This chapter explores how strategies for developing a processing industry in Senegal are being pursued. In light of the debates presented in the previous chapter, how is this industry developing and what are the benefits it brings to participants in the value chain? Who is involved and how do local processors contribute to upgrading the sector?
All over Senegal there are small cashew processing industries, but the overwhelming majority of these are informal and artisanal in nature, mostly sold at the roadside, bazaars or streetcorners. The great exception is the Enterprise Works programme in the Casamance. Introduced in 2001 in Ziguinchor, this Washington-based NGO, largely funded by USAID, has implemented a programme to develop small-to-medium scale, semi-industrial cashew nut processing in Senegal . The programme is innovative in that it has introduced Indian and Brazilian manual processing technology that is easily replicable in the local context. Apart from training people in the production of international quality cashew kernels, they also train interested processors in business management, marketing and labelling. While not directly subsidising their processors, they are instrumental in organising access to trade fairs and microcredit from various state and non-state banks. The goal is to create a network of self-sufficient, small- to medium-sized businesses to develop within the realities of the Senegalese domestic market and eventually for export. The following diagram explains the technology used and the complex procedure involved in producing a high-quality, exportable cashew kernel.
The technology used currently allows for only medium- to large-sized nuts to be processed into kernels. Therefore, nuts are selected for size and weight, the smaller ones being sold to traders for export.
New shelling machines based on Indian technology currently being introduced are able to cut even smaller nuts.
Steps 2 and 3
After being selected for size, the nuts are steamed for 50 minutes (left) and then let out to dry for two days in the sun (below)
The nuts are then shelled: first the nut is cracked with a machine, and then the kernels are picked from the shells. It is very important to wear protective gear (latex gloves or vegetable oil) as the shell oil is very caustic.
International markets, as well as upscale domestic demand, seek whole kernels. These machines, which are adapted from Brazilian technology, allow approximately 80% whole kernels vs. 20% splits and brokens. No other processing technology used at the formal or informal level inSenegal has achieved this count. In Senegal , wholes are sold for up to 10 $/kilo, whereas splits and brokens for less than 5 $/kilo (in CFA). In the U.S. , the world’s largest market, wholes are sold for over 20 $/kg.
The empty shells are used as full for steaming the nuts or simply thrown away. Over the long run, this could pose a minor environmental threat, as the acids and oil are toxic when burned or left on the ground where animals graze. In India they are processed for CNSL, which is used as a high-grade wood varnish for boats and even as brake lubricant for aircraft engines.
Several local processors are exploring ways to use the shells more productively to reduce the environmental hazard they pose.
Shelled nuts are then dry-heated in a wood-fuelled oven at 70 degrees centigrade for 7 hours. The man standing to the left is Elimane Drame, currently the most successful processor in Ziguinchor.
The oven-dried kernels are then skinned. This is the most laborious process and requires delicate handwork. Women are usually employed for this.
In India , the skins are further used for medicinal and industrial purposes (tanning), but this is not yet possible in Senegal
Further processing includes roasting in vegetable oil and salting, which increase value added.
The processed nuts are then weighed and sealed for sale at domestic supermarkets, hotels, shops or private distribution
Markets for artisanally-processed cashew
Most artisanally-processed cashew nuts, roasted by hand, are deemed unhygienic and sub-standard in terms of international quality demands. Nevertheless, they sell well all over Senegal , usually in markets and by the roadside. This could change if Enterprise Works technology, with its high quality production and marketing, proliferates.
A Profile of The Processors
Their numbers have been expanding constantly that by August, 2003 there were at least 16 processing units in operation or under construction. These units vary in size and character, but overall they each employ between 8 and 15 people. The units may be classified in four categories: small enterprises, cooperatives, urban and rural-based. They can be any combination of these, but the typical combinations are the urban-based small enterprise, the rural-based small enterprise and the rural-based cooperative. Of the 16 units, 11 are rural based, 3 of which rural cooperatives, and 5 are urban-based small enterprises. Below is a description of the more important enterprises that typify this emerging sector, each in its own unique way, followed by an analysis of their characteristics, challenges and trends. Although there are many more processors, each in a unique setting, for the purpose of this essay those described here are already representative of the whole in several ways. Map 2 indicates the location of each processor reviewed herein.
