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Grain commercialization by Malian cooperatives: A Market of the Future

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The right strategy, and especially a collective approach, not only improves the products and preserves them better, but also cuts losses and gets the farmers better prices.

Project background

At the dawn of the Malian independence in 1960, the government’s interventionist policy for agricultural trade advocated excluding the private sector from the primary sector, strict restrictions in the associative sector, monopoliesincluding a government monopoly with exclusive purchasing privilege, strict pricing and margin control, and import and export regulation via a license and quota system. Until the end of the 1970s, Mali’s grain policy managed the entire agricultural cycle, from production to marketing, with priority given to meeting the needs of urban consumers. Farmers were restricted to obligatory grain deliveries to public and para-public organizations, at prices set by the government, or they would face sanctions. The main consequences of this government-run monopoly system were the loss of flexibility, creativity and innovation in agriculture, the impoverishment of the masses, the lack of economic opportunities for farming communities, and grain production that only met internal demand.

Early in the 1980s, the government agreed to drop its monopoly and implement a program to reorganize the grain market (Programme de restructuration du marchécéréalier [PRMC]). The program opened the door to a more liberal economy, which fostered access to an increased supply of more affordable grain, resulting in stronger competition from the private sector, the free movement of grain between the country’s regions, the liberalization of importation and better coordination among donors.

Yet grain farmers had a long way to go on the path to free enterprise, which came with many difficulties along the way. In order to pay their taxes or pay off credit, several of the most disadvantaged farmers had to sell most of their crops right after harvest, when private market prices were lowest. PRMC workers understood that the weakest link in the chain was the farmers, who were unprepared and ill-equipped, and above all, who did not have the structures and mechanisms to ensure their equal inclusion in the grain sector.

Canadian involvement

In light of this situation, in September 1995, Canada committed to funding a project to support the marketing of grain in Mali (Projetd’appui à la commercialisation des céréales au Mali [PACCEM]), based in Ségou. The project’s goal was to create better management conditions for grain farmers and easier access to markets. A main motivating factor was the proximity of the Office du Niger and it business model with rice farmers that ensures village groups with high production potential who could move marketable surplus and who were interested in managing the marketing of their products.

More specifically, the goal of implementing PACCEM was to teach farmers professional marketing skills by approaching the market through a structure of their own. The aim was to help these famers play an active role in the grain sector and receive a better price for their products by implementing a collective marketing process.

The basic premise was that a group of farmers working as a cooperative would have greater power of negotiation and would get better prices than individuals. Combining members’ products enabled cooperatives to offer large volumes and thus meet the needs of wholesalers and institutional purchasers like the World Food Programme or Mali’s Office of Agricultural Products.

PACCEM also provided access to financial products through the farmers’ cooperatives. The model proposed pre-financing for the growing season and group-purchased fertilizer, two significant needs that most farmers were not able to meet alone.

Thanks to PACCEM, with support from the international development branch of Quebec’s farmers’ union (Union des producteursagricoles, Développement international [UPA DI]), an organization specialized in the collective marketing of agricultural products, 15 village groups and associations from Ségou, Niono and Bla formed a group to face their commercialization challenges together. In 1997, after a two-year experimental stage, the village groups createdan umbrella organization called the Union Faso Jigi, which means “the hope of the people” in the Bambara language.

For nearly a decade, PACCEM supported Faso Jigi in creating a collective system for marketing rice and dry grain (millet, sorghum, corn) in the Ségou region. It also supported the development and consolidation of another farmer organization, BaabahuuJici, based in Diré, whose goal was similar to that of Faso Jigi, but sold wheat in the Timbuktu region.

Over the years, PACCEM has helped the Union Faso Jigi achieve organizational and financial independence, gradually moving from an aid project to consulting. When PACCEM ended, Canada and the Union Faso Jigi’s Canadian partners, including the UPA DI, noted that certain elements of Faso Jigi’s new skills could be consolidated. So they decided to extend their support, namely through the Mali-Canada Common Development Fund and funding from the European Union. This financial support made it possible to build grain and shallot storage.

