Producer Organizations in Burkina Faso:
Value Added through Co-operation?
A study by
Annemieke C. Kalbfleisch
(s1201123)
Executed for SNV Burkina Faso
and
Submitted to the Department of Bedrijfseconomie, Management en Organisatie
in Partial Fulfillment of the Requirements for the Degree of Master
of science in Economics, Faculty of Economics,
at the University of Groningen
October 2006
Supervisor SNV Burkina Faso:
Drs. K.J. van Til
Supervisors University of Groningen:
The Role and Commercial Behavior of Mango Producer Organizations in Burkina Faso Acknowledgements
Acknowledgements
Before you lies the thesis of my Masters degree in Economics at the University of Groningen. It took me to Burkina Faso, one of the world’s poorest countries, where I conducted a research in the mango market for SNV Burkina Faso - a Dutch development organization. I spent many hours under the beautiful mango trees: sitting, talking, laughing and arguing with mango producers and the young people who lived next to me. It has been a valuable, challenging, inspiring and wonderful experience! I hope the result will be worthwhile.
I would not have been able to accomplish this work without the help and support of many people. Therefore, I would like to say thanks to all of those who gave me this help and support. Firstly, I would like to thank Kees Jan van Til and Clemens Lutz for giving me the opportunity to participate in this research. In addition thanks to Kees Jan van Til for being my coach in Burkina Faso, and for his overall enthusiasm. Furthermore, I would like to thank my supervisors at the University of Groningen. Dirk Akkermans, for the time he spent on improving my research; Clemens Lutz for his advice and positive words throughout the research period; to my colleagues of SNV Burkina Faso in Bobo Dioulasso who introduced me to several mango producer organizations. Finally thanks to the mango producers who were willing to answer all my questions.
A number of people have contributed a lot to making my stay in Burkina Faso more pleasant. To start with, I would like to thank ‘dad and mem’ and all my friends who kept calling and writing me. Moreover, thanks to them for supporting me throughout my graduation period. Furthermore, thanks to Karim, Draman and Yssouf for supporting us at home; thanks to my local friends for all the hours we spent talking and drinking tea under the mango tree. And last but not least, I would like to thank Joyce ten Broeke and Ewoud Ravenshorst with whom I have lived together in Burkina Faso for five months. Thanks for the support and for the fun we had together. It was great to be housemates, travel mates and to become friends.
Executive summary
This research is executed for SNV Burkina Faso and is part of a larger research which has the aim of improving market access for mango producers in Burkina Faso. Mango producers in Burkina Faso face several difficulties related to the trade of their mangoes. The domestic supply is large leaving a large part of mangoes left to rot each year, producers face low negotiating power regarding the traders, and face difficulties in getting market access outside the local domestic markets. Often it is argued that co-operation among producers - that is producer organizations – is a way to overcome these difficulties. Co-operatives have the aim of improving the economic well-being of its member-producers. That is, co-operation should be value creating for producers. Therefore, this research considers the position of small mango producers in Burkina Faso more in depth and analyses the consequences of producer organizations for the creation of value added on producer level. The main research question to be answered is: Which producer organization results in the highest value added for a single mango producer in Burkina Faso? This thesis elaborates on the following three sub-questions to answer the main research question: 1. To what degree do the mango producers in Burkina Faso co-operate?
2. Which producer characteristics will induce mango producers in Burkina Faso to adhere to mango producer organizations?
3. What are the benefits and costs of mango trade for mango producer organizations in Burkina Faso? The research is executed with the help of two economic theories: the neo-classical economic theory and
the new institutional economic theory. The former theory assumes a perfect market, which in reality does not exists. A market failure seems to arise which is the reason for which co-operatives arise. Co-operatives should add value since they act as countervailing power against oligopsonic market conditions, are a means to get market access, realize economies of scale and are a form a risk-management. The latter theory considers the reduction of transaction costs as main value creating ability of co-operatives. On the other hand, co-operatives could give rise to agency costs, which are considered internal transaction (organizational) costs. Our conceptual model concerns the relationship between co-operation and value added, which we assume to be positive (hypothesis 1). Co-operation is measured along two dimensions, namely the extent of vertical co-ordination and the membership to the organization. Producer characteristics are introduced as a control variable. Ten producer characteristics are assumed to have an influence on the value these producers derive from co-operation (hypothesis 2). Personal, household and mango business characteristics have been identified. Both hypotheses will be tested.
