The Peanut Sector and Artisanal Wafer (Kwlikwli) and Oil (Agonlinmin) Production Units: Lessons for Policies to Support Small-Scale Agrifood Production in West Africa? ^†

Abstract

Peanut production in Benin has experienced impressive growth, from 69,222 tons in 1989 to 156,901 tons in 2018, despite the liberalization of the sector, which has deprived it of significant public support. This ethnographic study conducted in Ouessè aims to understand this evolution using the path dependency theory. Semi-structured interviews were conducted with several actors, including producers, collectors, traders and processors. The results show that these actors and private microfinance have reappropriated the historical past of peanuts in the commune of Ouessè, as well as the previous orientations of agricultural policy, to reorganize the financing, collection and marketing of peanuts in order to meet the growing demand from processing units.

1. Introduction

From the colonial period until the early 1980s, agricultural policies implemented in Benin, as in most countries in the sub-region, favored cash crops such as oil palm, peanuts, cotton and, more recently, cashew nuts [1]. Regional specialization was thus established, with a predominance of oil palm in the south, peanuts and cotton in the center, and cotton in the north [2]. The structural reforms of the 1980s led to significant fluctuations in peanut production. However, since 2011, there has been a recovery in this production, particularly in the commune of Ouessè, in the center of the country, with an extension to the north. Paradoxically, this recovery in production has developed in the absence of specific public policies in favor of peanuts. This article examines the historical factors and current dynamics that influenced the evolution of peanut production between 1969 and 2017-2018. It also examines the strategies implemented by stakeholders in the sector to adapt to market constraints. The aim is to better understand current practices, identify ways to sustainably support peanut production in the main production areas and identify lessons for policies to support agrifood production.

2. Materials and Methods

This study is based on the theory of path dependence. The notion of economics of path dependence was developed in political science during the 1990s, to emphasize the weight of choices made in the past and that of political institutions on present options and decisions [3]. In general, the concept of path dependence corresponds to a situation where past progress in a given direction induces subsequent movements in the same direction [3]. Path dependence is defined as a sequential series of steps or events that results from antecedent historical conditions, which define a set of options available at a given moment, called a critical moment [3]. In the context of path dependence, two types of dominant sequences are often studied [4]. The first type involves self-reinforcing sequences, where an institutional pattern, once adopted, provides increasing benefits as it continues to be used. This leads to the pattern becoming more reinforced over time, making it difficult to change or adopt alternatives, even if these might be more effective. Path-dependent analysis may also involve the study of reactive sequences, which are chains of successive events linked by causal relationships, where each event reacts to the previous ones. The final outcome of the sequence is usually the object of study, and the chain of events is seen as a path leading to that outcome. For a sequence to be considered path-dependent, the initial event must be contingent, and the chain must exhibit “inherent sequentiality”. However, not all sequences possess these characteristics, and those that do not should therefore not be considered path-dependent.

In the case of peanut production in Benin, the operationalization of the path dependence theory could mean the following:

• Past agricultural policies have created structures and institutions that still guide producers’ practices and market dynamics today.
• Initial investments in certain regions, including the commune of Ouessè (Benin), encouraged specialization in peanut cultivation, which has been difficult to change since then.
• Social networks and cultural norms related to peanut production can be barriers to change and, conversely, forces that drive progress in the culture.

Based on this assumption, data were collected using qualitative and quantitative surveys. A diachronic approach made it possible to trace the evolution of agricultural policies from 1960 to the present day. The effects of these policies on production and areas cultivated with peanuts from 1969 to 2017–2018 were assessed using agricultural statistics obtained via FAOSTAT, MAEP compendiums and the yearbooks of the Directorate of Agricultural Statistics of Benin.

Information on national rural development policies and their local implementation, particularly in Ouessè, was collected through a documentary review and interviews with key informants. Fifteen (15) semi-structured interviews, including ten (10) individual and five (5) group interviews, were conducted with producers, collectors, traders, processors, microfinance managers and stakeholders from the technical services of the Ministry in charge of agriculture, livestock and fisheries (MAEP). In addition, a synchronic approach made it possible to document local initiatives developed by stakeholders after the State withdrew from the sector, as well as private financial support mechanisms. In-depth interviews were conducted with officials from the Village Savings Bank and Agricultural Credit (CAVECA) and the Ouessè Food Bank Group (GBVO). Structured surveys were conducted among 30 collectors, 60 producers and 60 traders (wholesalers) randomly selected and interviewed during market days. The data were processed and analyzed using Microsoft Excel 2016 and NVivo 10 software.