Canada felt it was relevant and justified to extend the intervention model to other organizations in other parts of Mali. A new five-year project, FeereDiyara, meaning “sales were good,” got underway in April 2014. Currently in progress, the project was started by the Alliance agricole international, a consolidation of three Canadian organizations known for their expertise in agricultural and organizational strengthening: UPA DI, the Centre d’études et coopérationinternationale (CECI) and the Société de coopération pour le développement international (SOCODEVI).

The FeereDiyara aims to reduce poverty rates among grain and produce farmers in the Ségou, Koulikoro, Mopti and Sikasso regions by building skills in existing cooperatives and associations through the integration of sustainable and equitable development principles. Sixteen cooperatives are participating in the project.

The FeereDiyara is an integrated approach, working simultaneously on several elements of organizational strengthening including governance, management, commercialization and the relationship between farmers and associations. Farmers’ sense of belonging to their cooperative or association is very important in the development approach of FeereDiyara’s cooperative partners. The strategy of extending the model focuses on agricultural profitability, and therefore on the net income earned for the farmers and for improving the commercialization infrastructure (storage, conditioning, preservation and processing), which in turn impacts the farmers’ gross income. It also makes it easier for the farmers to get agricultural credit to use stored products as collateral. Through the project, the farmers are learning more about selling conditions for grain and produce, and managing these conditions, which should affect the prices they receive and the amounts they sell.

Lastly, the FeereDiyara project hopes to continue skill-building through training agricultural chamber officers, private service providers and agents from agricultural services who are able to support the development of a cooperative or association even after the project ends.

Canadian funding, in its various forms to cooperatives and associations, including Faso Jigi and FeereDiyara, is estimated at approximately Can$26 million (11.7 billion CFA).

Involvement of other partners

Grain and produce commercializing is a vast and complex industry. Support for this sector in Mali requires the contribution and participation of many partners, each with their own area of expertise.

In the 1980s, the PRMC was supported by external partners (the World Food Programme, Canada, France, the Netherlands, Germany, the European Union, Belgium, the United Kingdom, the United States, Austria and Switzerland). Over the years, the same partners, with the notable addition of the World Bank and the International Fund for Agricultural Development, helped advance the marketing of products from Mali’s agricultural cooperatives.

The agricultural sector also had support from many non-governmental organizations that work with rural communities. To mention just one of them, the Belgian SOS Faim organization put Faso Jigi in contact with its micro-financing partner, KafoJiginew, to help Faso Jigi members get medium-term credit.

The Malian financial institutions’ positive response made them important partners. One factor of PACCEM’s success was striking an agreement with financial institutions like the National Bank of Agricultural Development (Banquenationale de développementAgricole [BNDA]), where Faso Jigi received a line of credit of one billion CFA francs thanks to a guarantee fund, as well as with the Nyèsigiso credit union network.

All this support enabled the Union Faso Jigi to present the strong image of an effective farmers’ organization, which helped it receive funding from other backers.

Results

Made possible by Canadian support, Faso Jigi’s experience is quite promising for Malian, and even African, farmers’ organizations. It started in 1997 as an experiment, with approximately 450 farmers and 250 tons of products marketed. Besides its staff qualified in management, accounting and collective marketing, Faso Jigi has also received a line of credit of 730 CFA francs (approximately Can$1.7 million) from Malian financial institutions and a guarantee fund of 360 million CFA francs (approximately Can$840,000) to ensure member services. The funding will also make it easier for the organization to obtain seasonal and marketing credit. The guarantee fund was made possible with support from Canada and the United States.

Over the six years of PACCEM II, from 2003 to 2009, the Union commercialized more than 20 times the 1997 amount of grain tonnage (mainly rice), representing a progression that is 2.5 times faster than that of its membership.

