Market Prospects for Groundnut in West Africa COMMON FUND ...

have a liberal trade policy with no border intervention. South
Africa’s tariff structure exhibits a slight escalation; processed
groundnuts are subject to a tariff of 6% while unprocessed
groundnuts enter duty free. State trading occurs in several
countries, allowing enforcement of duties on oil imports (eg,
Senegal).
Appendix 3, Current trade and domestic policies on groundnut (2003),
shows the various tariff rates applied by African countries on processed
products (from Beghin, Diop, Matthey and Sewadeh 2003).
Under pressure from the World Bank and the EU, the Government of
Senegal has in recent years begun to liberalize the groundnut sector, including
the dissolution of the former state monopoly on produce marketing, and the
currently-anticipated privatization of the oil mills still operated by the state
corporation SONACOS.
However, the process has not met with uniform success; producers were
initially slow to embrace the ‘free market,’ and have spread their risk by
moving cautiously toward open market sales, while maintaining a strong
tendency to sell through parastatal organs at the formerly mandated (fixed)
price. This conservative commercial tendency on the part of the producer has
been explained as a strategy of minimizing risk, since producers endure a very
precarious existence – compounded by erratic rainfall, environmental
degradation and population pressures on the land – which does not in strict
economic terms pay for itself (Gray 2002).
In November of 2001, Sonagraines, the parastatal organizing most of the
collection and transportation of the Senegalese groundnut through the official
market, was forced to abruptly dissolve in response to World Bank and EU
pressure, in order to allow for the development of private alternatives which
were, however, slow to develop. Farmers were reportedly confused as to how
to market their products and there were reports of private transport operators
taking rough advantage of the situation by buying up groundnut stocks at
steeply discounted prices (Afrol April 2002).
Though the oil mills themselves still belong to SONACOS at the time of
writing, the sale of SONACOS has been imminent for the past year, and the
critical question remains whether it will be sold as a unit (as the Government
of Senegal seems to prefer) or broken up (as the World Bank is said to favor).
Meanwhile, the market has not stood still for SONACOS, which set up
600 receipt and collection marketing points for the 2003 harvest production
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