Chapter 3: The chain of producers to exporters in the Casamance

As mentioned in the introduction, the global value chain (GVC) approach comes from the analysis of manufacturing (Gereffi, 1994) but has since been extended to agriculture (Gibbon, 2001). In his analysis of agro-commodity chains, Gibbon distinguishes between buyer-driven and trader-driven chains. In buyer-driven chains, for example horticulture, the retailers set the parameters for others in the chain: this was shown in some detail by Dolan and Humphrey (2001) for the high-value vegetable chain from East Africa to the UK . The quality demands that retailers in the E.U. have placed over producers translates into strict controls from these buyers/retailers reaching down to the producers; the chain is strongly coordinated by these retailers in an effort to optimise flow and quality of production and supply. Often this has resulted in the exclusion of smaller producers from access to the international market.

In contrast, the cashew chain from African producer to Indian exporter is trader-driven. In this type of chain, traders do not use their power to co-ordinate the activities of other enterprises in the chain. They take a less proactive approach and are mostly interested in volumes and maximising their trading opportunities. Therefore, there is much less coordination of the chain from the top, and the chain can be seen as disorganised and prone to inconsistencies in supply and severe price fluctuations.

There is less literature related to trader-driven commodity chains, and none on cashews from Senegal. In order to fill the gap, this chapter analyses the organisation and characteristics of the cashew chain in the Casamance. Who governs the chain at which level? Who carries out which roles? Related to this, how are tasks divided according to gender? These are common questions on the agenda of GVC research. In order to understand the cashew chain, one needs to add further questions concerned with the instability of the chain. The literature rarely mentions the fluctuating characteristic of prices in commodity chains, preferring to see movement along the chain as a series of fixed transactions. However, this price volatility is hugely important for participants in the chain from producers through to exporters. How do price fluctuations affect the chain? Which steps are being taken to cope with these fluctuations and by whom?

Understanding how the chain works helps to understand which steps can be taken to improve its performance and increase the overall benefits for its participants. The chapter asks in particular how and why organisation at the local level matters for improving the chain and countering fluctuations. Local producers at one end and Indian exporters at the other often attribute the problems they face to the middlemen. This is why the final section of this chapter investigates whether middlemen help or hinder the development of local producers

The Value Chain in The Casamance

Box : harvesting apples and nuts

Text Box:

Diola women in the village of Senghalene (Dept. Oussouye) harvesting nuts and apples: this is a laborious process whereby women spend the entire day separating apples from nuts and pressing the apples into cashew wine.

The cashew chain in the Casamance includes many different kinds of participants from the producer all the way to the exporter. The chain starts at the individual, typically smallholder farmer and ends with the exporter based either in Dakar or Ziguinchor. Participating in this chain is an immeasurable number of different actors, and their presence highlights the importance of this crop to the general population.

To begin with, cashew is mostly a male-dominated crop in terms of property and commercialisation. The overwhelming majority of property owners and growers are men. Most of the buyers, traders and collectors within the chain are men. However, women and children are an integral part of the chain at lower levels. Harvesting is highly labour-intensive and largely a female activity. Typically, if a farmer does not have enough manual labour within his own family he will hire women using a customary “2+1″ system: two days of collecting for him, and a third day for the collector. These women can opt to resell their collection to the farmer or another buyer, or process the nuts and apples for domestic consumption or resale in local markets. Most Casamance farmers emphasise the commercial value of the raw nut, but for several non-Muslim ethnicities that make up at least 50% of the total population in the Ziguinchor region, harvesting the cashew apple is almost as important. Indeed, among the largely catholic and/or animist Diola, Mancan and Manjako ethnicities, cashew was first cultivated for its apple, and it was only within the last two decades that they have switched emphasis to the nut once its commercial value was discovered. Women and children spend entire days in orchards collecting nuts and apples, after which they separate the nuts and then crush the apples into a fast-fermenting wine. The pressed pulp is then used as animal feed or fertiliser. The wine is consumed locally but also sold in volumes to buyers who come from as far away as Dakar . Some households make a strong distilled liquor, cana , which is also commercialised at the national level. Women and children will process nuts artisanally for sale in local markets, the standard price of which is 5000 CFA/ kg. This activity is potentially very profitable, but fewer women process because it is extremely intensive and tiring, and still less have direct access to a viable market, which is either an urban bazaar, a weekly loumo, or at certain roadside checkpoints along major thoroughfares.