The Role and Commercial Behavior of Mango Producer Organizations in Burkina Faso Executive summary
qualitative analyses are alternately used in this research, whereas the conclusion is mainly qualitative in nature due to difficulties in collecting and comparing quantitative data.
Related to the first sub-question, mango producers organizations in Burkina Faso are only limitedly vertically coordinated since they mainly focus on the production and marketing of mangoes for their members. Besides, the density of mango producer organizations is rather low which depicts them as externally weak organizations: only a small fraction of potential members is currently a member. Concerning the second sub-question, member producers of these organizations seem to have smaller land and mango plot sizes, a lower wealth level and are more often illiterate than individual mango producers do have. The mango plot size is considered the main characteristic of influence on the decision whether or not to co-operate. Solidarity aspects do matter as well. Turning to the third sub-question, producer organizations seem to trade mainly on the export market. Value added on the export market is highest, because prices are highest and producers do only have to incur few costs. Since individual producers have access to the export market as well and export generally pays the highest prices, at first sight one should conclude that the value creating ability of mango producer organizations is best visible at the local, national and sub-regional markets. However, taking into account the mango producer characteristics leads to nuances. Mango producer organizations are creating value for members since they provide mango producers having small mango plots with access to the export market they previously did not have. This allows the small mango producers to benefit from the higher export prices. Combining the answers on the sub-questions leads to an answer on the main research question. WOUOL and UDPFK both are creating the highest value for members. These organizations are both creating value for members at the national, sub-regional and export markets. Other producer organizations currently only generate value on the export market by providing small mango producers with access to the export market they previously did not have. Hence, mango producer organizations in Burkina Faso could expand their value creating ability by trying to harmonize prices at the national and sub-regional markets as well.
ACKNOWLEDGEMENTS... 2
EXECUTIVE SUMMARY ... 3
TABLE OF CONTENTS... 5
LIST OF ABBREVIATIONS... 7
LIST OF FIGURES AND TABLES ... 8
1 INTRODUCTION ... 10 1.1 INTRODUCTION... 10 1.2 PROBLEM STATEMENT... 11 1.3 MOTIVATION... 12 1.4 OBJECTIVE... 12 1.5 RESEARCH QUESTIONS... 12
1.6 STRUCTURE AND OUTLINE... 13
2 THEORETICAL FRAMEWORK ... 14
2.1 INTRODUCTION – THE NATURE OF CO-OPERATIVES... 14
2.2 HYPOTHESIS AND CONCEPTUAL MODEL... 15
2.3 THEORETICAL BACKGROUND... 17
2.3.1 The neo-classical economic perspective ... 17
2.3.2 The new institutional economic perspective ... 19
2.4 THE CONCEPTUAL MODEL FURTHER EXPLAINED... 21
3 METHODOLOGY ... 22
3.1 RESEARCH MODEL... 22
3.2 MEASUREMENTS OF THE CONCEPTS... 22
3.2.1 Degree of co-operation... 22
3.2.2 Mango producer characteristics... 24
3.2.3 Value added ... 25 3.3 DATA COLLECTION... 26 3.3.1 Research period ... 26 3.3.2 Populations ... 27 3.3.3 Samples... 28 3.3.4 Questionnaire ... 28 3.4 DATA ANALYSIS... 29 3.5 LIMITATIONS... 29
4 BURKINABÉ MANGO – POSITIONING, PRODUCTION AND TRADE... 30
4.1 POSITIONING OF THE BURKINABÉ MANGO... 30
4.2 THE BURKINABÉ MANGO... 31
4.2.1 Production ... 31
4.2.2 Trade... 32
4.2.2 Trading partners ... 34
4.3 MANGO PRODUCER ORGANIZATIONS – AN INTRODUCTION... 36
4.3.1 UFMB... 36 4.3.2 Faso Djigui... 38 4.3.3 WOUOL ... 38 4.3.4 SOCABE ... 39 4.3.5 FEDAF ... 39 4.3.6 UDPFK ... 40 4.3.7 UAFK ... 41 4.3.8 YOUNPIE ... 41
5 MANGO PRODUCER ORGANIZATIONS AND MANGO PRODUCERS ... 42
The Role and Commercial Behavior of Mango Producer Organizations in Burkina Faso List of abbreviations
