtrainingprovidedtogrowersand processors.

1.2

Method

InBenin,thestudystartedwithtrainingtoensureuniform understandingandtointroducetheformsofpresentingthe informationcollectedandthetechnicalaidsandtoolstobe usedinthefield.Afterthattraining,whichtookplacein Accra(Ghana)inAugust2009,thestudywasconductedin Beninby: collectingthedocumentsavailableonthesubject frompublicandprivateinstitutions(researchinstitutes, uni ersities,developmentprojectsandprogrammes, v ministrytechnicaldepartments,processingandtrading units,growerorganisationsatvariouslevels,etc.) reviewingandconsolidatingexistinginformation relevanttothestudy collectingadditionalinformationfromresourcepersons andstakeholdersinvolvedinthecashewsector analysing,weighingandcollatingthedataobtained (documentreviewandinterviews) drawingupthereport,stepbystep,usingthebasic studyoutline finalisingthereportinthelightoftheobservationsmade.


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1.4

Brief description of cashew production and processingingatotalof190,000hainanagroforestryland-usesystem (FAOSTAT reported by FBSPL (2008))thatalsoproduces annualcropssuchascotton,manioc,maize,groundnutsand sorghum.Mostofthecropsaregrownwithoutchemicalinputs. Thecashewprocessingsectorisverystunted,accountingfor lessthananestimated5%ofnationalproduction.Atpresent itcomprisesonlyoneindustrialprocessingunitwithacapacityofmorethan1,000tonnes/year,whoseoutputisexported totheEuropeanmarket(Afonkantan Benin Cashew factory southofParakou),andsmallunitswithalowercapacityof 150tonnes/year,whoseoutputissoldonlocalandregional markets(GK5, AFETRACA, ZANCLAN, SONGHAI Centre and GNICOBOU units).Manyprocessingunitsthatexisted inthepastshutdownforreasonsofmarketavailability,the poorqualityoftheprocessedgoods,lackofsuitabletechnology,inefficientresourcemanagementandtheabsenceofsuitablefinancialsupport(SEPT, CADJOBE, AGRICAL/Parakou units, etc.).

ThecashewsectorrepresentsahugeagriculturalexportopportunityforBenin,togetherwithcotton.Indeed,exportsofraw nutsrosefrom36,487tonnesin2001to116,398tonnesin 2008(PAC/DCM/SESP, 2009).Thesectoraccountedfor 13.5%ofBeninsexportsin2008and1.7%oftrafficatPAC. Cotton,whichhadalwaysbeenBeninstopagriculturalexport product,wasreplacedin2008bycashews,whichoutpacedall agriculturalproductsexportedbyBeninduringthatyear. TheestimatedFOB monetary value ofthoseexportswas 36.47billionCFAF.AccordingtotheMEF (2008),in 2008the FOB valueofgoodsexportedbyBeninroseby9.3% incomparisonto2007,increasingfrom419.5billionCFAF in2007to458.3billionCFAFin2008.Accordingtothe samesource,thechangeistheresultofgrowthinexportsof cashewnuts(+30.7%)andcottonfibre(+16.5%).Cashews represented8%ofthetotalvalueofexportsin2008,7%of agriculturalGDPand3%ofnationalGDP.Theproduction ofrawcashewnuts,in8ofthecountrys12departments, occupiesabout200,000planters(Matthess et al. 2008)work-

1 FOBvalueestimatedonthebasisofanexportvolumeof 116,398tonnesin2008at700US$/tonnewithanexchangerate throughout2008of1US$=4,478.053CFAF(BCEAO,2008).


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Table 1.4.1: Changes in PAC cargo traffic (1999-2008, in thousands of MT) Sources Total imports Total exports Cashew nuts Cotton, cotton seeds Other agricultural and forest products Other products Total imports and exports 1999* 2,236.2 360.4 0.0 264.5 0.0 96.0 2,596.7 2000* 2,674.8 398.7 0.0 273.3 3.1 122.3 3,073.5 2001 2,929.3 380.5 36.5 198.7 52.3 93.1 3,309.9 2002 3,007.7 462.2 44.8 182.8 88.6 146.0 3,469.9 2003 3,808.9 469.4 48.4 202.2 95.5 123.4 4,278.3 2004 3,520.6 448.2 65.8 144.2 90.4 147.9 3,968.8 2005 4,556.8 596.1 66.2 233.0 81.4 215.4 5,152.9 2006 4854.8 514.3 101.7 103.1 117.8 191.7 5,369.1 2007** 5,528.0 624.4 88.2 124.7 98.1 313.4 6,152.4 2008** 6,135.1 863.3 116.4 113.8 83.0 550.1 6,998.4

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* 1999 & 2000: Cashew and karite nuts included in other products. ** The 2007 and 2008 volumes include processed Afonkantan products shipped to the Netherlands.Source: PAC, 2009

Table 1.4.2: Importance of the cashew value chain for the national economy Indicators Economic HDI (global ranking) GDP (in US$ + global ranking) Agricultural GDP Agricultural GDP / national GDP 163rd out of 177 countries 5,4 billion US$ 1,73 billion US$ 32% with cashews accounting for 3% of GDP 7% of agricultural GDP 8% of national export revenues 24.87% of agricultural export revenues Sources (UNDP) World Bank, 2007 (agricultural GDP) Matthess et al, 2008 MEF/CNPE, 2008 PAC, 2009 Calculated on the basis of agricultural revenue 2 = 32% of exports

Export structure and trade balance Benin had a trade balance deficit of 300 billion CFAF (667 million US$) in 2008 compared to 232.6 billion CFAF (517 million US$) in 2007. The import/export cover rate fell from 64.3% in 2007 to 60.4% in 2008.

Average annual total volume of cashews produced

116,398 tonnes (incl. cashews from Nigeria, Togo and Burkina Faso, estimated at 15% by the players, i.e. 17,460 tonnes in 2008) 2,335,151

PAC, 2009 Data collected locally

Area planted (ha) Poverty index Monetary poverty index: 33.3% HPI: 48,9% 2 out of 5 households live in poverty (INSAE, 2002)

2,335,151

Calculated using existing data

Urban

33% (2000)

Rural

23% (2000)

No information on % of cashew farmers believed to live below the poverty threshold3

MEF/GPRS, 2007, Benin PRSP 2003-2005 MEF/CNPE, 2008

Population 6 769 914 (recensement 2002) 8 497 828 (prvision 2009)

Urban

3,284,119

Rural

3,485,795

2.5-3% of the population is involved in / depends on cashew production

INSAE, 2002 INSAE, 2008 Calculated using existing data

2 Theagriculturalsectorcomprisesagriculture,animalhusbandry, fisheriesandforestry. 3 Sociologically,everyBeninesehopestoriseabovethepoverty threshold.