Mancan women processing cashew wine

In summary, during the harvest, which begins in early March and ends mid-July, most household members of a cashew farm are involved in some capacity in the chain. This is made even more possible by the fact that the cashew harvest occurs in the late dry season before other field crops are planted. Therefore, farmers and their households can devote themselves to cashew without necessarily sacrificing work on planting millet, rice or peanuts.

Nuts being weighed for sale at a Ziguinchor storehouse 

 

Beyond the farm, the single most important chain is that for export of raw nuts. This chain involves people of all backgrounds and interests in an effort to move the nuts from the farmer all the way to port. At the head of the chain are the exporters, all based in Ziguinchor for the last several years. There are currently four large-scale exporting companies represented in Ziguinchor and in addition to these are several representatives from other Indian-based trading companies. All come from South India , and they export their nuts to factories in Kerala. Some are on a more permanent basis than others, but typically they will spend from between four and six months of the year in Senegal before returning to India after the harvest. After September many will be based in East Africa and come back to Senegal in February. The exporters are dependent on forward contracts from processors in India and hire large-scale buyers. Depending on the financial strength of these local buyers, the Indian exporter will either contract them or hire them on a freelance basis. Boubakar Bodiang, a large buyer and one of the most important in Senegal , is one buyer who dos not have enough capital to work independently. Bound by contract under George Varguez to deliver a certain quantity, he relies on a cash injection to begin purchasing nuts. After he has delivered the promised quantities, Mr. Varguez pays him his cut, typically 10% of the cash order. Therefore, if Bodiang is ordered to buy one tonne at 250 CFA/kg, he is given an injection of 250,000 CFA, and then a 25,000 CFA premium upon delivery. This system is employed to ensure loyalty and timely delivery of goods. The same system is applied by these large buyers further down the chain, who hire their own network of smaller buyers. Again, the smaller buyers are either contracted by the large buyer or freelance, depending on their financial strength. Each large buyer will hire up to one dozen smaller buyers who are often given a cash injection to purchase in the bush on motorcycles or even bicycles. After delivery they are given their cut, which is typically 10-15% of the purchase price. During harvest, it seems that anyone and everyone involved in commerce or interested in earning some money becomes a buyer, from boutique owners to shoeshiners, many of whom are inexperienced in this trade and subsequently risk losing. What often happens (further discussed below) is speculation along the chain, as buyers at all levels try to increase their margins, often resulting in delayed deliveries, lost profits and mutual negativity between elements of the chain.

As in many African countries, poor infrastructure in terms of roads, communications and political instability has rendered this multi-tiered system of buyers and traders necessary in the Casamance. Indian exporters and large buyers are only interested in procuring large volumes and cannot afford to travel directly to each farmer for a few hundred kilogrammes of nuts. They also do not know the remoter areas as well as local buyers, and because of the political insecurity brought about by the rebellion, they will not venture into certain areas.

Box : Signs of Conflict in the Casamance

 

The long-running conflict in the Casamance has hindered cashew production by up to 40%, according to Eaux et Forets . Many farmers and displaced refugees are reluctant to go to their fields, as both rebels and military have mined them. Consequently, harvests are lost and orchards abandoned. Signs like this on the schoolhouse in the coastal village of Diembereng warn people to avoid fields and orchards suspected of being mined.

Why prices have been fluctuating

Within Senegal , the chain is shaped and influenced by a combination of external and internal factors. From an internal standpoint, there is a lack of free-flowing information and coordination all along the chain. Insufficient public action at the producer end and limited access to information further downstream keeps producers unaware of their rights and responsibilities within the commodity chain. Poor infrastructure and a certain level of political instability due to the separatist conflict have impeded production and trading in many areas. External influences determining prices and sales include international currency markets and demand from Indian processing factories.