The financial products that PACCEM helped put in place radically changed the grain farmers’ business model. Guaranteed access to good-quality, affordable agricultural inputs (fertilizer, seed, agrochemical products) allowed them to avoid selling their crops at a low price with vendors in exchange for these inputs. For those in the cooperative, receiving pre-payment from members for part of the later harvest has helped them prepare and plant their crops, and respect the cultural calendar, an important factor in attaining productivity.

In addition, collectively marketing members’ products that have been stored in good conditions guarantees the farmers real negotiating power with buyers, better prices and, consequently, higher income. More specifically, women growing shallots have seen a substantial increase in income since they have been able to group their products together and store them in better boxes for a relatively long period (five to six months), enabling them to sell at a better price. Without this means of preservation, they used to have to sell their crop at harvest, at 75 or 60 CFA francs per kilogram. Now, after several months, they earn between 500 and 600 CFA francs per kilogram, with much fewer losses.

Lastly, the model implies the distribution of rebates to the farmers based on the profits made from selling their products. For example, in 2012 Faso Jigi distributed Can$272,000 among its members, which is about Can$110 per farmer. This can be considered a great success given that the average annual income in Mali is approximately Can$500.

PACCEM’s cooperative model has earned a healthy list of successes: pre-funding for farmers, group purchasing of inputs through calls for tenders and group purchasing to collectively market members’ products giving them greater commercial negotiating power.

KassimCoulibaly, a third-generation rice cultivator, remembers, “When I first had access to my own rice paddies in the early 1990s, I dealt directly with a local merchant. I sold him part of my products, keeping a larger portion in my storage to feed my family. At harvest-time, I was already indebted to the merchant, because he loaned me money to pay for the inputs. If ever a family emergency happened during the harvest season, I could also ask him for an advance on the next harvest to pay for it. But at harvest, I had to sell most of my crop at a low price to pay my debts and my dues to the Office du Niger.” – KassimCoulibaly, member of Faso Jigi’s executive office

The FeereDiyara project has had a particularly significant impact on women. To boost their involvement in the collective marketing system, the project in Ségou was expanded to include the collective commercialization of shallots and cowpeas, since women were actively involved in these areas in the Office du Niger area. Twenty shallot cooperatives were started and supported to help integrate women into the collective commercialization system.

The project has also made certain things easier for the women, notably though a lower share percentage payment to purchase infrastructure and equipment and waved fees for women’s cooperatives and associations for the environmental records required before installing equipment and infrastructure. These aspects make it easier for women to access the project’s investment funds.

Regarding skill-building, the women took advantage of several training and consultation activities that helped strengthen their leadership skills and their involvement in the cooperatives’ and associations’ decision-making bodies.

Canadian support for strengthening farmer organizations and the cooperative grain commercialization system has significantly helped consolidate good governance in the sector. The owner-member concept makes every member individually and collectively responsible for the smooth running of the association. PACCEM and the association succeeded largely because the Union Faso Jigi followed cooperative principles, was well-governed and exhibited transparency. In particular, the fact that the Union was able to reimburse the financial institutions all the credit obtained for members (even when its members were not able pay the Union) shows the association’s integrity and has won the respect and trust of its financial partners.

Photo of the Faso Jigi grain storage warehouse.

In 2015, Faso Jigi had over 3,507 members who collectively commercialized an average 3,800 tons of grain that year, totaling Can$2.2 million in sales. Although Faso Jigi’s activities may seem marginal compared to the entire rice production in the area irrigated by the Niger River falling in the Office du Niger’s zone (more than 300,000 tons per year), the Union, comprised of cooperatives, village associations and economic groups, is now an essential player that is recognized by authorities, the Office of Agricultural Products and vendors, as well as by other growers and agricultural cooperatives that have not had the same advantages. Its positive results even gained recognition internationally: It won the award for Farmers Organizations in September 2012 during the Forum organized by the Alliance for a Green Revolution in Africa in Tanzania. In April 2017, the Union Faso Jigi celebrated its 20-year anniversary, using the opportunity to lay the first stone for the construction of its new headquarters.