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Table 1.4.3: Information on growers Information on growers Total number of cashew growers Average household size [in number of persons] Farmgate price (grower price) [US$/tonne] Average household income of cashew growers [in US$] Cashew revenues in terms of total revenue [as a % of total revenue] Other crops associated with cashew cultivation Other food and cash crops cultivated [average surface area / crop (ha)] Other sources of income Harvest period Number of cashew trees [number per ha] Productivity per cashew tree [in kg per ha] and US$ Average age of cashew trees [in years] 200,000 (national estimate) More plantations are owned by men (95%) than by women (5%) (national sample + survey in Atacora/Donga) Sources MAEP, 2008 ; Tandjikpon et al, 2008

National: 5.59 Urban: 5.12 Rural: 5.95 500 US$/ tonne (2007-2008)* * 1 US$ = 4,478.053 CFAF

INSAE, 2002 Data collected from the playersDGCE, 2008 Calculated on the basis of 98,938 tonnes produced locally by 200,000 estimated growers in 2008 at an average price of 500 US$/tonne (grower price). Cashew accounts for 24.87 % of agricultural export revenue MAEP, 2007 MAEP, 2008 MEF/CNPE, 2008 MAEP, 2007 MAEP, 2008

247.40 US$

24.87%

Cotton, yams, cassava, maize, groundnuts, sorghum, chilli peppers > 1: cotton < 1: yams, cassava, maize, sorghum 0 and 0.5: groundnuts, chilli peppers Cashew apples Residue from clearing and pruning used for energy

January to April (peaking in February) > 100 to 200: common practice < 100: few 2.5 kg/tree 1.25 US$/tree (grower price) 78% of cashew trees were less than 10 years old in 2008 (survey in north-west Benin). Similar trend nationwide. Most plantations were planted after the boom in the late 1990s

Tandjikpon et al, 2008 MAEP, 2008 Tandjikpon et al, 2008 ACA, 2006 + Calculation based on existing data Tandjikpon et al, 2008


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Information on growers Beninese standards (NB): NB 01.03.002 on specifications and analyses of cashew nuts and kernels NB 01.11.015 on aflatoxin B1 dosage and B1, B2, G1 and G2 totals in cereals, nuts and derivatives NB 01.11.002 on labelling of pre-packaged food products NB 01.11.003 on analysis of pesticide residues NB 01.03.004 on roasted cashew kernels NB ISO 6633 on fruits, vegetables and derivatives NB 01.03.005 and NB 01.11.017 on uncertified cashew specifications and analysis methods Raw nut: KOR applied by the buyer to determine the price for all exported products (100%) Kernel: HACCP for exported products (Europe) Very few chemical inputs (manure, pesticides) are used to grow cashews in Benin. The few cases observed are individual initiatives taken by growers either to control pests affecting a few trees or to make up for insufficiencies at the plantation. In rare cases, phytosanitary treatment using insecticides and fungicides. The trees benefit from the after-effects of inputs applied to associated crops at a young age (cotton). Land pressure in southern and central Benin and availability in the north. Population density/sq km in cashew-growing areas: south-centre: 38-125 inhabitants/sq km north: 20-31 inhabitants/sq km

Sources

Degree of cashew certification

Information from processors and buyers CEBENOR (2007)

Inputs used

Various MAEP reports

Land available to expand cashew plantations

INSAE, 2002


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Table 1.4.4: Information on the processing industry Information on the processing industry Processing capacity of all processing industries in Benin Currently used [In tonnes/year] Potential Large over 1,000 MT Average exceeding 1,000 MT Small 500 MT: Operational: 1,800 tonnes 4,000 tonnes/year (with the units that shut down) Afonkantan Benin Cashew (ABC) Tchaourou, northern Benin FBSPL (2008) www.cashewinfo.com (Cashew Handbook, 2008) MAEP, 2008 Adex, 2007 + Data collected from processors and stakeholders Sources

Processing units

roupe KAKE- 5 (Savalou) G MS (Glazou) E FETRACA, Cotonou (Sud-Bnin) A ANCLAN, Cotonou (Sud-Bnin) Z entre SONGHAI Porto-Novo (Sud-Bnin) CKadjogb (Savalou) La LUMIERE (Savalou -Tchetti) ORI SARL (Bant) NAD and CO (Tchaourou)

Non-operational:

Processing capacity Currently used 1,800 tonnes Indian technology4 Italian technology Local manufacture (adaptation) permanent Employment: about 220 jobs per year 5 Men Women6 Service provided to the grower Market Training in quality approach Rural credit Advice White kernels (Europe and Nigeria) Roasted kernels (Local and regional) 44 176 seasonal

FBSPL (2008) www.cashewinfo.com (Cashew Handbook, 2008) Information from processors

Technology used

Information from processors

Information from processors

Annual turnover

2,868,716 US$ (calculated on the basis of 1,800 tonnes of raw nuts producing an average 20% kernels at a price of 5.44 euros/kg of w320 kernels, the benchmark grade)

FBSPL (2008) www.cashewinfo.com (Cashew Handbook, 2008): for processed volume "The Hindu" newspaper of 14/02/09 for benchmark price

Ownership structure and source of financing / ownership

Private properties for all processing promoters. Financing is obtained for the most part from the processors. However, the Afonkantan unit benefited from the GTZ Private Public Partnership Facility. Others benefited from the ADEx and PASP cost-sharing support mechanism. The promoters benefited from various facilities:

Information gathering

Assistance received from:

Tax exemption for imported equipment Duty-free zone conditions Training


4 Thetechnologyusedcomprises:calibratorsforsortingrawnutsintofourcategories;steamembrittlement;nut-shellingdevices(handorfoot operated);dryingchambersfordryingshelledkernelsbeforeblanching;Italianmechanicalpeelingconveyors(pre-peelingfollowedbyhandpeeling); weighingdevices(sorting);vacuumandcartonpackagingdevices;warehousebygrade. 5 Theprocessingdataobtainedindicatethatittakes0.03817men/workingdaytoprocessonekgofnuts.The1,800tonnesprocessedannually wouldthereforerequire68,706men/workingdayfor313workingdaysintheyear(exceptSunday). 6 Womenaccountforatleast80%ofthestaffofprocessingunits.


