Warrantage System Empowers Palm Oil Producers

 

Aziz Evenanmian has produced and processed palm oil for nearly two decades in the commune of Akpro-Missérété in Benin. He used to sell his oil individually in the surrounding markets, but now, through opportunities offered by IFDC’s ACMA2 project, Evenanmian aggregates his palm oil with other producers.

Evenanmian heard about the ACMA program for the first time in 2017. What initially drew his attention was the warrantage program that experienced spectacular results in some communes.

“I knew about the cereals warrantage, but the red oil warrantage was new to me. I told myself that it was important that my commune also experimented with this,” he said.

Unfortunately, the ACMA program worked only on the fish sector in Akpro-Missérété during its first phase; palm oil was not taken into account. Nevertheless, Aziz sought to know more.

So, Aziz conducted his investigations, leading him to counterparts in Adjohoun, a town located 20 kilometers from Akpro-Missérété. In Adjohoun, where the ACMA program has been assisting the warrantage process since 2015, the warrantage committee shared its experience with Evenanmian, who put the knowledge to work and began increasing his revenue.

After becoming well-informed, Evenanmian met the ACMA2 supervisor of the department of Ouémé, Benjamin Houéto, for more information to see if a warrantage program could be initiated. Evenanmian also shared his new knowledge with his peers (producers, processors, and traders) in Akpro-Missérété and was able to convince them to participate.

This began the initiative to implement warrantage at Akpro-Missérété with the support of the ACMA2 program. Since ACMA2 targets producer organizations and agricultural business clusters (ABCs), the ABC of Akpro-Missérété was initiated to begin implementing warrantage. This self-organized ABC took shape in May 2018 with a membership of 35 producers and processors, including 14 women. For the August 2018 campaign, they stored nearly 13 tons of palm oil and benefited from 3.7 million FCFA in credit from the financial institution ALiDé. The players contributed to build a tank to hold the oil; the tank has the capacity to hold 25 tons. Pre-storage oil quality control issues were supported by the ACMA2 program. A first destocking was done, and some of the oil already has been sold.

Very impressed and proud of this initiative, the ACMA2 staff is making arrangements for the formal training of ABC members. This is the only ABC since 2014 to be self-established. This initiative will draw into this community all the support systems of the program: access to agricultural inputs and innovations, market linkages, and professionalization through improved access to financing, information, and agricultural communication technologies and through members’ participation in the Ouémé-Plateau department’s Concertation Framework (CCIC) .

ACMA 2 is a four-year project funded by the Embassy of the Kingdom of the Netherlands in Benin and implemented by IFDC. It aims to improve the food and nutrition security of rural populations in 28 municipalities in the departments of Ouémé, Zou Plateau, and Collines.

%d bloggers like this:

Warrantage is a system of rural credit which allows for a producer organization (PO) and/or its producing members to obtain a loan by putting in a guarantee from their products  that can increase in value. The purpose of this credit system is to avoid the sell-off of producers during the period of plenty when prices are at their lowest and to give them the opportunity to access credit. During the deposit of the products, the microfinance institution grants credit by paying the 80% of the value of the deposited product. In the lean season a few months later, the same product is sold at a very attractive price, and the rebates are paid to the depositors after repaying the credits contracted.

Composed of actors from the public (mayors and municipal technical managers) and private sector (ABC representatives), CCICs are frameworks for exchanging ideas, initiating dialogue, and developing proposals for improving the business climate.