In an effort to get the best price for their groundnuts, farmers in the Gambia are selling their product to Senegalese wholesalers who generally pay premium price, bypassing the lower rates offered by the Gambian government.
Every farmer would love to sell their groundnuts to the government if a better price was offered, according to Yerro Bah, a farmer in Dippa Kunda village, in the north bank region of the Gambia. He said he had a bumper harvest like many other farmers this year.
"The season was fair, but the price is low-- that's the only problem," says Bah.
"Had it been an okay price, all Gambian farmers would have sold their groundnuts to the government. I know that I need to support my government in terms of development and our best resources here is groundnut but the price is low," he adds.
Agriculture contributes about 33 percent of the small West African nation's Gross Domestic Product, of which groundnut is the highest contributor. Over the years the country's groundnut export has been declining from 6000 tons to less than 1000 tons worldwide, thus affecting the price of other commodities in the market. According to Muhammed Njie, manager of the Gambia Food Processing and Marketing Cooperation, this is a result of farmers selling their groundnuts elsewhere.
"When we export, we are paid in foreign currency and the foreign currency that we receive is the foreign currency that is sold to the banks, and the banks will in turn sell those currencies to the traders that want to import rice sugar and other stuffs," Njie tells Africa Calling podcast.
"If they are able to secure that foreign currency at a cheaper rate because of its availability in the country you can be assured that the price of commodities they are importing to sell in the country will go down," he adds.
Groundnut price this season
At the beginning of the trade season in December 2020, the government was buying a kilo of groundnuts at 0.40 US cents while the Senegalese wholesalers were buying at 0.52 US cents.
During President Adama Barrow's nationwide tour in January, he increased the price to 0.44 US cents following public outcry--that's still 8 US cents less that what the Senegalese are paying for groundnuts.
In Farafenni, a provincial town in north bank region, Famara Fofana, a government agent, manages a government-owned purchasing center called Secco, in Wolof. He says few farmers are selling their groundnuts to the government, unlike previous years when he used to buy about 400 tons of groundnuts.
Paying around 440 US dollars or 23,000 Gambia dalasi per ton (one thousand kilos), does not seem a good price for farmers, that is why most of them prefer to sell their groundnuts to Senegalese traders.
"The Senegalese will go to the farms or houses and buy from farmers at 26 Gambian dalasi (52 US cents) per kilo and we are buying at 23 Gambian dalasi (44 US cents)-- that's the difference," says Fofana.
"Last year we bought up to 300 tons but this year we couldn't get 70 tons and that really shows that we have a failure," he adds.
While most farmers prefer to sell to the wholesalers, some are still selling to the government. Binta, also a Dippa Kunda farmer, sold her groundnuts to the government.
African free trade area
"I needed money and selling to the cooperative has more benefits that selling to those coming to our homes to buy it," she says.
"Selling here is better for me. I brought two and a half bags of groundnuts, and I was given another one and a half bag to bring along," she adds.
Africa's continental free trade area involving 54 African countries, came into effect at the beginning of the year. Both Gambia and Senegal are signatories to the trade agreement.
Farafenni holds a well-known weekly lumo, or market, attracting businessmen from both Gambia and Senegal. Most wholesalers will buy different products at the market and resell at a higher price to gain profit.
Senegalese businessman Ampateh Tambedu buys large amounts of groundnuts from Gambian farmers and resells them at the lumo. He said a groundnut that cost him 150 Senegal CFA (27 US cents/14 Gambia dalasi) will earn him over 50 CFA (9 US cents/5 Gambia dalasi) profit.
Although the Gambia is a major groundnut exporting country, it is gradually losing its ranking among top groundnut exporters due to Aflatoxin, a crop disease that emerged in 2013 and still plagues the crop today.
The toxin is widespread in the Gambia and high levels have been recorded in some areas of the country.
"It's a byproduct of a fungi call aspergillus flavus - it's born in the soil, and when the crop is maturing, if there are any hairline cracks on the pods, it can intrude," he says.
"If conditions are favourable, it can develop, but it can also happen postharvest, when the nuts are not quickly dried... there must be a good postharvest to prevent it from happening," he adds.
Aflatoxin is carcinogenic, and can cause liver cancer in humans. Not only does it contaminate groundnuts, but maize and other crops, too, he adds. The disease has stymied groundnut export to European markets, while Asian markets continue to buy Gambian groundnuts.
Part of the solution for Gambian farmers would be to eliminate Aflatoxin, which could increase exports, and perhaps raise government prices to ensure farmers are getting a just price for their wares.