1 and 2: The urban-based enterprises: Lamine Coly, Mamadou Coly and Elimane Drame
Elimane Drame is the first processor to open up a unit with Enterprise Works in the Casamance, and he is consequently Secretary of an informal association of all the processors within the programme. His unit is based in the town of Boutoute (just three km from Ziguinchor) in a four-room house owned by his grandfather, who is a highly-regarded and influential small businessman in the area. An educated electro-technician and not having anything to do with cashew nuts before opening his unit, Drame was attracted to the industry by the lucrative profits to be made in combination with the employment he can generate. He markets most of his nuts in Ziguinchor stores and hotels, but has begun selling in hotels in the Gambia and, through connections he established using the internet, he has even exported informal quantities to Morocco and Tunisia . His unit currently employs eight women and four men, most who are in their early twenties. Most of these employees are from the town of Boutoute , and three of the boys are Elimane’s cousins. He hopes to expand to at least twenty employees by 2004 as he increases production.
Lamine Coly is currently the most ambitious and the fastest expanding of all the processors. He started operations in 2002 and is already the programme’s largest processor in the Casamance. Based out of his own home in Ziguinchor, Coly employs upwards of 15 employees, at least 10 of which are women. He sells mostly at the Ziguinchor airport, and in Dakar at petrol stations and boutiques. Having obtained loans from several banks and organisations, he plans on doubling his capacity by next year, employing upwards of 30 people. Already an experienced businessman with a small telecentre and a boutique, Coly now concentrates almost exclusively on marketing his nuts between Dakar and Ziguinchor, entrusting the unit to his manager.
Girls skinning kernels at Mamadou Coly’s unit
Mamadou Coly (no relation to Lamine), also based in Ziguinchor, holds the next largest unit after Lamine’s. The only urban-based processor with his own orchard, he runs a tight family business out of his home, employing young men and women from his natal village nearby.
Having lived and worked in several West African countries, he became familiar with cashew processing while living in Cote D’Ivoire . He hopes to eventually transfer his unit out of Ziguinchor to his village where he can benefit from being near his orchard and the farmers from whom he procures raw nuts, cutting down on expenses in the process.
3 and 4: The rural-based cooperatives: Senghalene and CPRA-Affiniam
The village of Senghalene , already discussed in Ch. 3, has a processing unit that fits within a cooperative of 108 cashew farmers spread over three villages. The purpose of the unit, according to the President of the association, Joseph Diamacougne, is three-fold:
- to provide a venue for shielding farmers from low and fluctuating prices for raw nuts
- to provide employment for village youth
- to raise revenue for overall village activities, including women’s and youth groups, emergency funds for farmers, and overall village development
The unit is nevertheless autonomous from the farmers’ association, but it relies on farmers to supply it with their raw nuts. This it achieves through various incentives. First, it offers a higher-than-market price for nuts. This price was fixed early during the season at 300 CFA/kg. Traders in Senghalene never offered more than 250-275 CFA/Kg in 2003. 250 CFA was to be paid in cash, with 50 CFA withheld for at least 6 months as a temporary investment in the processing unit and as a pool for emergency loans within the association. However, the nuts supplied first had to be selected by the farmers, which can be a laborious process. Therefore, not all farmers sold their nuts to the processing unit, preferring instead to sell at a lesser price to traders and another local processor who do not place such quality demands. Overall, the Senghalene association produced 13 tonnes of nuts in 2003 and allocated 5 tonnes to the unit for processing. Moreover, as an officially registered G.I.E ., the processing unit was the first of all rural-based processors in 2003 to get a micro-loan from the local Credit Mutuel branch. The existence of the unit since November, 2001 has provided the impetus to improve the overall quality of nuts produced in Senghalene, as it has in the other rural-based processing units. Farmers involved with the processing unit either as suppliers or workers have explored different methods to improve production in their orchards to produce more of the kind of nuts the processing unit requires. Some of these interventions include experimenting with grafting, planting selected varieties and various forms of pest control.
The chief problem with the Senghalene unit is marketing. For the time being, they have relied on urban processors like Elimane Drame to whom they sell wholesale, who then distribute under their own brands.