5.1.1 Degree of co-operation - Two dimensions: vertical co-ordination and membership... 42
5.2 MANGO PRODUCERS WITHIN THE LARGER FARM HOUSEHOLD... 45
5.2.1 Mango producer characteristics... 45
5.2.2. Organized and individual mango producers – main differences... 47
5.3 CONCLUSION... 48
6 VALUE ADDED ... 49
6.1 THE CREATION OF VALUE ADDED... 49
6.2 BENEFITS -PRICES AND MARKET ACCESS... 49
6.2.1 Benefits – the export market... 49
6.2.2 Benefits – local, national and sub-regional markets... 51
6.2.3 Benefits – conclusion ... 53
6.3 COSTS... 53
6.3.1 Costs - Production costs ... 53
6.3.2 Costs - Marketing costs ... 54
6.3.3 Costs - Transaction costs... 55
6.3.4 Costs - Agency costs ... 56
6.3.5 Costs - Affiliation fees... 58
6.3.6 Costs – Conclusion ... 59
6.4 CONCLUSION... 59
7 CONCLUSION AND DISCUSSION ... 63
7.1 VALUE ADDED THROUGH CO-OPERATION?... 63
7.2 SUCCESSFUL CO-OPERATION –CONTRIBUTORS... 66
7.3 STRENGTHENING PRODUCER ORGANIZATIONS... 67
7.3.1 The role of mango producers ... 67
7.3.2 The role of mango producer organizations... 68
7.3.3 The role of SNV Burkina Faso ... 68
7.4 RECOMMENDATIONS FOR FURTHER RESEARCH... 69
List of abbreviations
CDS Cercle de Secheurs
FAO Food and Agricultural Organization
FEDAF Féderation des Agriculteurs Fruîtières
FLO Fairtrade Labelling Organization
GAP Good Agricultural Practices
GIE Groupement d’ Intérêt Economique
INERA Institute de l’Environnement et de Recherche Agricole INSD Institute Nationale de Statistiques Démographiques SOBFEL Société Burkinabé des Fruits et Légumes
SOCABE Société Coopérative de l’Agricultur de Bérégadougou UAFK Union des Agriculteurs Fruîtière de Kénédougou
UDPFK Union Départementale de Producteurs Fruîtière de Koloko UFMB Union Fruîtière et Maraîchère de Burkina Faso
The Role and Commercial Behavior of Mango Producer Organizations in Burkina Faso List of figures and tables
List of figures and tables
Figures
Figure 2.1. The conceptual model
Figure 3.1 Measurement of the degree of co-operation; First dimension: the provision of tasks in the value chain
Figure 3.2 Theoretical and practical classification of costs Figure 3.3. Mango production zones in Burkina Faso Figure 3.4. Outline of the analysis
Figure 4.1. Distribution of mango varieties in the South West region of Burkina Faso
Figure 5.1. Household income in Burkina Faso: monetary and non-monetary income, a rough estimation
Figure 6.1. The various components of value added
Figure C1. Producer organizations according to the co-operative law (la loi quatorze) of Burkina Faso
Figure J1. Overview of mango varieties in the South West region of Burkina Faso
Tables
Table 3.1. Relevant producer characteristics: definitions and measurement Table 3.2. Sample of producer organizations
Table 4.1. Mango production seasons in the South West region of Burkina Faso Table 5.1. Analysis of the degree of co-operation
Table 5.2. Summary of producer characteristics: organized versus individual mango producers
Table 6.1. Export prices for organized mango producers Table 6.2. Export prices for individual mango producers
Table 6.3. Prices on the local, national and sub-regional markets Table 6.4. The creation of value added on different markets
Table 6.5. The creation of value added for each producer organization Table 7.1. Overview of findings to verify hypotheses
Table A1. Economic and human development indicators of Burkina Faso Table D1. Sample of organized mango producers
Table D2. Sample of individual mango producers
Table K1. Agricultural producers as an approximation for the number of mango producers Table K2. Details on the measurement of density
Table L2. Producer characteristics of individual mango producers Table M1. Weight statistics of mangoes
Table M2. Prices on the local market per small number of mangoes
Table N1. Investments in preparation and production costs in the non-productive years Table N2. Investments in certification
Table N3. Investments to change varieties or to rejuvenate trees: new plants versus grafting