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Table 1.4.5: Information on commercial companies and activities Information on commercial companies and activities Companies present in 2007 and 2008 (most based in Cotonou) Number of companies in the country Companies working in the sector occasionally Estimated annual turnover [in million US$] Annual turnover relating to cashews [in million US$] Estimated annual volume traded [in tonnes) Raw nuts Kernels India Raw nuts Vietnam Pakistan Singapore 25 18 Sources Information gathering from the stakeholders; DGDDI, 2008; ADEx, 2007

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1023,4 4 million US$ 7 81,88 million US$ 8 116,398 tonnes 360 tonnes9

MEF/CNPE, 2008 Calculated on the basis of data collected; MEF/CNPE, 2008 PAC, 2009; FBSPL (2008); www.cashewinfo.com

70%

}

25% 5%

ADEx, 2007

Local processing Target market(s) Kernels (processed product) 100% of Afonkantan output is shipped to the Netherlands (white kernels).

DGDDI, 2008 and information gathering

About 70% of the output of small-scale and semi-industrial units is sold on the national market, 20% in Western and Central Africa and 5% informally in Europe and the United States (GK5 and BOULAMB).

ADEx, 2007 Information gathering and firsthand accounts

7 8 9

Thetotalvalueof2008exportsequals458,3billionCFAF. Cashewsaccountfor8%ofexportvalue. Representing20%ofthetotal1,800tonnesprocessedbyBenin.


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Table 1.4.6: Value chain collective action and public support (stakeholder associations or organisations) The various kinds of organisations involved in cashew activities and their size 1. 2. 3. 4. FENAPAB, which has four main members10 : Atacora and Donga URPA (north-western Benin), with 21,701 growers in 308 cooperatives out of a total of 35,700 growers surveyed (2008 survey11) Borgou and Alibori URPA (north-eastern Benin)12 Zou and Colline URPA (central Benin), with 56,516 growers in 300 cooperatives Ktou UCPA (eastern Benin), with 481 growers in 28 cooperatives. ADEx. World Bank and EU financing. GEPT ANAPAT

Cashew-related projects, programmes and initiatives The various organisations and/or initiatives that have existed in the country, specifying the donors/financial partners 1.1. 2. 2.1 2.2 Institutions/organisations INRAB, financed by GTZ, DANIDA Plant Protection Service (DAGRI) DPQC CeRPA SONAPRA FSA/UAC Faculty of Agronomy, UP Fund for the Development of Occupational Training and Apprenticeship (FODEFCA) IITA-Benin SNV CNA Projects, programmes and initiatives Current projects ProCGRN: GTZ funding ACi: BMGF and BMZ funding PADSA/component for private sector agriculture: DANIDA funding PADFA: funding Benin budget support PADEX Completed projects13 PADSE, 2000-2005: AFD funding. Used to promote cashew development in Collines, Borgou and to a lesser extent Atacora and Donga departments (guidance, planting, research, organisation, marketing) PAMRAD, ended 2008: Cashew promotion and development in Atacora and Donga (marketing, training and survey of potential); BTC funding Project to restore Bassilas forest resources (PRRF-Bassila: ended 2004). Support for planting in Bassila commune; GTZ funding Project for forest massif management in Agoua and Agramarou (PAMF, ended 2007). Support to rehabilitate former State plantations in Bant and Tchaourou communes; African Development Bank funding Joint technical assistance project for developing countries and other African countries (ended 2003); support for the formulation of market access strategies; ITC/CIC funding PASP, ended 2009; support to promote cashew nuts (processing, market, training, etc.); World Bank and EU funding

10 Cashewsaregrownnotonlybythesefourmembersbutalso elsewherebyanon-negligiblenumberofgrowers.Eachmemberhasa significantnumberofgrowerswhofunctionoutsidethecooperativesand thereforedonotappearinthestatistics. 11 AtacoraandDonga(30.7%oftheterritory)aretheonlyparts ofBenininwhichasystematicsurveywasmadeofpotentialcashew production. 12 TherearenoreliabledatafortheBorgouandAliboriURPA, butthetwodepartmentshavealargepoolofgrowerswhosenumberis estimatedatbetween50,000and60,000. 13 Theprojectsconsideredcashewsinteraliaasameans ofdiversifyingactivities.


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Table 1.4.7: Information on cashew value chain policy Information on policy Cashew sector policy Strategy to reinforce the cashew system: reference document 2007-2011 PSRSA, 2006-2011: cashews are one of the Governments 12 priority systems Sources MAEP, 2007 ; MAEP/PSRSA, 2007

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Policy objective

Enhance cashew sector organisational and economic efficiency Set the rural floor price (minimum) under the arbitration of the Minister of Trade Establish the schedule for the sale of raw nuts by joint decision of the Ministers of Agriculture and Trade

MAEP/PSRSA, 2007

Price regulation


Export taxes on raw nuts [%] Export taxes on kernels [%]

Only road tax for 0.8% Only road tax for 0.8% Nuts enter the country in uncontrolled amounts via the porous borders with Nigeria, Togo and Burkina Faso. They are not officially registered at customs points because they benefit under the clauses for the free circulation of goods between ECOWAS countries. Undocumented payments are nonetheless made to uniformed agents (customs officials, police, gendarmes, etc.) depending on the size of the shipment Duty relief on the import of processing equipment for agricultural products. None Fixed parity with euro, CFAF zone Exchange rate 1 = 655.957 CFAF 100 CFAF = 1 French franc (before the euro); 1 US$ = 470 CFAF (September 2009) Agreements: ECOWAS free-trade zone WAEMU, monetary zone African, Caribbean and Pacific Group of States/EU WTO AGOA (easier access to the American market)