The principle exogenous factors affecting the chain are fluctuating prices. The fluctuations are caused by changes in the dollar exchange rate and demand by buyers and processors based in India . Cashew is grown around the globe from Indonesia to Brazil , and major changes in production in one country or region will often have a strong effect on producer prices worldwide. In 2000 prices for raw cashew nuts plummeted owing to decreased demand by Indian processors, who were able to buy more nuts from Indian orchards after producers there had been increasing yields. Those prices began to creep up again in 2002 after Indian orchards yielded poor harvests . Further, these fluctuations have happened against a continuous rise in demand for processed kernels in developed markets, although their prices have also decreased (but less so than raw nut prices) over the last two or three years. This last trend can be explained by increased processing activity in Vietnam and Brazil , the latter which dominates the American market.

In general, producer prices start low at the beginning of the season and wind up higher by the end. This is partly explained by the fact that when the harvest season starts, buyers/processors in India will not yet have established contracts with exporters based in West Africa . They throw out a minimum price to maximise anticipated margins. Once initial collections have been confirmed in Ziguinchor, the importer in India will contact his buyer in Europe or any other final market to give figures for quantities. Then, he might send an inspector to Ziguinchor to confirm nut quality. Once the contract to buy from Ziguinchor is confirmed, the exporter based there will be under pressure to buy nuts to complete shipments that must not wait, and he will instruct his collectors to pay more to procure the nuts if they are in competition with other buyers (this is almost always the case).

In 2003, the sharp fall of the dollar has been the source of considerable anxiety among traders and exporters in Ziguinchor. The cashew kernel market is traded in dollars, and as the CFA is pegged to the Euro, a lower dollar means the exporter in Ziguinchor will be forced to lower prices paid to collectors and ultimately farmers. His contract is signed with Indian importers towards the beginning of the season in dollar amounts. He will face other pressures from his collectors below whom he usually pre-finances. They are in competition with each other and will try to raise their seller price with him.

Suresh Kumar in his Ziguinchor office

At the farmgate level prices are even more unpredictable and a cause for concern among farmers who cannot predict what they will get for their harvest. Speculation is a reality at all levels of the chain, from farmer to collector through to exporter. Pre-financed middlemen try to speculate with farmers on prices to maximise their margins. They often count on farmers not knowing the dynamics of the market downstream, and prices are determined often by hearsay and rumours. Often buyers are in a position to take advantage of farmers who are needy and are pressed to sell low for some rice. At the farmgate level, sellers will speculate by holding back collected stock in anticipation of higher prices. Suresh Kumar, an Indian exporter, explained that the trade is often disrupted at the export level in Ziguinchor when buyers lose out on speculation and wait for better prices downstream, or farmers refuse to sell when they think prices will increase. In one illustrative instance last year, he had a load of 30 tonnes from a village which he had agreed to purchase for 350 CFA/kilo. At the last minute the village representative (who was not a farmer himself, according to Kumar) demanded more than 400 CFA/kilo, and withheld the sale. Eventually, the rains came and the season ended, and the same representative was forced to sell the nuts at 300 CFA. Kumar claims that sellers at the village level know little about the market dynamics further downstream and the effect a falling dollar has on the exporter’s ability to purchase, and they often throw out unreasonably high prices, which blocks commerce. Kumar is quick to explain that he would much prefer to negotiate with farmers’ association representatives rather than village leaders, as the former represent their constituency better, are effective bargainers and are more knowledgeable of market dynamics downstream. However, in the Casamance, unlike in some other cashew-producing regions of Africa , there are very few cashew farmers’ organisations, and the chain is not governed by a central marketing board that oversees prices.

Indian exporters meet periodically and fix a buying price to try and stabilise farmgate prices and encourage the smooth procurement of nuts. When prices are agreed upon, their collectors are ordered to buy in the bush at the specified price. Speculation by their collectors is thus inhibited, which has the ultimate effect of ensuring nut procurement. In 2003, Kumar says exporters have met four times and managed to bring down the farmgate price from 300 to 200 CFA in accordance with the falling dollar. By the end of the harvest in mid-July, the price had stabilised to a maximum price of 250 CFA as the dollar did manage to recover somewhat.

For 2003, another significant influence on producer prices in Senegal has been the large amounts of nuts crossing the border from Guinea Bissau. While smuggling has been a reality at least as long as the Bissau government instituted export taxes on raw nuts in the 1990s, new controls imposed this year on the buyer chain have led to marked increases in cross-border traffic. It is difficult to say with accuracy how much of an effect smuggling has had on prices in Senegal, but it appears the ready availability of cheaper and often higher quality nuts from Bissau, the price of which at the border never exceeded 250 CFA in 2003, has helped keep prices at or below this figure.

