Cashew BeninToward quality supply for the emerging local processing industry
Dahomey Cashew – District Unions of Cooperatives
Background
• Important cash crop for smallholder farmers (besides cotton) and source
• Annual production > 100,000 tons of cashew nuts; 95% is exported
• Cashew farming concentrated in the northern and central regions of Benin
• Local processing capacity has been reinforced (building new processing & upgrading existing plants) during the last years
Business relationship
• Farm: District unions of cashew farmers’ cooperatives
• Firm: Local processing plant “DahomeyCashew” (raw cashew kernels for export)
• Mostly informal supply arrangements
• Competition between local processors and foreign exporters
Challenge area 1: Product & Market
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← Disagree Agree →
Challenge area 1: Product & Market
Farmers Firm
Quality criteria are known by
farmers
Quality criteria are easy to comply
with
Prices offered by other buyers are
more interesting
Information on world market prices
is easy accessible and trustworthy Convergent views
Divergent views
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← Disagree Agree →
Challenge area 3: Farmers' Organization
Farmers Firm
Challenge areas 2 & 3: Firm & FarmerOrganisation
Farmers and firm agree that
there are opportunities for the firm to provide embedded
services to farmers
Farmers are well organized to discuss
and organize supply
Leaders regularly consult members and
take in account members’ interests
FOs are willing to promote quality
standards and support traceability
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← Disagree Agree →
Challenge area 4: Farmers
Farmers Firm
Challenge area 4: Farmers
Farmers are able to supply the required
volumes when prices offered are competitive
Farmers use appropriate production
technologies (volumes)
Farmers and collectors use appropriate
post-harvest technologies (quality)
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← Disagree Agree →
Challenge area 5: AgriBusiness System
Farmers Firm
Challenge area 5: Agribusiness System
Farmers have easy access to
(public) extension services
Farmers can easily supply
themselves with quality inputs
Farmers are satisfied with (public)
extension services
Farmers can easily supply
themselves with storage bags
Seasonal credits are vital for
regular and quantity supply by farmers
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← Disagree Agree →
Challenge area 6: Communication and Planning
Farmers Firm
Challenge area 6: Communication & Planning
Farmers agree with the prices offered by
the firm
FO members agree on sales conditions as
decided by FO which takes appropriate measures to respect ‘contract’
The mechanism for fixing prices is
satisfactory
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← Disagree Agree →
Challenge area 7: Delivery and Performance
Farmers Firm
Challenge area 7: Delivery & Performance
On-time payment to farmers by firm
Side selling by farmers
Side selling is a necessity for
farmers
Conclusions (1)
• Prices– Firm and farmers agree that other buyers often offer higher prices;
hence ‘side selling’ by farmers
– Farmers are not satisfied with the price setting mechanism and feel that they aren’t well informed about market prices
• Quality– Firm thinks that farmers know about quality criteria but don’t apply
good agricultural practices
– Farmers think the opposite
• Joint opportunities for the way forward– Share information on fluctuation of market prices
– Negotiate with MFIs seasonal credits for FO (buying from members)
– Develop premium mechanism for rewarding quality, volume & on-time supply
Conclusions (2)
• Agribusiness system– Farmers have access to public extension but firm and farmers
agree that this isn’t providing relevant & quality services
• Organisation of farmers as suppliers– Farmers and firm agree that information flows within FOs and
decision-making involves members
– Firm thinks that the FOs are able to improve organisation of supply
• Opportunities for the way forward– Develop extension services (firm, third party or FOs) with focus
on inputs and practices that determine ‘quality’
– Support FO for developing economic services for members
FDOV/PPP “Cracking the Nut”http://www.rvo.nl/subsidies-regelingen/projecten/cracking-nut