3. Results

3.1. The Main Phases of the Development of Peanut Cultivation in Benin

The evolution of peanut production in Benin since independence, presented in Figure 1, reveals a trajectory marked by significant fluctuations, closely linked to the agricultural policies implemented. Four major phases can be distinguished: (1) the period from 1969 to 1975; (2) the period from 1975 to 1990; (3) the period from 1990 to 2000; and (4) the period from 2000 to the present day (2017–2018).

• Period 1: from 1969 to 1975
  Following independence, Benin implemented policies to promote cash crops, including peanuts. A commodity-specific extension approach was adopted, focusing on marketing and supplying local industries [5]. Peanut cultivation areas and production were stable until 1970, before declining until 1975. This collapse was partly attributable to the end of the guaranteed price by France in 1965, which reduced the profitability of the crop for producers [6]. The drought that hit the region in the mid-1970s also contributed to the decline in peanut production [7,8]. Development projects, such as the Integrated Development Operation of Zou (ODIZ), were implemented to promote cash crops, including peanuts. Although the area cultivated with the improved peanut variety increased thanks to these projects, political priority was given to cotton [2]. The fall in cotton prices from 1975 onwards encouraged a slight recovery in peanut production, as producers turned to this crop to compensate for their losses with the cotton crop.
• Period 2: from 1975 to 1990
  Between 1975 and 1990, peanut production in Benin experienced significant fluctuations. The Regional Action Centers for Rural Development (CARDER), created in 1975, coordinated efforts in rural areas, contributing to an increase in peanut production from 34,655 tons over 57,945 hectares in 1975, to 63,931 tons over 94,892 hectares in 1990. However, a drastic decline in peanut production was observed in 1982 and 1983, reaching only 33,595 tons over 61,997 hectares. A recovery began in 1984 with 54,377 tons, peaking again at 63,931 tons in 1990. In parallel, in 1989, Benin suffered a financial crisis, marked by a decline in Gross Domestic Product (GDP) [9], a budget deficit and the collapse of the banking system, affecting the National Society of Fatty Body Industries (SONICOG), which was no longer able to finance the purchase of peanuts. In response to the economic crisis, the Benin government adopted structural adjustment programs in 1989 and 1991, reducing public spending and opening agricultural development enterprises to farmers’ organizations and the private sector.
• Period 3: from 1990 to 2000
  Between 1990 and 2000, Benin reorganized its rural sector as part of the post-crisis reforms of 1989, in line with the 1991 rural development policy paper. This period saw a restructuring of the Regional Action Centers for Rural Development (CARDER) and agricultural sectors, with a gradual disengagement of the State and greater involvement of the private sector. The area cultivated with peanuts increased by 46% between 1990 and 2000, with an average annual growth rate of 5.7%. Production increased by 89.5% over the same period, with an annual average of 9.9%. In 2000, 138,596 hectares were sown and production reached 121,166 tons, although the peanut sector did not benefit from the same support as cotton. In 2000, however, the Ministry of Rural Development developed a “Peanut Industry Revival Program” proposing solutions for its relaunch.
• Period 4: from 2000 to the present (2017–2018)
  From 2000 to 2018, peanut production and areas cultivated in Benin stagnated, despite a slight increase over the last five years, with an area of 199,527 hectares cultivated for a production of 156,901 tons. Significant declines were recorded in 2005 (−24% compared to 2004) and in 2011 (−14% compared to 2010). Some efforts to introduce new varieties and support artisanal units have been made, particularly in the Zou and Collines departments, without much success. The sector has suffered from a lack of supervision and a lack of suitable seeds and specific fertilizers, as well as climate degradation and conflicts between farmers and herders. Despite these challenges, recent progress in peanut processing offers potential for future improvement in the peanut sector.