Responses and Developments

In such a situation a logical step would be for horizontal development of the cashew sector to smooth out ‘kinks’ in the chain that lead to broken deals, lost profits and above all lower producer prices. As primary participants in the chain, it would appear that farmers might defend themselves from fluctuating prices by uniting into associations that would help them fix prices. In other more advanced cashew-producing African economies such as Tanzania , cashew farmers are organised into associations and benefit from government sponsorship in terms of technical advice, extension and protection of the sector. Consequently, their production levels per hectare and prices per kilogram have increased. It is also in the government’s interest to help develop the chain first because so many people depend on it for their incomes and second because the government might be able to exact some badly needed revenue from the sector. At least in the Ziguinchor region no such interest by the government or organisational trend among farmers has yet happened on a grand scale. Until 1998, the only farmers’ association organised for cashew planters in the Casamance was in the town of Simbandi , in the Kolda region. One of the reasons is that cashew is still a relatively recently commercialised crop, and neither the government nor NGOs have yet taken interest in the organisation of the value chain with the same intensity as they have with other cash crops like peanuts. Another is the complex cultural and ethnic configuration that typifies the Casamance (especially in the Ziguinchor region), which often renders cooperation among farmers more difficult. However, this situation of fragmented, disorganised farmers is starting to change across the Casamance. There are pockets where farmers have organised themselves in an effort to protect themselves from unpredictable markets and what they perceive as exploitative buyers. The most prominent example for the Ziguinchor region is the Senghalene G.I.E, which is described below. In Kolda, farmers associations are now becoming more visible, thanks to the interventions of PAEF/K and Promer. The former is a Canadian-funded NGO for the advancement of agriculture and rural livelihoods and has embarked on an extensive program to organise farmers into associations and improve their negotiating power with buyers. PAEF/K activities highlight a different approach to the development of the cashew value chain in Kolda than the efforts being undertaken by Enterprise Works in the Ziguinchor region. Whereas Enterprise Works has focused exclusively on processing and value addition for Ziguinchor, PAEF/K has chosen to focus on the first link in the chain, the farmers, before exploring possibilities of value addition.

The Senghalene G.I.E

This farmers’ association of 108 cashew farmers is interesting for the Ziguinchor region in that it organised itself strictly as a response to low prices for cashew nuts. Since 2002 they have also opened their own processing unit in a bid to further capture value added and get higher returns for their production. The G.I.E is founded and headed by Joseph Diamacougne, a French-educated Agronomist, and is based in a village outside of Oussouye. Over 95% of households are represented in this association, and farmers from at least two other nearby villages are also members. So far, they are the only association of its kind in the Department of Oussouye and could provide a blueprint for other villages seeking higher returns from their cashew nut production.

Even though indigenous varieties had grown wild in the area for centuries, Diamacougne explains that cashew had been introduced formally to the area in the early 1960s by an Ivorian forestry administrator posted in Oussouye who brought seeds from Cote D’Ivoire . Seeing that the crop grew and produced well, he began to encourage local farmers to grow it and use for local consumption. At first villagers took little interest, but by the 1980s interest had grown through the local commercialisation of cashew wine and spirits. By the end of that decade, the first collectors of nuts had appeared. Prices evolved slowly, starting at 50 CFA/kilo and reaching their high of 500 CFA in 2000 before collapsing to current levels of 200-250 CFA.

Diamacougne and other principle farmers became aware “of a sense of being exploited” because collectors from Ziguinchor would pay different prices to farmers for the same quality and quantities: one would get 170 CFA, and his neighbour 125 CFA. Therefore, Diamacougne began to alert villagers about the exploitation they were facing. He convened a meeting in 1998 to get villagers to take action in three parts:

•  farmers were to meet at the moment of harvest to agree on a single selling price based on information on prices in Ziguinchor

•  everyone was to bring their nuts to a single point of collection in the village

•  young village men were to assist people to bring their nuts to the collection points

Joseph Diamacougne (foreground) in a new collection point in Senghalene

Either through coincidence or as a direct result, prices had soared to over 450 CFA by 1999, and everyone was now receiving the same price. According to Diamacougne, farmers had obtained better leverage to negotiate prices with collectors who would no longer risk losing large and quickly obtained quantities.

