Cover_Rebuilding West Africas Food Potential

XXXVIII Rebuilding West Africa’s food potential

all countries are at the same stage of development. In some countries there is little post-production

processing capacity – for example, Burkina Faso, which places priority on the introduction of

processing technology to build up the initial processing capacity. By contrast, countries like Nigeria

and Ghana have a more highly developed agriprocessing industry and therefore place greater

priority on improving the price incentives and access to credit and on fostering a favourable business

environment.

Staple food crops cover a wide range of products. In this section, we group six of the most important

commodities from the region into four broad categories. These are:

(i) Staple crops with huge growth potential, both regionally and internationally, which are subject to

two-way trade (as imports and exports) (oil palm);

(ii) Staples with huge production deficits and large import dependency but with large potential for

expanding domestic supply (rice);

(iii) Staples with large potential for enhanced production and productivity and great potential to feed

the agro-industry, given the multiple market uses (maize, cassava); and

(iv) Staples with large subregional coverage and critical importance for food security, but with low

productivity due to policy neglect, despite a huge potential for transformation into commercial

value chains (sorghum, millet).

Oil Palm value chain – Ensuring inclusiveness of small farmers and small and

medium enterprises along with demand-driven sector expansion

The oil palm sector in West Africa has strong growth potential due to increasing demand, both

domestically and internationally. The strong economics of scale of oil palm plantations favour large-

scale investments and create a bimodal market structure where a few large-scale plantations coexist

with a large number of small and medium-sized producers. Oil palm production in West Africa largely

follows this bimodal market structure across the main producing countries (Cameroon, Cote d’Ivoire,

Ghana, and Nigeria). The oil palm value chain is thus privately-run, with the government playing

an indirect supportive role, encouraging outgrower schemes as the preferred model for smallholder

inclusion. A study from Ghana showed that the outgrower scheme is leaky, with frequent side-selling

(or contract-breaking) problems as participating farmers complain of little control over input (fertilizer)

prices or the fresh fruit bunch prices they receive. In this case, the absence of a participatory platform

to establish prices, coupled with the weak negotiating capacity of farmers (who are not organized into

groups), combined with the possibility for farmers to sell on the open market, all contribute to the

frequent occurrence of side-selling.

The main lesson to draw from this case is that the public can do more to correct the existing market

failures and to facilitate conditions for greater transparency in the palm oil market. Among the possible

interventions is to even out the playing field between large and small-sized mills by creating investment

funds targeted at small and medium-sized oil palm mills and tied to commercial arrangements with

small-scale producers. These investments would expand a mill’s capacity, improve product quality and

yields and ensure greater procurement from small-scale producers, both men and women. The second

possible intervention is to allocate funds to support the autonomous creation of oil palm producer

groups and encourage greater coordination capacity in order to ensure better access to credit, improve

market opportunities and enhance producer groups’ bargaining capacity with oil palm processors.

These lessons and required responses also apply to other oil palm-producing countries, to the extent

that they have the same market structure and their smallholders face the same impediments to market

participation.