3.2. The Peanut Marketing System in Ouessè: From the Eve of Independence to Liberalization

Between 1955 and 1958, the colonial administration set up peasant agricultural mutual societies in each village to supply European industries with peanuts. These mutual societies were federated into regional unions in 1958, notably in the communes of Dassa and Savè (Benin). The present-day commune of Ouessè, then a subdivision of Savè, was an important production area. The Mutual Union of Savè (UMAS) was created to improve the supply of essential products, access to credit for producers, and the organization of peanut marketing. In 1968, the shelling plant, initially installed in Savè, was transferred to Ouessè under pressure from Ouessè producers. UMAS managed the plant with a board of directors made up of collectors, paid on commission and benefiting from loans. UMAS received funds from the Dahomey Agricultural Marketing Company (SOCAD), and then from the National Society for Agricultural Promotion (SONAPRA) to prefinance the purchase of peanuts, which were shelled and sold at regulated prices. In 1975, accusations of mismanagement led to a change of office in 1976. The new office was said to have improved management, increasing the factory’s profits. However, market liberalization in 1989 reduced the capacity of UMAS, as it could no longer purchase all of the production. Competition intensified with the arrival of private individual traders, offering more attractive prices to producers. UMAS’s attempts to redress the situation by shelling the traders’ goods failed. The factory eventually went bankrupt and ceased operations.

3.3. The Rehabilitation of Old Support Instruments for Peanut Production in the Commune of Ouessè

With the end of direct government intervention in agricultural production, actors in the Ouessè peanut sector have reactivated the old collection and financing mechanisms to reorganize the financing, collection and marketing of peanuts.

3.3.1. Marketing Organization

Since the liberalization of the peanut sector and the withdrawal of the State, Ouessè producers have had to adapt their marketing strategy. They now sell their peanuts directly or via collectors, mainly to traders in the Zou (Bohicon, Abomey) and Mono (Klouékamè, Azovè) departments of Benin. However, the lack of infrastructure and outlets has led to abusive practices and crises of trust between traders and producers. To address these problems, former UMAS collectors created a new association, the Ouessè Food Bank Group (GBVO). This association elects a president for a renewable three-year term, and organizes peanut collection in subsections at village, district and commune level. It has an average of 80 collectors per village. The GBVO has introduced reforms such as the setting of new measurement units (basin and 100 kg bag) to replace the jute bag. It sets a floor price (10,000 FCFA for a 100 kg bag) that is adjusted according to the regional market. Direct sales between producers and traders were banned to allow for better control. Traders often seek large volumes and establish business relationships with several collectors, directly or through their representatives. Collectors, when they receive orders at the beginning of the campaign, contact producers to reserve the peanuts before harvest. After the harvest, the producer is paid according to the current market price, as soon as the collector receives the goods. If the producer lacks the resources to finance production, the collector can, based on the floor price and the expected number of peanut bags, grant him a loan. Collectors receive 500 FCFA per bag sold, including 400 FCFA for their service and 100 FCFA for transport. They finance their activities mainly through prefinancing from traders, with secondary contributions from their own savings or microfinance loans.

3.3.2. Production and Marketing Support Systems

Financing agricultural production, particularly for food crops such as peanuts, has been a persistent challenge since the end of direct State support. Previously supported by the government with seeds and fertilizers, producers must now finance their production themselves, often with the help of traders, collectors or moneylenders. With the resumption of peanut production in recent years, several microfinance institutions have set up in Ouessè, though it is a landlocked place.

According to the results of our surveys, 87% of traders, 75% of collectors and 60% of producers use the services of these institutions. Producers mobilize, on average, 76.55% of their savings to finance production, mainly for seeds and labor. The presence of microfinance institutions, such as the Village Savings Bank and Agricultural Credit (CAVECA), the Local Agricultural Credit Mutual Fund Gross Domestic Product (CLCAM) and the Benin Agricultural Mutual Insurance (AMAB), has reduced the use of prefinancing by traders or usurers. CAVECA offers loans for agricultural production, covering a period of 12 to 18 months. Repayment begins after 6 months of activity and is spread over the following two quarters, with a decreasing interest rate of 2% per month. Regardless of the type of credit requested, the value of the financial guarantee, initially set at 25%, was reduced to 16% in 2011, and then to 10% in 2013, to better respond to customers’ concerns and deal with competition between institutions.

In view of the data presented in

Table 1. Types and values (in FCFA) of loans granted by CAVECA GBEME KPASSA to finance agricultural activities in 2005, 2013 and 2014.