Table O1. Mango production costs
Table P1. Fixed labour costs
Table P2. Costs of harvesting for national and sub-regional markets
Table P3. Costs of transport
The Role and Commercial Behavior of Mango Producer Organizations in Burkina Faso 1 Introduction
1 Introduction
1.1 IntroductionThis research on mango producers and producer organizations is executed for SNV Burkina Faso in collaboration with the Faculty of Management and Organization of the RijksUniversiteit Groningen. SNV is a Dutch-based international development organization active in five regions: Asia, Latin America, the Balkans, West Africa and East and Southern Africa. In these regions SNV provides advisory services to nearly 1800 local organizations to support their fight against poverty. General practice areas include: market access for the poor, responsive and accountable local government, collaborative forest management and sustainable tourism.
Burkina Faso belongs to the region Sub-Saharan Africa, which is still one of the poorest parts of the world. It is a land-locked country within West Africa; having only few natural resources and a weak industrial base, it belongs to the top five of the world’s poorest countries. Agriculture is important in Burkina Faso. Around 90% of the total labour force is working in agriculture (CIA Factbook, 2006). However, its contribution to national GDP is limited, this because a large share concerns subsistence agriculture. Moreover, agriculture is vulnerable to climatic conditions ( CIA and Worldbank, 2006). Burkina Faso’s most important export product is cotton: more than 50% of total merchandise export comes from the export of cotton and more than 2 million people depend on cotton production in Burkina Faso, even though cotton exports account only for 2.5-6.7 % of GDP (FAO, 2004). Other export products include: shea nuts and butter, gold, cattle, poultry, sesame and fruit and vegetables. Within the fruit and vegetables sector, the mango is the most important product, both in volume and in surface. Annex A shows the important economic and human development indicators of Burkina Faso (Worldbank, 2006).
This research is part of a larger research which aims at improving the market access for mango producers in Burkina Faso. The mango market will be analysed from different points of view. The philosophy behind this broad scope is that most problems in developing countries, like most problems in management and organization, require a multi-disciplinary approach. The five axes on which this larger research focuses are:
Competitive logistic systems linking Burkina Faso and Europe
Marketing and sales possibilities for Burkina Faso in the West African sub-region Commercial collaboration possibilities between Burkina Faso and Ghana
This research report focuses on the role and commercial behavior of mango producers and producer organizations within Burkina Faso. The main theme in this research is the creation of value added for mango producers in Burkina Faso through co-operation via producer organizations.
1.2 Problem statement
The production and demand for mangoes in the world market have increased steadily in recent decades (FAO, 2005). In Burkina Faso mango orchards are abundant, mainly in the South West region of Burkina Faso. The favourable world mango import projections for the future – for among others the European Union - and the possibility to commercialise mangoes to neighbouring countries with a low supply of mangoes due to climatic conditions – for example Niger and Ghana – together make the mango market an interesting object of study. Although the bulk of mangoes – around 90 percent - is traded domestically or in the sub-region, a further 5 percent is traded as fresh products and a similar 5 percent is traded as processed products on the global markets. Despite the small proportion that is traded internationally, the value of this trade is significant (FAO, 2004). Hence, the trade of mangoes could offer producers in Burkina Faso opportunities for poverty alleviation.
