Palm Oil Warrantage - An Inclusive Financing and Collective Marketing Tool for Improving Actors’ Incomes
Abstract
This material summarizes a study conducted by the ACMA program 2013 on the supply of agricultural products, specifically focusing on the production and marketing of palm oil in the Ouémé and Plateau departments of Benin. The study highlights the organizational structure of actors involved in the oil palm sector, including Village Groups of Oil Palm Producers (GVPPH), Communal Union of Oil Palm Producers (UCPPH), and Regional Union of Oil Palm Producers (URPPH), aimed at overcoming challenges related to fertilizer supply, improved plant material, and market competition. The study reveals that despite the commercial opportunities offered by Nigeria, the marketing of palm oil from Benin remains underutilized. The lack of a well-structured organization for product and by-product marketing and informal trade relations leads to fragmented offers and weak bargaining power for individual producers, processors, and traders. The study identifies limited access to credit as the main constraint for palm oil marketing, citing issues related to accessing finance through Decentralized Financial Systems (SFDs), lack of information, the reluctance of SFDs to finance agricultural activities, and a lack of tangible guarantees. To address these challenges, the ACMA program facilitated the implementation of warrantage, which provides easier access to working capital credits and improves production capacity for excluded actors. The program adopted a do-it-yourself approach, empowering direct actors to independently organize and conduct warrantage operations. The study highlights the positive impacts of warrantage on market participation, income improvement, and product quality. The warrantage implementation process involved multiple actors, including producers/processors, traders, ALIDé (a financial institution), former Communal Agricultural Development Sectors (ex-SCDA), and supporting NGOs. Local committees and communal warrantage committees were established to manage the warrantage operations. The study emphasizes the role of the ACMA program in providing prerequisites, raising awareness, facilitating interrelationships between actors and ALIDé, capacity building, and supporting sales market prospecting.
Description
Keywords
Agricultural products, Capacity building, Awareness-raising