In the village of Affiniam , the local Catholic mission, CPRA, has set up a processing unit. This entity has long marketed agricultural products, including juices, fruit, wine and jams in its Ziguinchor retail outlet as well as within networks of the Diocese across Senegal . The head of the unit, known affectionately as Frére Richard , is a priest from Quebec directing the mission for over twenty years. The CPRA’s stated mission is to provide as much employment to as many people as possible in Affiniam. They enjoy funding from various NGOs, including Caritas and CIDA, the Canadian International Development Agency. These agencies provide them with credit to buy raw nuts and develop their marketing infrastructure. However, they are so far cautious, and have only recently opened their unit, taking a ‘wait-and-see’ approach to find out if the market absorbs their product sufficiently. If so, they hope to extend processing opportunities within a network of several dozen village-based work groups with whom they cooperate on agriculture and education-related projects across the Bignona Department.
Peeling (left) and shelling (right) at the CPRA in Affiniam
5 and 6: The rural enterprises – Yarang and Kamarakounda
The most common type of processing unit is the village enterprise. Typically formed out of a working group of several men and one president, they differ from village-based cooperatives only in that they run more as for-profit entities than as instruments of community development per-se. However, the impact they have on their communities is similar in many ways to that of cooperatives like Senghalene.
The unit in Yarang, located in the Kolda region and right on the border with Guinea Bissau, is owned by one Malan Sadio, the elder brother of the village chief. He explained that the prime motivation for investing in and opening the unit was providing employment to his family and other villagers, and the temptation of a lucrative, profitable business. With two shelling machines his unit employs four boys and four girls. They currently sell at the weekly loumo in nearby Goudomp and wholesale to the Ziguinchor-based urban processors. Most farmers in the village cultivate cashew, but it is not the only source of revenue. There are rice fields, gardens and palm wine. With the processing unit, however, Mr. Sadio and his brother, the chief, have been communicating regularly with farmers, requesting them to select seed for improved varieties and larger nuts. As the village is small, in Sadio’s opinion, many hold the processing unit in high regard as a source for revenue in the form of local employment.
In the village of Kamarakounda , which is more than 10 km from the nearest paved road, Famara Diandy, the local schoolmaster, has recently opened a new processing unit. By Mr. Diandy’s and the village chief’s estimates, this village produces more than 50 tonnes of nuts yearly. As schoolmaster enjoying an important socio-political standing in the village, Diandy had announced to villagers his intentions of opening a processing unit, and many farmers promised to sell him their better quality raw nuts. He explains that the benefits to the village come first to his family and then to other villagers he might employ. He also hopes he will be able to pay farmers more for their nuts than what they are currently getting from the local Mauritanian traders. The chief gave him a plot of land to build a house for the processing unit.
By contacting farmers on a frequent basis he has established a new rapport with them suited to benefit the needs of his processing unit. He has also lobbied the Eaux et Forets office in Ziguinchor to distribute superior variety Costa Ricain seedlings to the villagers; he encourages villagers to select their seed for planting. As with the other rural-based processors, he enjoys certain advantages over urban processors in that his overheads are lower, especially since he is a cashew farmer himself. One of the more expensive inputs in processing is wood to heat the drying oven, and this is not a problem for him. On the other hand, he has no market of his own and has to sell wholesale to Lamine Coly, Mamadou Coly and Elimane Drame, at least initially. His ability to procure raw nuts for processing will depend entirely on whether or not he is approved for a micro-credit loan.
What are the benefits the processors bring?
First and foremost, in line with Cramer’s (1999), MacMillan and Rodrik’s (2002) and Martin’s (1997) basic suppositions, the processing brings with it employment in an area depressed by over twenty years of economic stagnation owing to the separatist conflict. While designing its programme around principles of profitable private enterprise, Enterprise Works has also created a basic guideline for employers on how and how much to pay their employees. Most of the processors follow these guidelines, especially when Enterprise Works’ good will is often contingent on processors adhering to certain agreed-upon standards. Moreover, as small enterprises, all units employ relatives and/or people from the neighbourhoods they are operating in, so a certain sense of familiarity is present. In the typical unit, employees work eight-hour days at least five times per week. They are paid per kilo of nuts processed, and as they master their skill, their wage increases accordingly. Moreover, all of the urban-based processors provide their employees with at least one meal. Owing to the physical stress incurred when operating the machines, shellers, who are normally men, are paid higher than other employees. Depending on their ability to crack nuts without breakage, shellers average 15,000-25,000 CFA/month, favourably comparable to wages they would earn working in the informal sector or as employees in the commercial sector. Skinners, who are normally female, earn between 12,000 and 20,000 CFA/month. Many of these women have no alternative (if they are lucky to find alternative employment) but to work as housemaids for between 10,000 and 12,000 CFA/month, a job that requires seven days from morning until night. In the village-based units, this alternative is practically non-existent. The benefits are not limited to mere wages and employment for community members. One rural processor in the village of Djilakoune stated that villagers find it exciting that “something is happening in the village. It gives them a sense of pride.a new activity.the awareness of something [innovative] occurring.”. All the processors interviewed expressed the social standing they obtained in the community in terms of their ability to provide employment and make an innovative product as the most important motivation for investing in their enterprise next to the potential for lucrative profits.