Benin Finance Act Benin Finance Act

Raw nut export and import taxes

Information gathering from the stakeholders

Tax-related investment facilities (or similar measures) Country label Exchange rate policy Exchange rate stability [last decade]

Finance Act 2007, 2008

MFE, 2008 MFE, 2008

Trade licences and preferences Specify membership and relevance to cashew trade


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2 Analysis of the Value Chain2.1 Introduction to the history of cashew production in Benin

Beninscashewsectorischaracterisedbyalocalprocessing sectorthatcanhandleamerefractionoflocalrawnutproduction.Beninesecashewscontinuetohaveareputationfor highqualityandareconsideredsecondinWestAfricaonly tothosefromGuineaBissau (ACA).Thepaceofsectordevelopmenthasquickened,particularlysincethelate1990s, whenthepriceofnutsroseontheinternationalmarket,initialsignsoftroubleinthecottonsectorpointedtotheneed todiversifyagriculturalrevenuesandthedevaluationofthe CFAFmadelocallyproducednutsmoreattractive.Cashew plantationsareownedchieflybymen,aswomenhavedifficultyobtainingaccesstolandownership.Theyalsotendto beownedbynativesratherthannon-natives;thelatterare asarulenotauthorisedtoplantperennialcropslikecashews onlandtheyexploitforagriculturaloragriculture-related activities. In1990,only10,000haoflandwerecoveredwithcashew plantations(Lacroix, 2003);by2008thatfigurehadrisen toanestimated190,000ha(FAOSTAT,reportedby www.caswewinfo.com).Portdataindicateanexportvolume of116,398tonnesin2008(PAC, 2009),anestimated15% ofwhichcamefromNigeria,TogoandBurkinaFaso(stakeholdersurvey).Nationalproductionin2008thereforeprobablyhoveredaround98,938tonnes.Sinceitishardto obtaininorganicfertiliser(whichisessentialforahigh-quality bountifulyield)andspecificpesticides,theplantationsreal yieldisverylow,between300and500kg/haofrawnuts.This lowyield,usuallytheresultofpoorcultivation(highplantingdensity,i.e.>100trees/ha,irregularmaintenance,bad seeds,poorharvestandpost-harvestpractices,etc.)isbeing correctedbytheintroduction,throughtrainingandtheproductionofappropriateextensionaids,byimprovedtechniques forstartingandmanagingplantationsandtheuseofimproved seeds.Bythesametoken,theuseofappropriatefertilisers andpesticidescouldhelpraisethelevelofyieldsintermsof bothquantityandquality. Ateachmarketingcampaign,thegrowersfloorpriceforraw nutsisfixedbytheGovernmentaftermultipartynegotiations (growers,buyers,exporters,statestructures).In2008,forexample,thefloorpricewas200CFAF/kg.Ithasnever,however, beenpaidbythebuyerssincethemechanismwasintroduced in2000.Mostofthenutsareusuallyboughtfromthegrowers atapricethatis25%lower,oftenbecausegrowerssignpreharvestpurchaseagreements(inexchangeforloansfrombuyers,becausetheyneedaccesstofinancialmeansinthefaceof varioussocialproblems,etc.).Generallyspeaking,farmgate pricesfluctuatewidelyanddependontheworldmarketprice,

changesinthedollar-CFAFexchangerate,redefinedquality standards,thedemandfornuts,andsoon.Tradeisthemost visiblepartofthecashewvaluechainandconcernsmainlythe rawnutsexportedtoIndia,VietNam,Singapore,Malaysia, Indonesia,SriLanka,Thailand,China,etc.Itoccupiesmany stakeholdersagents,localdealers,transporters,customsofficials,financialinstitutions,publicqualityandstandardcontrol agents,internationalexportersforaboutsixmonthsofthe year.Internationalexportersarelimitedinnumberandcan heavilyinfluencethelocalmarketintermsofprice(AGRO BENIN, SAKSON, GK5, NOMAS, OLAM(COPA), SWISS BENIN, SAIPRITI, Btc, RALS COMMODITIES, NOOR Srlaccountfor75-80%ofthemarket).Asmentionedearlier, thetradeisstronglyinfluencedbynutscomingintothecountry fromneighbouringcountriesaround17,500tonnesin 2008accordingtoinformationprovidedbydealers.AtPAC, dealersconsiderthattheFOBpricesobtainedbyexportersare moreattractivethanthoseobtainedinneighbouringportsbecauseoftheacknowledgedqualityofBeninesenuts.Itis thatqualitythatpromptstheflowsobserved,thepercentageofwhichvariesfromoneharvestseasontoanother. Totalcapacityforprocessingrawcashewnutsis1,800tonnes annually(lessthan3%ofnationalproduction),mostlyby Afonkantan Benin Cashew(1,000-1,500tonnes/year). Processingremainsthesectorspoorrelation;itisrelianton privateinitiativesandreceivesscantsupportfromfinancial institutionsandpartners(GTZ, DANIDA, SNV, BMGF). Exporttaxesonrawcashewnuts,commonlyreferredtoas roadtaxes,amountto0.8%ofthestatisticalcustomsvolume andareafunctionofthevolumeexported.Otherwise,no exporttaxisofficiallyleviedonagriculturalandagriculture- relatedproductsatcustomsposts,inaccordancewithBenins financiallaws. Whilecashewnutsareharvestedinthecashewplantations, otherproducts,suchascashewapples,estimatedatmorethan 600,000tonnes/year(Dossou et al., 2008, Tandjikpon et al., 2009)arelefttorotforwantofthepossibilitytousethem. Theapplescouldbetransformedintobiofuel,juice,jamand ediblealcohol.Processingby-productssuchasshellsareused bythefactoriestogeneratetheenergyneededtoblanchprocessedkernels.Mostoftheseby-productsremainunused,however,forwantofanalternative.Otherprocessingwasteisused asanimalfodderbutnotinsuchawayastoformanorganisedandprofitablevaluechainfortheunitsconcerned.Inthe cashewsector,severaltechnicalandfinancialpartners,workingthroughprojects,programmes,NGOsandtechnicalstructures,haveprovidedorganisedandnon-organisedgrowers withdirectandindirectsupportforproduction,processingor marketing.Thisvariedinvolvementhasenabledthecashew sectortocontribute3%tothenationaleconomyand7%to theagriculturaleconomy,creatingjobopportunitieswith regardtoinputs,production,post-harvestactivities,transportation,processingandmarketing(Matthess et al., 2008).