Nevertheless the trade of mangoes stays problematic for mango producers in Burkina Faso. Several reasons exist: small producers have low negotiation power regarding the traders who buy at the farm-gate at low prices and mango producers experience difficulties in obtaining market access outside the local market. Lack of trade opportunities leads to a large supply of mangoes on the domestic markets which forces down the prices.
Hence, unequal power and unequal access to resources between different social groups can have negative effects on the initial welfare-enhancing opportunity of the trade mangoes. It is often stated that mango-producers in Burkina are in a weak position to negotiate on prices and to obtain market access to trade their mangoes, because they are poorly organized. To derive greater benefits from the trade they help generate, producers should organize themselves in order to restore the balance of power and to improve their production and marketing conditions. For the theoretical discussion on the creation of value by co-operatives see section 2.3. in the next chapter.
The Role and Commercial Behavior of Mango Producer Organizations in Burkina Faso 1 Introduction
In the late 1990s co-operative restructuring efforts were undertaken in Burkina Faso, and in many more countries in Sub-Saharan Africa (FAO, 1998). Political and economic changes have led to a new government interest in making the agricultural co-operative movement more autonomous, more independent of government intervention and control. This government disengagement process may have consequences for the functioning of co-operative organizations and their member-producers in the mango-market of Burkina Faso. This research will take a closer look at the way in which small mango producers are organised, their characteristics, and the functioning of the co-operative organizations: that is the ability of producer organizations to create value for their member producers.
1.3 Motivation
The livelihood of many poor farmers all over the world depends mainly on the production and trade of agricultural commodities. Indeed. most poverty is rural poverty. The price small producers receive for their commodities can have major implications for poverty alleviation. Agricultural growth can increase the incomes of the poor and deliver better food supplies while increasing opportunities for profitable trade in domestic, regional and global markets (USAID, 2004).The abundance of mango orchards and the large number of small mango producers in Burkina Faso, makes these producers an interesting object of study. Most studies on co-operation focus on the organization, whereas the focus in this study is both on the producers and the organizations. Consequences of co-operation are analysed on producer level: benefits, costs, difficulties and opportunities. It is interesting to know if co-operation is a way to create more value added for an individual mango-producer in Burkina Faso. In addition, when co-operation turns out to be value creating, it will be important to strengthen producer organizations.
1.4 Objective
The overall research in the mango market has as objective to improve market access for the mango producers in Burkina Faso. The focus in this research is on the producers and producer organizations and the corresponding objective at this level is:
To provide advice to SNV about the performance of producer organizations, considering the creation of value added for mango producers in Burkina Faso.
1.5 Research questions
To achieve the objective the following main research question has been formulated:
Which producer organization results in the highest value added for a single mango producer in Burkina Faso?
1. To what degree do mango producers in Burkina Faso co-operate?
The degree of co-operation among producers might be an indicator for the strength of producer organizations. The next two chapters will respectively discuss the strength of producer organizations from a theoretical and a measurement perspective. In brief, the degree of co-operation measures (a) the tasks the producer organization performs and (b) the size of membership to the producer organization.
2. Which producer characteristics will induce mango producers in Burkina Faso to adhere to mango producer organizations?
It is interesting to know whether individual mango producers do differ from their organized competitors. Differences in characteristics between these two groups of mango producers may form an indication for the motives of producers to adhere to producer organizations since producer organizations should act in the interest of their members.
3. What are the benefits and costs of mango trade for mango producer organizations in Burkina Faso? The difference between the benefits that are derived from mango trade and the costs that are incurred in mango trade form the basis for the measurement of value added through trade of mangoes. In particular, the focus is on the creation of value added through co-operation. That is, we try to assign the value added for organized producers to each producers organization. The value added for individual producers will be measured as well.