One important aspect to note of the employment generated is the high percentage of female employment. Women’s nimble handiwork is seen as indispensable for peeling and classifying. At least three of the urban-based processors, including Lamine Coly and Elimane Drame, prefer to employ women over men because, according to Drame, “women are more reliable, serious workers and demand less.” Physical strength is an important reason why men are employed primarily as shellers. Recently, Enterprise works has introduced a new shelling machine that requires less physical strength to operate. Moreover, Lamine Coly already employs two women as shellers, dispelling the common belief among processors that women are not suited for the job. However, other processors do not share a general preference for female over male employees. In Senghalene, Joseph Diamacougne actually employs men and women as peelers. He claims that owing to the particular culture of the village, women are not as available as men for work, and that they often follow religious and social obligations that hinder them from working reliably. Consequently, the association prefers to employ men at the unit, although several women do work there as peelers. This view is supported by Jean-Daniel Djikougne, a processor in the nearby town of Oussouye . Djikougne claims women often request time off for weeks at a time to either perform local animistic religious rituals or care for family members. Nevertheless, he, like most processors, employs only women for peeling.
Comparing the different processor typologies
The urban-based and rural processors each have advantages and disadvantages over each other that highlight strategies and trends in how the industry is developing in the Casamance. These trends also underline how cashew processing as a small-scale, semi-industrial model differs from traditional industrial models described by MacMillan and Rodrik (2002) and Cramer (1999) in their analyses of the Mozambican cashew nut processing industry.
Whereas urban processors have clear advantages at the marketing end, rural processors advantages in terms of capital costs at the production end. To begin with, the urban processors, who are mostly based in and around Ziguinchor, have more capital resources at their disposal. As mostly educated entrepreneurs with access to information on opportunities, they were the first to get involved in the Enterprise Works programme. They also quickly captured local markets and have been much quicker at expanding production to access other lucrative markets in Dakar and Banjul . This is not only because they were the first to process, but their urban connections and logistical position afford them much quicker access to these markets. Elimane Drame uses the internet to find clients: such access is unheard of in places like Kamarakounda or Affiniam, the latter which has only one telephone line. Having established themselves as leaders in marketing, now other processors – especially those who are rural-based – depend on them to market for them.
However, rural processors are not necessarily ‘out of the loop’. Most of the rural and urban processors, under the guidance of Enterprise Works, enjoy access to credit from various local banks and international agencies. The urban processors have higher overheads: they typically have higher costs in terms of raw nut procurement, rent of facilities and other expensive capital inputs such as wood used to fuel the drying ovens. In an urban setting their activities at the factory are limited: one had attempted to burn cashew shells to feed his nut steamer, but neighbours complained of the pollution and he was forced to use expensive wood instead. None of the rural processors have to pay rent for the processing facilities, whereas several urban processors rent houses to base their operations. Most of the urban-based processors do not own their own orchards and must buy all of their raw nuts from traders. As farmers in constant contact with other farmers, rural processors complain less about availability of quality raw inputs. Over the long run, as already mentioned, evidence indicates the rural processors are changing the habits of cultivation of cashew nuts in the areas where they are active. As their numbers increase and their industries (hopefully) establish themselves, this trend might only strengthen.