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2.2

Illustration of the value chain and the marketing process

Atthemicrolevel,suppliersofchemicalinputs,equipment andpackagingaremorespecialisedinproductsrelatingto cottonandareforthemostpartbasedinthecountrysmajor urbancentres(Cotonou,Parakou,PortoNovo).Thenurseries provideseedlings,whicharemadeavailabletogrowersfor theirplantations.Thegrowersmayworkwithinanassociation(cooperative)ornot,buteachownshisplantation.Dealersandagentsareimportantplayerswhodrivethemarketing system,workingwithindividualgrowersorcooperativesof growers.Processorshandlesomeoftherawkernelssoldon thelocalmarketorexported.ExportsareorganisedbyseveralFigure 2.2.1: The stakeholders in the cashew value chainSpecific inputs Equipment Seed Fertiliser Phytosanitary products Packaging Production Nursery Plantation Maintenance Harvest Local Trade Organisation Storage Packaging Quality test

companies,chieflyAGRO BENIN, SAKSON, GK5, NOMAS, OLAM(COPA), SWISS BENIN, SAIPRITI, Btc, R ALS COMMODITIES and NOOR Srl.Theyhaveconnectionsto majordealerswhomovetheproducttoCotonouforloading attheport. Atthemesolevel,theplayersareforthemostpartstateactors andareusuallyinvolvedinsupervision,researchandvarious formsofsupport.TheyincludetheMAEPs INRAB, DPQC, CeRPA, SONAPRA andDANA,theEnvironment Ministrys Environmental AgencyandtheDGFRN,aswellastheTrade Ministrys DGCEandDGEI.Thefieldworkofthesevariousstate andnon-statestructuresisbackedbytechnicalandfinancial partnersinprojectsandprogrammes.Themostactiveatpresent

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Processing Post harvest Storage Shelling Roasting Packaging

Control Quality Standard

Export Quality test Shipping and transport

Private transporters Local equipment suppliers & dealers (SDI, SAMAC, Fruitex Industrie) Input distributors Seed producers Nurseries & cooperative Producers cooperative Primary procurement agents (1, 2, 3,) Producer cooperatives Dealers Industrial processors: Afonkantan Semi-industrial processors Small-scale processors Consignees

Exporters (Nomax, Agro Benin, Sakson, Btc, Afonkantan, etc.)

MICRO

Wholesale dealers

FENAPAB and Union growers Benin National Institute of Agricultural Research General Directorate of Forests and Natural Resources

Benin Environmental Agency Foreign Trade General Directorate

Directorate Promoting the Quality and Packaging of Plant Products

General Directorate of Customs and Excise Tax

Internal Trade General Direction National Society for the Promotion of Agriculture Regional centres to promote agriculture National Society for the Promotion of Agriculture Beninese Centre for Standardization and Quality Management Food and Applied Nutrition Directorate Export Development Association International Institute of Tropical Agriculture University faculties of agronomics Land and maritime transport Cotonou Autonomous Port

MESO

Projects, programmes, initiatives (GTZ, BTC, DANIDA, FAO, BMGF, NGO, SNV, AFD) Ministry of Agriculture, Animal Husbandry and Fishing Ministry of Labour | Ministry Environment & Protection | Ministry of Economy and Finance | Ministry of Development | Ministry of Industy Ministry Decentralization the communes National Chamber of Agriculture | Ministry of Trade |

MACRO

Benin Chamber of Commerce and Industry


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areGTZ, BTC, DANIDA, BMGF, ICCO, SNV, AFD, the International Fertilizer Development Center andtheMCA. ThemacrolevelcomprisesministriessuchastheMAEP, whichisinchargeofagriculturalpolicyandtechnicalsupervisionofproduction,theEnvironmentMinistry,whichprovidesenvironmentalprotectionandguidance,andtheTrade Ministry,whichhandlesmarketregulation. Inreality,twosourcesofcashewproductsconstitutethesupplyexportedviaPAC:nationaloutputandsuppliesofnuts fromneighbouringcountries.Therearetwolocalmarketing systems.Thesystembywhichindividualgrowersselltheir cropdirectlytoagentsorbuyers,andthebatchsellingsystem,

arelativelyrecentinnovationthatisstillbeingtested.The lattersystemallowsgrowerstopooltheiroutputandobtaina highertonnagewithaviewtodirectlynegotiatinginteresting priceswiththebuyer.Batchedsellingstillaccountsforatiny portionofthemarketcomparedtothefirstsystem,however. Ineithercase,morethan98%ofrawnutsreachtheexporters,accordingtocurrentdata.Theyareshippeddirectlyto processingfactoriesinAsia,wheretheyareturnedintokernelsfortheEuropean,AmericanandevenAsianmarkets. AminuteproportionofBeninsrawnutsareprocessedonthe spot.Thekernelsproducedbytheselocalunitsaresenttothe Netherlands(inthecaseofAfonkantan)orconsumedlocally orsenttootherunitsinthesubregion.

Figure 2.2.2: Economic illustration of the raw nut value chain for exported raw nutsProduction raw nuts Price (CFAF/kg) Commission (CFAF/kg) Transport to store Cotonou (CFAF/kg) Wholesale margin (CFAF/kg) Transit (CFAF/kg) Misc. costs (CFAF/kg) Export margin (CFAF/kg) Value added (CFAF/kg) % value added * The production cost per kg of nuts is not included in the calculations of grower value added. Source: Compilation of 2009 survey data. Production and farmgate sales 30 15% Middlemen and sale to wholesalers 25 11% 200* Collection of nuts 230 30 15 10 20 10 15 45 18% Export trade 255 Export 300 (FOB)

