Reaping what is sown; improving contract farming to strengthen Senegal’s agriculture sector

Seynabou Fall, President of the Reseau des Producteurs de Semences et de Cereales (Network of Seed and Grain Producers) of Wack Ngouna, spoke of the benefits the cooperative has reaped as a result of the partnership agreement. Photo Credit: Africa Lead

In Senegal, yogurt, cereals, and grains are much more than nutritious staple foods. They are part of the country’s rich cultural traditions accompanying every significant marker in life: birth, marriage, celebrations, ceremonies, and rituals — even unto death. Agriculture is a key sector of Senegal’s economy, accounting for an estimated two-thirds of its export revenues and serves as the basis for food and livelihood for some 70% of its population.

With a focus on strengthening business practices in the agricultural sector in Senegal, Africa Lead and UNACOIS JAPPO (the National Union of Traders and Industrialists) a national private sector trade association with more than 70,000 members, organized a one-day workshop on the subject of contract farming and the potential benefits for farmer producer organizations and private sector agri-business. The objectives of the meeting were to provide information about the contract farming process, showcase a successful local example of a contract farming venture, and develop concrete recommendations about how to replicate the model.

The meeting, which was held on March 29, 2018 in Dakar, brought together 72 participants including representatives from the Ministry of Agriculture and Rural Infrastructures, the Ministry of Commerce Department of Interior Commerce, and technical and financial support institutions. Also present were representatives from farmer and producer organizations – most of whom were women working in production, trade and distribution. The workshop’s technical sessions were led by Africa Lead and moderated by Darietou Sow Coulibaly from the Operational Monitoring and Evaluation Bureau (BOS) of the Plan for an Emerging Senegal (PSE). Ousmane Sy Ndiaye, the Executive Director of UNACOIS JAPPO, Pierre Ndiaye, CEO of Mamelles Jaboot SARL, and Seynabou Fall, President of the Wack Ngouna producers association participated in the event.

The main objectives of this meeting were to provide information about the contract farming process, to showcase a successful local example of a contract farming venture, and come away with concrete recommendations about how to model and replicate this success story. This workshop capitalizes on the Best Practices contract farming models in the cereals (millet, rice and maize) sector recorded in USAID’s Feed the Future Senegal Naatal  Mbay and USAID/PCE ( Projet Croissance Economique/Economic Growth Project) programs.

In contract farming, a private sector firm provides farmers with inputs in exchange for the exclusive purchasing rights for the resulting crop. The meeting showcased the successful farm producers’-private business contract agreement developed by Mamelles Jaboot SARL, a local agri-foods company specializing in dairy and cereal grains processing and production, and the rural producers cooperative, the Reseau des Producteurs de Semences et de Cereales (Network of Seed and Grain Producers) of Wack Ngouna. Both parties indicated that the arrangement using the contract farming model has created “win-win” for both sides.

Ousmane Sy Ndiaye (right), Executive Director of UNACOIS JAPPO, spoke about how the contractualization model opens up new business opportunities in the agricultural sector.

For Mamelles Jaboot SARL, a firm committed to purchasing cereal grains locally rather than importing, the agreement called for it to provide financing for the Wack Ngouna Cooperative to purchase inputs for 600 hectares of farmland. The results have been so successful it led the company to open a second processing plant in the town of Thies, providing jobs to more than 80 women. According to Seynabou Fall, president of the Wack Ngouna Producers’ Cooperative, as a result of this contract agreement over the past five years, from 2013 to 2018, the cooperative’s finances have increased from 10 million FCFA (approximately US$ 19,000.00) to around 100 million FCFA (US$190,000).

Participants discussed how to replicate the model, as well as the inherent challenges faced by small farmer groups such as financial constraints. The financial and technical structures represented at the meeting, in particular the Caisse Nationale de Crédit Agricole du Sénégal (CNCAS) (The National Agricultural Credit Fund of Senegal ) pledged its support to help expand this contracting process through capacity building of the various stakeholders, financing production campaigns, and funding construction of seed bank storage facilities. In closing, the participants recommended that the contract agreement be made more widely available and suggested the government provide more assistance, such as providing grain production inputs and to reduce the value added taxes (TVA) on processed products.

Africa Lead will continue to provide support to UNACOIS JAPPO and Mamelles Jaboot SARL in their continuing promotion and development of contracting in the different agricultural value chains by supporting and helping to facilitate the establishment of agricultural alliances and partnerships.

Pierre Ndiaye (center), founder and CEO of Mamelles Jaboot SARL, shared his company’s experience with developing a contract with a local producers’ cooperative.

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