The farmers’ association became formalised only after they became interested in processing their nuts. This arose as exogenous developments broke the Senghalene farmers’ bargaining power in 2001. By 2000 cutthroat competition between buyers left only two Ziguinchor-based buyers in the area. The village managed to negotiate a deal to sell all their nuts at 500 CFA to a buyer early on in the harvest. However, this buyer claimed to run into financial difficulties with his Indian boss in Ziguinchor, and the deal was broken. The village decided to store their nuts and sell the following year, but by that time nut prices collapsed to less than 200 CFA, and more than 15% of their nuts were destroyed by pests during storage.

It was one of the area buyers, Moise Bassene, who alerted Diamacougne about the possibility of linking up with Enterprise Works in 2001 to process nuts locally. The Senghalene G.I.E. saw processing first as an opportunity for overall village development and second as a way to insulate farmers from shocks in prices. Unfortunately, other village groups in the Ziguinchor region do not yet exist at this stage, but it is foreseeable they may emerge through some future government and/or NGO intervention, or organically as happened in Senghalene.

Farmers’ associations in Kolda

The Kolda region, although not yet as important a producer as Ziguinchor, is steadily increasing its output. There, not as many efforts are as yet underway to develop a processing sector as in the Ziguinchor region, but the cashew sector is being developed from the ground through a Canadian-funded project, PAEF/K. Starting operations in 2000, in 2003 they have organised nearly 700 cashew farmers into 8 farmers’ associations within a thirty-kilometre radius of the capital (the town of Kolda ). According to Papa Baidy Sy, a technical advisor to the project, this initiative is a bid to increase farmers’ bargaining power over “intermediaries who are making excessive profits over farmers.” First, the associations are to guarantee a unified minimum price to their members, after which a delegated representative negotiates with buyers. Some associations are asked to invest in creating storage facilities at strategic pickup points to improve efficiency and encourage large-scale sales to attract larger buyers and thereby avoid smaller middlemen.

According to players all along the value chain from exporters like Suresh Kumar to NGOs like PAEF/K, it is a lack of information on the ground about the dynamics of the chain further downstream that hurts farmers the most. Therefore, PAEF/K plays a pivotal role by accessing information on world prices for raw nuts and relaying these to the farmers’ associations. With this information the farmers work out a price that is fair. This year, the Dakar purchase prices at warehouses were reported to hover around 400 CFA. On this basis, PAEF/K worked out a farmgate price of 250 with the farmers’ associations, based on expenses incurred by transporters and buyers from the Casamance all the way to Dakar . PAEF/K also contacts large buyers directly and connects them with the farmers. This is intended to have the effect of streamlining the buyer chain by cutting out middlemen and passing at least part of the benefit to the farmers.

This year the attempts to obtain higher farmgate prices failed. The largest association, the Dioulacolon G.I.E., comprises over 270 cashew farmers in an entire county, with a total production output of 70 tonnes. Its president, Ali Baldé, claimed that a large buyer based in Banjul reneged on a promise to buy at a specific price, and owing to financial pressures related to the approaching planting season, farmers capitulated at the last minute and sold to middlemen at prices much lower than they had hoped for. Nevertheless, as this G.I.E and the others within the PAEF/K scheme are recent creations, Mr. Baldé is confident that next year his farmers will have stronger bargaining powers, especially if they obtain a special association loan from the Credit Agricole bank.

Left: A gardener at the PAEF/K orchard displays improved variety seeds the organisation has been distributing to its new farmers’associations.

Right: The PAEF/K cashew nursery in Kolda with over 70,000 seedlings for distribution

In the next years, PAEF/K plans on developing processing capabilities with these associations which might take the same functions as the Senghalene G.I.E. described above: capturing higher value added at the village level and securing a higher price at the farmgate. Sy says they have a whole team created for the purpose of exploring development of the cashew sector in terms of processing and marketing of value-added products. For the moment, PAEF/K has no concrete plans to extend the project to the Ziguinchor region.

Other viewpoints: Are middlemen really to blame?

A collector peddles a bag of cashew from the bush at a shop used as a collection point along the Kolda-Ziguinchor highway.