In terms of farmgate prices, it is the rural processors who seem to be affecting the chain at the producer level more than urban processors. This is especially more evident in places like Senghalene where farmers are formally organised. Rural processors are by nature of their position as farmers interested in keeping the price of raw nuts higher, whereas urban processors benefit much more from lower farmgate prices. Every processor interviewed expressed the viewpoint that it would be a great thing to be able to offer farmers more for their produce, but simultaneously, at current market prices for processed kernels, they would not be able to make any profit were the price of raw nuts to again reach the levels seen in 1999-2000. Moreover, it is important to note that this industry is still emerging and that it has not yet altered the chain on a grand scale: the vast majority of nuts continue to be exported raw and will presumably continue as such for the foreseeable future.
Artisanal nuts in Kaolack
A more immediate concern is how the Casamance processors affect the market for artisanal nuts. This is especially relevant in light of the fact that many women and children make a living processing nuts by roasting them at home and selling them by the roadside, at bazaars and markets. In terms of quality, however, most of these women do not compete: their kernels are often scorched, unclean and broken. As Enterprise Works processors expand their market share in Ziguinchor and other areas that were until recently the exclusive domain of artisanal processors, many of them do not have the resources to join the Enterprise Works programme. Already, several women in Ziguinchor have given up artisanal processing and simply turned to selling higher quality nuts from Enterprise Works processors.
Here, a woman peels artisanally-roasted nuts for sale in the Kaolack market. Currently, none of the Casamance processors markets in this region. As of January, they would like to begin training potential processors and introducing their technology to this area. It is not clear what effect they will have on the market, although in Ziguinchor, artisanally-processed nuts are being squeezed out by E-Works’ more sophisticated, superior-qualtiy products.
However, this does not spell doom for artisanal processing in Senegal . In key northern regions, the single largest market for processed nuts is still held by Acasen, a Dakar-based company owned by two women from Benin . The first company to formally commercialise cashew kernels in Senegal , they have been buying all their kernels from women’s associations based in the Kaolack and Fatick regions for over ten years. Through close linkages over time with 12 of these groups, which involve an estimated 300 women in six villages, they have developed a product which sells well in key domestic markets north of the Gambia . They distribute an elegantly packaged brand of artisanally-processed nuts in a chain of petrol stations in Dakar and other major urban centres from Saint Louis to Kaolack. In 2003 their total distribution reached 10 tonnes. Enterprise Works claims they have lower overheads and can sell at lower prices than Enterprise Works processors. They also enjoy strong name recognition in Dakar as they were the only brand marketed until recently. However, since last year Lamine Coly has been selling in Dakar grocery stores and petrol stations. If Enterprise Works expands its activities to the north of the Gambia , Acasen has expressed interest in some form of collaboration, perhaps encouraging the women they buy from to adopt the new technology if it proves superior to their own methods.
The single greatest challenge to Casamance processors (and all over Senegal , if the operation is to expand as planned) is to open new markets. Even though urban processors like Lamine Coly and Elimane Drame currently find it difficult to satisfy domestic demand for their products, the domestic market in Senegal is finite, and as they are actively trying to avoid hostile competition with each other, they are seeking further venues.
With new processors all over the Casamance opening their units monthly, and without significant local markets of their own, a logical step would be to seek export markets. Drame is exporting small quantities to the Gambia and Morocco . In theory, both European and American markets are open to West African nuts: there are no quotas or tariffs, and the nuts only need to pass simple phyto-sanitary tests for aflatoxins and hygiene. The chief problem is accessing distribution and retail outlets. Most distributors in Europe will only buy large quantities in bulk, preferring to capture more value added in terms of final processing and branding. Between transport costs and the high competition from Indian processors, Casamance exporters are unlikely to be able to compete. Without an upgrade in production quantities and significant investment, this venue represents a difficult barrier to cross. Nevertheless, at least two independent investors – one, a Lebanese businessman based in Dakar, and the other an ex-Peace Corps volunteer – have expressed interest in selling limited quantities to European and North-American niche markets.
The quantities the Casamance currently produces do not yet warrant traditional bulk exportation by sea-container to European markets, air freighting to France and Italy to interested distributors for ethical trade organisations might be an option and is currently being explored. As such markets open up, providing a “release valve” in a tight domestic market, even more potential processors could be encouraged to enter the business, further stimulating growth of the sector and encouraging the changes in the value chain from producer through to exporter discussed above. In the following chapter, a clearer picture of how the cashew processing industry can and should develop in Senegal emerges through an examination of neighbouring Guinea Bissau, where Enterprise Works has been working on an identical programme over the last three years.