Thursday, May 28, 2020

Problem Of Groundnut Marketing (PART Four)

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This Column is devoted to monitor and report on issues that relate to production, processing, preservation and marketing of agricultural produce, aimed at ensuring food security in the Gambia, as well as the interventions of Government and Non-governmental Organizations in this regard.

Agriculture remains both a new and old source of national revenue and (youth) employment. Improved public awareness and discussions on the issues involved, will significantly maximize agricultural outcomes and the contribution of the sector to economic growth and job creation.

Agriculture is the mainstay of the Gambian economy, contributing between 25 to 30 percent of the country’s GDP, and employing over 70 percent of the labour force. It accounts for about 30 percent of the country’s foreign exchange earnings, mainly from the export of the major cash crop, groundnut.

The sector is characterised by subsistence rain-fed production of food crops comprising cereals (mainly coarse grains and rice), semi-commercial production of groundnuts and sesame, traditional livestock production, fishing and horticultural production.

Despite being the main livelihood for the majority of Gambians, agriculture continues to be marred by low input farming systems, with the majority of small-scale farmers not using improved seeds and fertilizer among others. These coupled with the labour intensive and drudgery in tilling the land, limits factors to increase the production and productivity of the farming community in The Gambia.

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Hence, farming in the Gambia largely depends on human and animal power, and this greatly hinders the timeframe of farming operations. Therefore, this makes the development of agriculture particularly land preparation, weeding, harvest and post-harvest processes and activities, a major challenge for farmers in rural Gambia.

In the last edition, we highlighted information on the Gambia Cooperative Union (GCU), and on the lending of cash, and provision of fertilizer and seeds to Cooperative Produce Marketing Societies (CPMS), by the GCU.

FINANCIAL CRISIS OF GAMBIA COOPERATIVE UNION:

According to a press release issued by the Department of State for Agriculture, the Gambia Cooperative Union incurred a liability of 209.5 Million dalasi and was in possession of assets amounting to 25.9 million dalasi. The financial crisis which gripped the Cooperative Union became evident in a report called: ‘Diagnostic Study of The Gambia Commercial and Development Bank’ submitted by Robert R. Nathan Associates, Inc. in June, 1988.

The study indicated that GCU was the largest purchaser of groundnuts in the country; that used to supply the former Gambia Produce Marketing Board (GPMB), with 80% of its groundnuts; that the

Union is said to have operated through formal registered primary cooperatives societies; that the societies grew to 1,986.

According to the report, many of the 1,986 Societies were opened under political pressure; that GCU lent to CPMS which in turn lends directly to farmers. The Report spoke about the difficulty that GCU had in servicing its debts with the Gambia Commercial and Development Bank.

According to the Report, as of March, 1988, GCU’s indebtedness to GCDB was as follows:

Working overdraft account- D23,211,000;

Cooperative Union Transport a/c- D11,090,000;

Subtotal- D34, 301,000.

GCU 1987/88 Crop a/c- D18,978,000

Total- D53,279,000; that these loans made GCU the Bank’s largest borrower, and this particular customer’s debt represented 24.7 percent of the Bank’s entire loan portfolio as of March 31, 1988.

The Managed Fund account for GCU which government accepted to take over is as follows:

Cooperative Union (1984/85) a/c- D7,176,000

Cooperative Union (1981/84)- D10,991,000

Cooperative Union (Frozen a/c 1979/81)- D14,437,000

Total- D32,604,000.00

Hence by 1988, outstanding debt of the GCU was over 85 Million dalasi.

The PPP regime ignored the Diagnostic Report and did nothing to reform the Cooperative Union until the scandal of 1993, which indicated that GCU had only forty dalasi in its coffers, and owed over D20 million dalasi at Standard Bank; that it had to acquire a loan of D6 million from the Social Security and Housing Finance Corporation with 22% interest, to purchase farmers’groundnuts, during the 1993/94 trade season.

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