Batching and export sales

Loading and export


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2.3

Detailed description of the cashew production system

2.3.1 Production system Therawnutsareproduced,virtuallywithoutchemicalinputs, Figure 2.3.1: Map of cashew-growing areas in Benin byanestimated200,000growersacrossthecountry(Matthess et al., 2008).Theaverageareafarmedpercashewplanter mea uresbetween1and1.5ha.Therearebiggerfarms,though, s ofupto5ha,thatbelongtolandowners,economicagents, civilservants,etc.Beninscentralzoneandthesouthernpart ofnorthernareasgrowmostofthenationscropandproduce goodqualitycashews.Theyreceivesupportfrompublicinstitutions,projectsandprogrammesfinancedbythetechnical andfinancialpartnersinawidevarietyofareaswithlittle synergyforgreaterefficiency. CashewsareproducedinBenininanagroforestryland-use systeminwhichthecashewtreesgrowalongsideannual cropssuchascotton,yams,maize,cassava,groundnutsand sorghum.Thelandthatissuitableforgrowingfruitissituatedapproximatelybetween720N(thelineoflatituderunningthroughKtouinsouthernBenin)and1050N(the lineoflatituderunningthroughGogounouinnorthern Benin).ThisgeographicalbeltdoesnotincludetheAtacora chaininnorth-westernBenin(Tandjikpon et al., 2005). Generallyspeaking,exceptforthestateplantationsstartedin the1960sand1970sbytheNational Society for Forest Development (SNAFOR),ofwhichthereremainareported 2,000hatoday,almostallcashewplantationsbelongtoindividualsmall-scalegrowers.Thoseplantations,whichareconsideredcashcrops,featureaproductionsysteminwhichannual cropsaresystematicallyintegratedwiththecashewtreesfor muchoftheirlifecycle.Thelengthoftheintegrationdepends onthespacebetweencashewtrees.Thesuccessionofannual cropsdependsbothontheextenttowhichthegroundiscoveredbycashewtreesandsoilfertility.Thecropsrequiring themostlight,suchascotton,yamsandmaize,areusually associatedwiththebeginningofthecashewtreeslifecycle. Byintegratingannualcrops,growersareabletoreducethe costsofmanagingcashewplantations(maintenance,protection,etc.)untiltheystarttoproducefruit.Formostgrowers, workintheplantationsismanualandinvolvestheuseof tillageimplements(hoes,dabas,machetes,etc.).Growers withlargeplantationsuseanimalstotilltheland,inrare casesheavymachinery;inallcasesfamilylabourmakesan importantcontributiontocoveringoperatingcosts. Thereareroughlythreemainareasofcashewproductionin Benin (Figure 2.3.1):i)zone 1isconsideredtobegood cashewgrowingappearstoposenospecialproblemsinview ofthefavourableclimaticandgeomorphologicconditions; ii)zone 2,whichisfairlysuitableforcashewtreesbutwhere

theclimate(tworainyseasonsinthesouth)andgeological conditionsdonotallowthetreestoproducetotheirfullpotential;iii)zone 3,whichisfairforcashewtrees(Tandjikpon et al., 2008).

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2.3.2

Average plantation size

Themostrecentsystematicsurveyofcashewplantationsin north-westernBeninindicatesanaveragesizeof0.76haper plantationforanaverageof1.5plantationspergrower.These datacanbeextrapolatedtoallofBenin,exceptthecentral andsouthernregions,wheretheaveragesizeisprobably slightlysmaller.Ingeneral,thelargestareasplantedarebetween5and30ha,buttherearefewerofthem,andseveral plantationsare50hainsize(centralandnorth-easternBenin),(Tandjikpon et al., 2008).

2.3.3

Access to land

Whileinthenorthernpartofthecountrymorelandremains availableforcashewtrees,thesameisnottrueofthesouthern andcentralregions,wherethereisheavypressureontheland. Inbothcases,migrantsandwomenhavedifficultyobtaining accesstoland.


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2.3.4

Use of inputs

Thecashewsaregrownwithoutspecificinputs(fertiliser,phytosanitaryproducts),whicharenotavailableonthemarketor producedbyappropriateinstitutions.Thefewgrowerswho usechemicalfertilisersandpesticidesgenerallyhaverecourse toproductsusedforothercrops,inparticularcottonand vegetables.Theydothisbecausetherearenoproductsfor cashewtreesspecifically.Evenwhensuchproductsdoexist, inputimportersarenotparticularlyinterestedbecausedemand isnotstrongenoughtojustifygreaterinvolvementinthesector.Small-scaleproducershavedifficultyobtainingfinancing (purchaseofequipment,workintheplantations,harvest andpost-harvestactivities)andarethereforeobligedtosell theirnutsatpricesfixedinpre-harvestpurchasecontracts.

tree(www.anacardium.info;www.cashewinfo.com; Matthess et al., 2008).Lowproductivitycancompromisethecompetitivenessofnationalproductionifitisnotsubstantially improvedbymeansofappropriateinnovations.

2.3.6

Seasonal time sequence of integrated crops

Theperiodofintenseactivityforcashewproductioncorresponds totheleanfoodandeconomicperiod,whengrowershavelimited personalresources.

2.3.7 Ecological aspects Cashewgrowinghasapositiveecologicalimpactinthatit servestoprotect,conserveandreconstitutetheland.InBenin, cashewtreesareforthemostpartgrowninagroecological areasthataresuitableforgrowingcottonandyams.These twocrops,morethananyother,leadtosoildeterioration,as theforestsareclearedtomakeroomforthemand,inthe caseofcotton,theyinvolvethemassiveuseofpesticides. Cashewtreesareidealforreconstitutingdegradedlandand forcarbonsequestration.

2.3.5

Productivity

Thecashewplantationshavelowproductivity,between300 and500kg/ha,althoughthepotentialfortheplantmaterial currentlyavailableis1,000to1,500kg/ha(Tandjikpon et al., 2005).Becauseoftheveryhighdensityofmostplantations(>100trees/ha),theapproximateaverageis2to3kg/

Table 2.3.1: Seasonal time sequence for cashews integrated with annual crops Activity Production of seedlings Planting Plantation management / Maintenance and treatment Harvest Integrated annual crops Northern Benin South and central Benin Month Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.