While organising farmers into associations is good from the perspective of keeping the flow of goods from producer to exporter regular and efficient, the militant viewpoint expressed by PAEF/K and exporters alike that middlemen are largely to blame for exploitation of farmers and the chaos in the supply chain is insufficient in describing the complex reality on the ground. In the literature, hostility towards middlemen is an old tradition and can be traced back to Lenin, who paints them as exploitative extortionists (see Schmitz, 1982). However, in recent decades, studies have countered traditional notions of middlemen as “exploitative” of producers. Weijland (1991) demonstrates how middlemen are necessary for rural enterprises to access markets. Her econometric study, based in Indonesia , shows how middlemen enabled rural producers to get higher incomes (Weijland, 1991).

This view is supported by evidence from the Casamance. Moise Bassene, a field consultant for Enterprise Works and a large buyer of cashew nuts with extensive experience in the trade, has been instrumental in helping many local farmers organise themselves to get better sales prices on their nuts as well as setting up processing units in their villages. He agrees with Indian exporters in that farmers do not know very much about the chain downstream, what quality is being sought in term of raw nuts, and the difficulties and risks exporters are faced with. He believes that it is impossible to be a farmer, middleman and exporter at the same time – it is too complicated and too much work. Therefore, each should occupy their place in the chain and concentrate on their mutual responsibilities to keep the chain running efficiently, that everyone involved can benefit.

A farmer should know how to produce quality nuts and be informed about the dynamics of the chain downstream, the costs incurred by each participant in the chain, from middlemen to transporters through to exporters in Dakar or Banjul . This will inhibit uninformed speculation on the part of farmers and help to stabilise farmgate prices to a certain extent. A middleman will know where to procure nuts and the quantities and deliver them reliably to elements further downstream. Exporters are generally knowledgeable about what they want. Mr. Bassene, who has worked in a number of African countries in the cashew nut trade, points out that in places like India (the world’s number one producer of cashew nuts), farmers are more informed about nut quality and how to produce them than buyers. Conversely, in Senegal and Guinea Bissau, it is the exporters (i.e. the equivalent of high-end buyers in India ) who are more informed about the right quality for production than the farmers. Moise says farmers in this region plant lots of cashew but in reality they know little about its proper cultivation. However, he points out that this situation will change as farmers get to know their crop better and organise: they have only been farming cashew extensively within the last 20 years at most, and in the Casamance they never really benefited from government involvement in the form of extension and technical assistance as they had for other cash crops such as peanuts.

The Senghalene G.I.E is a stellar case in point: as they have evolved, they are learning about different ways to improve the quality and performance of their crop. In their case it is because they have a processing unit that requires that quality, as their processing equipment is not able to shell smaller nuts. For other farmers, it will be to get good leverage with buyers, who can move the higher quality nuts downstream faster. In any case, exporter demands alone do not appear to encourage farmers to plant improved varieties or improve farming techniques as long as the farmers offer nuts harvested at maturity; the linkages between exporters and farmers are weak. While exporters would prefer higher quality nuts in terms of size and weight, the high demand from India allows them to buy most of what farmers have to offer. Curiously, traders and exporters alike do not admit to paying premiums for the higher quality nuts, defined as higher kernel weight and/or size, but they buy and ship these nuts more eagerly. Although impossible to confirm from research for this paper, one could conclude that ultimately this should have an effect on the overall price exporters offer. At the very least, traders will compete with each other for the higher quality nuts and be more likely to pay a higher farmgate price within the boundaries set by exporters. As will be shown in Chapter V, local processing in the Casamance places more direct demands on producers that encourage improved farming techniques and higher quality nuts.

Mr. Bassene does not accept the accusations by exporters and NGOs like PAEF/K that middlemen are exclusively to blame for exploitation of farmers and low farmgate prices. He points out that exporters want to bypass middlemen and get lower prices at the farmgate. The chain has developed rapidly over the last few years. Until a few years ago, the Indians were based in Dakar or Bissau and rarely ventured into the bush. They relied exclusively on intermediaries to bring the nuts straight to them. As prices increased, the exporters made a move to bypass middlemen and come closer to the farmgate by basing themselves in Ziguinchor and Kolda. The middlemen are now squeezed between exporters and farmers and their margins are tighter. In general, middlemen are closer to farmers and depend on them more than the exporters.