Lastly, Canada strongly fostered synergy between those working in food security. It quickly understood that for a sustainable future, gender equality at home and in communities needed to be improved, a challenge that Canadian projects took on as their key issue. The successes achieved by other organizations are largely due to Canadian cooperation.

“This adaptation to members’ needs has impacted food security. In developing countries, poverty is often concentrated in rural areas and the subsistence of those living there depends on food and cash crops. By meeting the needs of these groups, rural agricultural cooperatives are playing a key role producing and distributing food, helping local communities better manage and own their agricultural resources, and thus contribute to food security in the involved communities.” – Dévelopment international Desjardins, the Canadian Co-operative Association and SOCODEVI, Canadian Co-operatives in International Development: Creating Wealth, Reducing Poverty, and Building a Better World

Challenges encountered

Despite all its successes, Faso Jigi also faced the same difficulties as most other cooperatives and associations in West Africa. Some of these difficulties were mitigated through good governance. One of the main problems was the amount of delinquent payments, which kept the organization from growing. The situation arose because some members asked for credit beyond their needs and then could not pay it back. In this case, some of the inputs were resold to cover other operational needs, like paying for provisions to get through the hunger gap (when food is not widely available). Consequently, there were not enough crops to reimburse the loans given by the Union. The build-up of these debts from one year to the next put Faso Jigi into debt and weighed heavily on its profitability and financial independence.

In 2016, the Union Faso Jigi made the difficult but beneficial decision to apply strategies to significantly reduce its delinquent payments, which represented at least 5% of the input credits, in good years and bad. The decision to tighten the input credit and to limit it to farmers in good standing resulted in: a dramatic decrease in delinquent payments (approximately 1%); improved profitability per kilogram; and an expected but temporary drop in membership (2,953 members in late September 2017, 554 fewer than in 2015) and in total commercialized tonnage(approximately 1,200 tons less than the previous year).

Illiteracy among cooperative members, particularly women, was also a challenge. The business activities needed for producing grain and produce require the farmers to master certain management tools, which because of illiteracy, was not within the reach of all members. However, this requirement also highlights the major advantages of the cooperative system, as members contribute their particular abilities to the group’s activities. Distributing roles allows the organization to entrust supplier and customer negotiations, for example, to those who are best at these tasks.

Lastly, the country’s constant insecurity slowed the implementation of some support. Since a large part of the area served by the project was off-limits to Canadian personnel, some anticipated support activities led by Canadian volunteers were cancelled. Local staff also has to follow certain travel restrictions, such as avoiding very unsafe areas.

Gender equality

One of the main Canadian contributions to grain and produce production via Malian cooperatives was to help women find their place in the sector, not just in cultivation but also in commercializing the fruits of their labour. Women’s involvement in business operations helped them master the entire production and marketing chain, and benefit economically and personally from their work. Canadian aid made a significant contribution to strengthening women’s economic power.

Shallot storage box

To encourage greater involvement of women growers in farmer cooperatives, PACCEM made a particular effort to support women shallot grower groups in the Ségou region and foster their membership to the Union Faso Jigi. In the Diré area, through BaabahuuJici, PACCEM supported specific activities, like women running the threshers.

In terms of gender equity, PACCEM has enabled women to play an important role in the organization, thanks to crops like shallots, for which they received specific support such as the provision of improved storage boxes to considerably reduce the amount of post-harvest losses.

Under PACCEM II, the total amount of shallots commercialized by the women groups of Faso Jigi went from 57 tons in 2004 to 215 in 2009, an increase of almost 350%. The women farmers’ income also rose, from 10 to 26 million CFA francs over the same time period.

PACCEM also led basic literacy classes and management training for women cooperative members. For skill-building, they took part in several training and consulting activities that strengthened their leadership. Women’s increased participation in the Union’s economic activities, with support from the skill strengthening it offered, enabled them to move into leadership positions in Faso Jigi (for example, board of directors, supervisory committee).