Types of Credit Granted	Years	Number of People Receiving Credit	Total Value of Credit Granted (in FCFA)
Loans granted for production	2005	5	1,000,000
	2013	688	148,570,000
	2014 (January to September)	198	90,910,000
Credits granted for the agricultural food trade	2003	19	2,621,600
	2013	1273	389,900,000
	2014 (January to September)	1307	367,390,000

, facilitating access conditions, in particular by reducing the financial guarantee and interest rate, has significantly increased the number of beneficiaries and encouraged producers and traders to get involved.

In 2013, Village Savings Bank and Agricultural Credit of Gbeme Kpassa (Ouessè, Benin) granted 688 loans, with a total value of 148,570,000 FCFA, for agricultural production, and 1273 loans, with a value of 389,900,000 FCFA, for food trade.

“Before the arrival of microfinance institutions, 8 out of every 10 producers took out loans with traders and loan sharks. But today there are barely 4 who still take out loans with these two actors. I think that this business will flourish in the years to come. Many farmers don’t grow cotton, they grow peanuts. Some give up, but at the same time others continue to produce them. So, there’s no shortage of goods”, says a peanut grower.

However, loans granted for the marketing of agricultural products dominate those granted for agricultural production.

4. Discussion

The analysis of the evolution of peanut production in Benin, in light of the path dependency theory, shows a strong influence of previous agricultural policies on the current dynamics of this crop in the commune of Ouessè. The trajectory of peanut production has been shaped by several critical moments, such as the influence of colonial policies [10], structural adjustment programs, price incentives, technical support with the establishment of CARDER, the organization of marketing and climatic disturbances. After independence, the continuation of colonial policies focused on cash crops consolidated the place of the peanut in the Beninese economy. Many African countries continued with colonial policies of promoting export crops until 1970 [11]. However, the Benin era of revolutionary rule introduced new paradigms favoring food self-sufficiency, which initially boosted peanut production, before challenges such as the reorganization of the cotton sector and drought reversed this trend. The marketing system set up by the colonial administration, particularly UMAS, supported the sector until the end of the 1980s. However, with the disengagement of the State, producers were faced with new challenges linked to market liberalization, requiring reorganization to maintain the value chain [11,12,13]. In this new environment, the former leaders of UMAS collectors were able to adapt by creating a new organization (GBVO). This structure continues to play a key role in facilitating transactions between producers and traders and ensuring a secure marketing network. By establishing a minimum price for peanuts, these collectors not only strengthened their influence, but also helped to stabilize production within family farms. The specialization of the commune of Ouessè in peanut cultivation, despite the liberalization of the sector, is therefore the result of a series of historical choices and favorable initial conditions. The organization of the collection system, the social networks established between producers, collectors and traders, the facilitation of access to microcredits for the financing of production and collection activities, and then the local standards that have developed around this crop, constitute the essential elements of the continuity of this production system. Although local stakeholders have been able to adapt to certain conditions in their commercial environment to maintain the peanut sector, significant challenges persist, particularly in terms of resilience to climatic hazards and market fluctuations. It is essential to consider these historical dynamics to better understand the reluctance to certain changes proposed today, and to envisage development strategies that take into account not only structural constraints, but also the assets inherited from the past.

5. Conclusions

This study of the peanut sector in Ouessè demonstrates a remarkable capacity for adaptation of local actors in the face of political and economic developments. Despite historical fluctuations in production, linked to agricultural policies and different critical moments, peanut production remains dynamic thanks to the revival of local stakeholders, who have managed to adapt former practices to the current liberal and non-State context. They set informal governance rules and internal economic dynamics that shape the marketing system. The creation of the Ouessè Food Bank Group (GBVO) after the liberalization of the market is a significant example of the reappropriation of institutional instruments inherited from the colonial era. This organization played an important role in structuring the sector, guaranteeing a minimum income for producers and promoting market stability. However, several challenges remain. Producers are still vulnerable to price fluctuations and climatic hazards. In addition, reliance on microfinance institutions for production financing poses a risk in the event of economic shocks [14]. In conclusion, this study highlights the importance of taking into account local dynamics and historical trajectories in the design of agricultural development policies. An approach adapted to specific realities and past experiences is essential to strengthen the resilience of actors in agricultural sectors and ensure the long-term sustainability of these sectors in places that are major producers, such as the case of the Ouessè commune for peanut production.