Table 2.3.2: Distribution of work along the cashew value chain, by sex Value chain activity Sex Planting **** * Management and maintenance **** * Harvest * **** Transport * **** Post-harvest * **** Trade in raw nuts **** **** Processing * ****

Men Women

* - **** = Degree of involvement


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2.3.8

Gender aspects

2.3.9

Economic analysis of the cashew system

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Genderisamajorissueinthecashewvaluechain,withsocioculturalfactorsvaryingfromoneregiontoanother.Accessto landisamajorconstraintforwomenandnon-natives.InBenin,landisgovernedbythecustomarysystem,whichismore commoninruralareas,andthemodernsystem.Itischaracterisedbythepresenceofalandauthoritywhocontinuesto betraditionalandwhoismoreinfluentialinthecountryscentralandnorthernregions.Inheritancelawsaremorefavourable towardsmen,deprivingwomenoflandandconsequentlyof thepossibilitytostartaplantation.Ninety-fivepercentof plantationsbelongtomen,andtheaverageageofallplanters (menandwomen)is40to50years.Mendotheworkof plantingandmaintenance,asitrequiresagreatdealofphysicaleffort.Womenaremoreinvolvedinharvesting,sorting, dryingandtransportingtheproducehome.Bothmenand womenmarkettherawnuts,butthewomenarebetteratprimarynutprocurement.Inprocessing,womenaremoreoften ownersofsmall-scaleprocessingunits,becauseinvestment costsarelower,andmoreworkersinthesemi-industrialand industrialunitsarewomen.Overall,marketinganddistributionofprocessedproductsistheworkofwomen,whohave marketandconsumerexpertise.

Cashewtreesareusuallyplantedwithothercropsinan integratedapproach.Duringthefirst3or4yearsafterthe treesareplanted,theygeneratenorevenues.Duringthat period,thegrowerearnsanincomefromthecropsintegratedwiththecashewtrees,whichatthesametimebenefit fromtheinvestmentinthosecrops(workonthesoil,maintenance,manurespreadforintegratedcrops,etc.).Afterthe fourthyear,whenthecashewtreestartstobearfruit,the growersstarttoearnadditionalincomefromthetrees,ina proportionthatchangesovertheyears;cashewsbecomethe operationsmainsourceofincomeaftereightortenyears. Thelengthofintegrationwithannualcropsdependsonthe distancebetweenthetrees.Whenthereare10mbetweentrees, forexample,cropintegrationlastsonaveragesixorseven years,dependingonthetreesrateofgrowth.Thatrateisalso linkedtosoilfertilityanddependsonthegeographicalarea. IncentralBenin,forexample,therateofgrowthistwice asfastasinthenorth.Inshort,thenegativeyieldofthe firstyearsafterplantingexplainstheuseoftheagro-forestry approachintegratingthetreeswithannualrotatedcrops (cotton,yams,maize,groundnuts,black-eyedbeans, cassava,a.s.o.).

2.3.10 Cashew household income and poverty Theincomegeneratedbycashewoperationstendstobediverse, itscomponentsdependingonthedurationandareaoftheintegratedoperation.Inadditiontothemonetaryincomeearned fromthesaleofproduce,thecashew-growinghouseholdalso obtainsmaterialgoodsforitsownconsumption(food,wood forenergy,etc.).


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2.3.11 Organisation of growers/cooperatives Organisationsofcashewgrowershaveonlyrecentlystarted toemerge,asthesectorsshareofthelocal,regionalandnationaleconomieshasgrown.Accordingtotheinformation gatheredfromexistingorganisationsin2009,asubstantial numberofgrowershaveformedassociationsbutmanyofthem stillcontinuetobeindependent.Thereisonlyonefederation ofgrowerorganisations,FENAPAB,anditisorganisedinto fourURPAs,oneforeachcashew-growingregion.TheURPAs arerepresentedinthecommunesbytheUCPAs,whichare furtherbrokendownatvillagelevelintoUVPAs.Thelatter isthebasicoperationalunitfortargetedaction. The Atacora and Donga URPA(north-westernBenin)has 21,701growersin308cooperatives(UVPA)outofatotalof 35,700growerssurveyedintheregionin2008(Tandjikpon et al., 2008).TheZou and Collines URPA(centralBenin) has300cooperativeswithanestimatedtotalof56,516growers,butthenumberofmembersisunknown.TheBorgou andAlibori URPA (north-easternBenin)hasnoreliablestatistics,butthenumberofgrowerscanbeestimatedat60,000. TheKtou UCPA (south-easternBenin)has481growersin 28cooperatives.ThecommuneofKtouistheonlycashewproducingcommuneinsouth-easternBenin,itsoutputlimitedtoafewvillages.

2.4

Detailed description of cashew processing and tradingStructure of the processing and export businesses

2.4.1

Onlyafractionoftherawnutoutputiscurrentlyprocessedin thecountry,butinterestinthebusinessisgrowingamongsupportstructuresandintheprivatesector.Thestatisticsarevery incompletebecauseoftheinformalcharacterofsmall-scale processing.Itisestimatedthatbarely5%ofthenationalcashewoutputisprocessedlocally:2%bysmall-scaleunitsand3% bysemi-industrialandindustrialunits.Threecategoriesof processingunitsareused,asindicatedinTable 1.4.4: ndividualorgroupedsmall-scaleprocessingunitsthat i haveaverymodestcapacityoflessthan20tonnes/year, producingroastedkernelsforthemarket emi-industrialunitswhosecapacityislessthan150 s tonnes/yearandwhosetechnologyisbasedontheIndian modelbutwithmoremodestequipmentadaptedtolocal conditions ndustrialunits;theonlyonecurrentlyoperationalworks i fortheEuropeanmarketandisrunbyAfonkantan Benin Cashew inTchaourou(50kmsouthofParakou).

2.4.2

History and location of processing units

ThefirstcashewprocessingunitsappearedinBenininthe early1970s,whentheStatelauncheditscashewplantation projectwithfundingfromtheEuropeanDevelopmentFund. AshellingfactorywassetupinParakou(northernBenin)to transformtheproducefromtheplantations,mostofwhich wereonstateland.Itwasnotsuccessfulandsubsequently shutdownforreasonsrelatedtothemarket,productquality andfinancing.


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2.4.3

Processing capacity

Processingresumedinthelate1990s,whentheprivatecompanySt AGRICAL SrltookovertheParakou factory anda newfactory (St SEPT)wasopenedwithacapacityof600 tonnes/yearinSav,centralBenin.Theseinitiativesalsofailed: theoldfactoryneveroperatedandtheSEPTunitshutdown in2004.Freshattemptswerethenmade,andsomeofthe semi-industrialandindustrialunitsopenedatthetimecontinuetooperate,notablyAfonkantan Benin Cashew (capacity: 1,500tonnes/year)andGK5(capacity:80tonnes/year).Many GK5units(aboutadozen)haveclosedorareworkingatless thancapacity.