The FeereDiyara project also brought innovative changes through strategies to integrate women via specific economic activities like preserving, conditioning and processing products such as rice and shallots in the cooperatives.

Some equipment and infrastructure was devoted to women alone, with specific favourable conditions to increase their access to investment funds. The project also fostered the inclusion of women in cooperatives that previously did not have many, or any, women. Some female farmers were elected to management positions there as well.

Women are the main beneficiaries of the FeereDiyara investments: over 40% of the Can$4.2 million in Canadian aid was dedicated to women-only cooperatives and associations. These organizations also received support for their infrastructure and equipment.

Besides increasing women’s participation in commercializing products, support from the PACCEM and FeereDiyara projects brought about a change in men and women’s behaviour and perception of each other regarding equality and their respective roles in the cooperatives. This can be seen notably in the initiatives of the mixed cooperatives’ and associations’ boards of directors to develop specific economic activities for women and the search for partners to fund these activities.

Increased female membership and their positions in decision-making roles on boards of directors, supervisory committees and other committees encourage women to be active in their associations. There are now more women attending general assemblies, and they speak up to defend their interests and make their voices heard during elections or decision-making meetings.

Despite the persistent mindset of some men that household tasks are the responsibility of women or that women should not join in group meetings with men, and despite some women’s self-excluding belief that they should not be in the company of men or should not speak when men are present, we have seen a growing confidence among women in the roles they can play in cooperatives and associations. Canadian aid’s approach opened the doors to a new way of thinking and the gender equity approach gained support and openness in cooperatives and in communities.

“Liberated” women lead economic activities that allow them to help support their family. Many of them are using the income from commercialization to pay for their children’s education, healthcare and so forth, which should bring recognition to women’s place and role in the family. Women’s opinions now count at home: they are consulted and participate in decision-making.

Lessons learned

Canadian aid for the commercializing grain and produce products of Malian farmer cooperatives and associations has largely demonstrated the interest in post-harvest support. It is not enough to know how to seed; a farmer must also harvest, store and sell. The right strategy, and especially a collective approach, not only improves the products and preserves them better, but also cuts losses and gets the farmers better prices.

The cooperative system seems the best place to take on this inclusive and equitable strategy. The principle of owner-member calls on each person’s sense of accountability and respect for the community. Pooling effort, investments and work products strengthens the community and becomes a source of accomplishment and pride.

The government’s legal recognition of the organization has brought farming activities from an informal activity to operations registered in the formal economy. This change enables farmers to see themselves as professionals and combine their efforts to improve their shared working and living conditions. Formalization also gives farmers a legitimate voice, with power to influence their products’ production and marketing mechanisms.

Photo of warehouse managers of the SABATI cooperative of female grain and legume farmers in Zantiébougou.

Lastly, we must remember that these lessons learned are subject to the quality of the women and men who run the cooperatives. Nothing can be taken for granted and each organization must identify among its members women and men of integrity who take the shared interests of their organization to heart. Similarly, the cooperatives must provide their members good-quality services to guarantee the organizations’ stability and development.

Canadian aid for grain and produce commercialization is a prime example of the successful integration of gender equality in a development project. Including women is capital for any economic development process and for social stability. This type of integration is made easier with investment in activities specifically intended for women and by providing specific help given their limited means compared to men. Yet this strategy does not assume that they are excluded from activities traditionally dominated by men.

Sources

We would like to sincerely thank the following for their assistance in creating this impact story:

The Impact Stories series of Canadian aid in Mali was produced by the Field Support Services Project (FSSP) and in collaborationwith the above-mentioned stakeholders.

Rue Sotuba/ACI, rond-point de l’ancienne chaussée
Bamako, Mali
Tel.: +223 44 90 44 45
Email: info@psat-mali.org
Note: The FSSP received funding from the Government of Canada.

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