Department of State for Agriculture
The Quadrangle

Wednesday, 27 October 2004

PRESS RELEASE

The persistent unsatisfactory marketing arrangements for the groundnut crop over the years have been a major source of concern for His Excellency the President, Alhaji Yahya AJJ Jammeh.

The demise of the key groundnut Marketing Institution, the GPMB in 1991 and the liquidation of the apex farmer organization, the GCU, have left a big vacuum in the marketing structure of the agricultural industry. In 1998, government and the European Union signed a Framework of Agreement (FOA) under which the two parties agreed to transfer the responsibility for the management of the groundnut subsector to ASPA (Agribusiness Service Plan Association), an inter professional body of stakeholders in the groundnut sub-sector, for an initial period of three years from November 1999. The agreement was repeatedly renewed on expiration of the three years to give room for sustainability of the programme. However, ASPA's role in groundnut marketing has been ambiguous and largely ineffective due to its lack of capacity to regulate the operations of various stakeholders.

Some of the key constraints associated with the effective and inefficient marketing system could be summarised as follows: lack of an effective regulatory mechanism for the groundnut industry, uncontrolled participation of unscrupulous private dealers in the marketing of the crop without adequate financing, lack of capacity on the part of Operators to finance the annual marketing operations resulting in prolonged delays in paying producers (credit buying), poor organisation of the producer organisations/CPMS and inadequate capacity of their apex body FACS to effectively coordinate their activities.

Against this backdrop of constraints coupled with careful analysis of the situation in general, it became clear that there is lack of regulation of the industry. Regulation is the sole responsibility of Government and an effective regulatory framework should minimize the problems highlighted above and build confidence in the marketing system with a view to attracting genuine investors as well as motivate the producers to increase their productive and marketable quantities.

It is in this regard that H.E. the President, Alhaji Dr. Yahya AJJ Jammeh, had instructed the relevant Departments for: Trade, Industry and Employment; Finance and Economic Affairs and Agriculture, to ensure that government takes its full statutory responsibility of regulating the groundnut industry by setting up standards for participation in groundnut marketing and to establish mechanisms for the effective and efficient monitoring of the industry to ensure strict compliance by all categories of stakeholders with effect from the upcoming 2004/2005 groundnut trade season.

The Regulatory Framework which has been approved by the Government and endorsed by ASPA and the other stakeholders in the industry, includes among other things; Eligibility criteria for participation in groundnut marketing, strict quality control, procedures for granting of licenses and instruments for control, monitoring and supervision.

The Regulatory Framework spells out the following general conditions for to all categories of stakeholders wishing to participate in this years marketing season: a valid license, absolutely no credit buying, sale of nuts only allowed at authorized buying locations, strict compliance with quality control measures, in particular application of the recommended actellic dust.

In addition to the general conditions, buying agents/traders must show evidence of signed contracts with licensed operators and show proof of capacity for marketing and accounting operations. Operators must show among other things; evidence of availability of adequate financing, contracts with overseas buyers, proof that export earnings would be ploughed back in to the economy and detailed information on past operations. The full set of eligibility criteria and the relevant application forms could be obtained from DOSA or ASPA and all prospective Operators and Buying agents are advised to farmiliarise themselves with the Regulatory Framework.

The overall supervisory authority for the implementation of the Regulatory Framework has been vested with the Secretary of State for Agriculture, to be assisted by a Cabinet Sub-Committee comprising: DOSTIE, DOSFEA, DOSJ, and the Governor of the Central Bank.

The Producer Price of Groundnuts For The 2004/05 Marketing Season

The producer price of groundnuts for the 2004/05 marketing season has been pegged at D8100 per ton, following consultations between the Government and the stakeholders in the industry. This year's price compares favourably with last year's producer price D7, 500.00 per ton, with an increase of D600 over the previous year. The groundnuts producer price was determined after a careful consideration of the world market price and the prevailing prices in the sub region. Farmers are therefore urged to sell their produce to the local co-operative produce marketing societies and other authorised buying points to take maximum advantage of the increased groundnut producer price.

Opening Date For The Groundnut Marketing Season

The 2004/05 groundnut-marketing season will commence on Monday 6th December 2004.