Employmentinmarketingistemporary(3to6months)but diverse:agents,dealers,transporters,salespeople,warehouse staff,customsofficials,loaders,insuranceagents,bankers,etc. Atpresent,thefiguresforthissectorareunclear,aboveall becauseofthelackoforganisationatthislinkinthechain andthenon-transparentrelationsbetweenthestakeholders.

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2.4.6

Competitiveness

2.4.4

Technologies used

ThetechnologyusedbytheprocessorsisinmostcasesIndian inorigin.Itcomprises:calibratorstosortrawnutsintofour categories;steamembrittlement;nut-shellingdevices(hand orfootoperated);dryingchambersfordryingshelledkernels beforetheyarepeeled;mechanicalpeelingconveyors(prepeelingfollowedbyhandpeeling,withsomeItaliancomponents);weighingdevices(sorting);vacuumandcarton packagingdevices;warehousebygrade,etc.Muchofthe equipmenthasbeenadaptedonthespot,anditsperformance(output)islimited;otherequipmentisimported(the caseoftheAfonkantan factory).

Ananalysisofwhytheprocessingunitsfailedpointsoverall tothepoorbusinessmanagementskillsofthepromoters, whodidnotmasterthevariouscostandexpenseparameters, difficultiesrelatingtoaccesstogoodtechnologyanditsuse (lowoutput),competitionwiththeexportsectorfortheraw material(nuts),thehighcostoflabourandineffectualstate support(taxsystem,creditandinputfacilities,marketregulationsinfavourofprocessing,andsoon).Themarketing ofcashewproducts,chieflytherawnuts,isthemostvisible partofthevaluechainandoccupiesseveralstakeholders (agents,smalldealers,exporters,transporters,brokers,etc.) foraverybriefperiod(JanuarytoMay).Duringthatperiod, thebuyersscourtheproductionareas,usingvariousstrategies toobtaintheproductatapricethatisusuallynotinthe growersfavour.

2.4.7

Organisational chain and business model

2.4.5

Job creation

Mostoftheworkersintheprocessingunitsarewomen. AccordingtothedatacollectedintheGK5unitinBenins centralregionin2008 (ProCGRN, 2008),andinviewof Beninscurrentestimatedprocessingcapacityof1,800tonnes (FBSPL, 2008),thenumberofworkersemployedincashew nutprocessinginBenincanbeestimatedat220,ofwhom 176arewomen.Byextrapolation,thenumberofworkers neededtoprocessthe116,398tonnesofrawnutsexported viaPACin2008canbeestimatedat14,226.

Ingeneral,accordingtoLematre 2003,Beninscashewsare notmarketedfollowingapre-establishedschemewithina regulatoryframeworkknowntoallthestakeholders.The Governmenthasneverthelessexertedsteadypressureonthose marketingcashewnutsinBenintostructuretheiractivities. Thishassparkedtheformationofseveralprofessionalassociationswhoseimpactonthesectorsorganisationisnotyet clearlydiscernible.Thecurrentlackoforganisationdraws dealers,whoareattractedbytheeasyprofitsandweakregulations.TheexportsectorisdominatedbyIndiansandPakistanisinformalcompanieslawfullyestablishedinBenin,butis poorlycontrolledbythepublicauthoritiesandnotverytrans-


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Becauseoftheopacityofthedomesticcashewmarket,its lackoforganisationandtheabsenceofinformationonworld prices,thegrowersaretryingtoorganiseinbasicgroups. 2.4.8 Price structure Ofthestrategiesused,batchedsellingisthemostpopular.It consistsof batchingtheharvestofthegroupsmembers Thebranchcompaniesreceivepurchaseordersfromtheir andsellingitinbulktoasinglebuyer.SeveralOCGsare headquartersandsetpricesinlinewithglobalmarkettrends testingthisapproach,withinterestingresults.Forexample, andtheUS$exchangerate.Thisexplainswhytheprice in2009,inAtacoraandDongadepartments,whichaccount variesduringtheharvestseasonandfromoneharvestseafor10%ofnationalproduction,OCGssold19.4%ofthe sontoanother.Whenthecropoutlookinthecountries 6,026tonnesofnutsproducedusingthebatchsystem,obwithprocessingcapacityispromising,exportersinBenin tainingdefactohigherearningsthanunderthetraditional andelsewhereinAfricaasktheirbuyerstoofferrelatively system(URPA/Atacora-Donga 2009).ButtheOCGshave lowprices.Theycancontrolthef lowofnutsbecausethey limitedfinancialmeansandarepoorlyorganised;theycanarefewinnumberandarepresentthroughoutthesubregion. notcompetewithlarge-scalemarketingoperations.Other Theexportersareveryfewinnumberand,becauseoftheir OCGsaskforadvancesfrommicrocreditorganisationstobuy sharedorigins,useaninformalprice-settingmechanism nutsfromtheirmembers.Thenutsarethensoldwhenthe throughouttheharvestseason.PricesatPACusuallyvaryby pricegoesup.

parent.Thisexplainsthedisparitiesinofficialstatistics.The quantitiesexportedsupplementsuppliesintheimporting countries,chieflyIndiaandVietNam,wheretheprocessing plantsareownedbynationalsofthosecountries.Indeed,the processingcapacitiesofIndiaandVietNamexceedtheirraw nutproductioncapacities.Theexportersarethetrueprice controllers.Theyfinancetheentiresectorandthereforehave thepowertosetthepriceintheirinterests.AlmostallexportersarebranchesofIndianmultinationals.

10CFAFperkilo,dependingontheexporter.Theexporters tendencytofunctionasacarteldoesnotworkinthemarketsfavourandisnotconducivetotransparency.Thebuyershavenoinformationontheworldcashewmarket(which doesnotexistperse,theonlyofficialmarketisforkernels) andareprefinancedbytheexporters;alltheydoisforward thepurchaseordersfromtheexporterstotheproductionareas.


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Table 2.4.1: Summary data on the processing units Processing unit Data Industrial (capacity >1000 tonnes/year) Afonkantan Benin Cashew Semi-industrial (capacity

cashew processing in benin

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