“At the end of the season, the exporter leaves the country, but the middleman has to stay here with the farmer. They cannot afford to exploit them [the farmers] as much because they depend on them for their incomes and daily livelihoods. They live among them. The exporters do not. That’s the bottom line.”

Ali Baldé, the president of the Dioulacolon G.I.E., concurs with this view. He expressed unease at PAEF/K’s negative bias towards middlemen, especially since these are often members of his community and family. Middlemen are also a necessary and useful component to link farmers with exporters and large buyers. Exporters are not familiar with the bush as are middemen. Especially in the Casamance, it is only middlemen who risk venturing into remoter areas that are fraught with instability owing to the long-running rebellion. An exporter with a mandate to ship several thousand tonnes cannot be expected to collect small quantities from dispersed farmers living far from a collection point along a main road. The village of Kamarakounda (Dept. Ziguinchor) lies along the border with Guinea Bissau and is ten kilometres away from a paved road. The village is ringed with military posts and is in an area that has seen frequent firefights between rebels and the Senegalese military ever since the rebellion began. As of 2003, annual cashew nut production in the area is estimated at close to 50 tonnes. Thirteen Mauritanian merchants based closer to Ziguinchor have moved to the village and opened three boutiques this year (2003) in a bid to tap into the local cashew economy. They will buy cashew nuts from local farmers and store them at the boutiques. Several of the villagers acknowledge that as a result, there are common goods available in the village now that previously were available only closer to the paved road. As the season progressed, villagers had been waiting for a higher price to sell the bulk of their harvest, yet since many were strapped for cash and food, they sold small quantities to the Mauritanians in exchange for rice and other necessities.

Whatever the case, organising the chain to improve efficiency of flow seems to be a logical trend in efforts to maximise gains for producers and traders. It is a form of horizontal development of the cashew sector as touched upon by Gibbon (2001). If the evidence from Senghalene and Kolda is anything to go by, it should help farmers improve production levels and quality, as well as increase their knowledge of the chain further downstream. The chain could be then said to be relieved of kinks that disrupt the flow of production between elements of the producer-trader chain and sometimes result in net losses for participants involved, from farmers to exporters. With a smoother, more efficient flow of produce, there is less risk attached to speculation and insufficient communication between traders and producers.

Horizontal development of the chain is only one trend in developing the cashew sector. Equally important, and the main focus of this paper, is upgrading along the chain in terms of higher vale added through primary and secondary processing. Both are being actively promoted in the Casamance: not only does processing offer the possibility of more revenue and employment, it also changes the nature of the value chain at the producer level, further stimulating horizontal development of the entire sector. However, the development of a processing industry is not a given and is fraught with internal and external constraints. Theorists involved in debates about the development of commodity processing and upgrading vertically along the value chain are not in agreement as to whether or not or even how this path is to be pursued. In the following chapter, this debate is discussed, followed by an analysis of the emerging cashew processing sector in the Casamance.

Those who study commodity chains point to a limited amount of analysis. Gibbon (2001) and Carr (2001) note that trader-driven chains like the cashew are harder to trace and define than the global value chain for garments and other retailer-driven chains.

Gibbon (2002) points out that because Indian nuts are harvested at different times than nuts in East Africa , Indian demand for African nuts should remain high at appropriate times of the year. This issue becomes even less important when one takes into account that cashew nuts, if stored properly, have a longer shelf life than other commodities exceeding one year.

The latter concentrates on promoting the production and marketing of lucrative agricultural goods in villages, from cashew nut processing to honey and cashew apple jams and syrups.

He is also the youngest brother of the spiritual leader of the Casamance separatists’ movement (MFDC), L’Abbé Diamacougne Senghor

Widely regarded in the region as an expert in cashew trade, he is now a technical consultant for Enterprise Works

According to the schoolmaster, rebels once entered the village in 1997 and shot six young men for undisclosed reasons

The chief himself is the largest producer with 10 tonnes.

However, Mauritanians are commonly seen as socially and economically self-contained units, spending little and integrating only to a limited extent with the Mandink villagers. Their social functions outside of commerce are nevertheless beyond the scope of this paper.

In the case of cashew, secondary processing involves roasting, flavouring and packaging for retail distribution.

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