1.6 Structure and outline
The Role and Commercial Behavior of Mango Producer Organizations in Burkina Faso 2 Theoretical framework
2 Theoretical framework
2.1 Introduction – the nature of co-operatives
In the previous chapter we have talked about producer organizations, however in the literature the notions
co-operatives or co-operative organizations are more common. No considerable differences exist in content, that
is why these definitions are used alternately throughout this research.
Many definitions of co-operatives do exist in the literature. According to Ruben (1997) a widely accepted concept of co-operatives defines this type of organization as a ‘voluntary association of persons who have agreed to work together on a continuing basis to pursue their common interests and who, for that purpose, form an economic organization which is jointly controlled and whose costs, benefits, and risks are equitably shared among the membership’. A broader definition defines a co-operative organization as a ‘coalition of members’ or a ‘focal point for a set of contracts’ (Ruben, 1997 and Zimmerman, 1997). Van Dijk (2005) argues that all co-operatives have in common that the co-operative firm adds value and distributes this value to its members. Co-operatives have to be successful in the market - just as any other business – and additionally they should meet the objectives of their member-producers. Co-operatives differ from other businesses, because co-operatives are based on three concepts as defined by Barton (1989, in D. Cobia):
The user-owner concept
Producers who own and finance the co-operative are those who use it. The user-control concept
Producers who use the co-operative also control the co-operative. The user-benefits concept
Benefits of the co-operative are distributed to its members on the basis of use.
recognized as necessary elements for successful co-operation (Münckner, 1988 in Ruben). Further specification of these co-operative principles can be found in Annex B.1
Cobia (1989) makes a functional classification into marketing co-operatives, services co-operatives and supply co-operatives. The primary function of marketing co-operatives is the marketing of farm products for member-producers. Bergman (1997) specifies marketing co-operatives further as ‘an arrangement that enables a large number of small sellers to coordinate strategies (such as price) when selling a good and exploit returns to scale. Supply co-operatives provide producers with a steady, dependable supply of farm inputs at competitive prices. Service cooperatives offer producers a wide variety of specialized services related to farm purchasing and marketing, among others insurance, utilities, and extension services. For co-operative organizations to prosper, a co-operative law is necessary and is one of the contributors to the creation of a supportive co-operative environment (Hagen, 2002). Co-operatives in Burkina Faso are subject to the current co-operative law (loi quatorze) which distinguishes several co-operative structures: (i) a groupement and a coopérative as primary co-operatives; (ii) a union as at least a secondary co-operative, having primary co-operatives as member organizations and (iii) a féderation or a confederation as at least tertiary co-operatives, regrouping two or more unions. According to this law co-operatives should be structured around one product or product group. The co-operative law and the corresponding linkages between the different co-operative structures in Burkina Faso are shown in Annex C.
2.2 Hypothesis and conceptual model
As is already shown in the problem statement, small producers in Burkina Faso are experiencing difficulties in the production and trading of their mangoes. They experience difficulties in obtaining access to markets and in negotiating favorable prices.
According to Sporleder (mentioned in Szábo, 2002) vertical co-ordination among producers can be a way to control factors, e.g. price, quantity, quality and terms of exchange. The scale of vertical co-ordination runs from the spot (open) markets to complete vertical integration (Peterson- Wysocki in Szábo) in the sense that producer organizations perform several stages in the production marketing chain. Besanko (2000) mentions that value added is created when goods move along this vertical chain in such a way that the value that resides in the product is larger than the value of the inputs that are sacrificed to move the product along the chain. This implies that vertical integration could lead to the creation of more value added since producer organizations can capture a margin previously captured by third parties in the chain.
The Role and Commercial Behavior of Mango Producer Organizations in Burkina Faso 2 Theoretical framework
In addition, Ebbinghaus (2002) states that membership is a crucial and multiple resource for the continuity of voluntary organizations2, since this is the basis for the performance of action as stated above.
Furthermore, according to Jose (2000) the strength of co-operatives3 depends on whether co-operatives
have built a solid base through membership of the producers they represent. Moreover, co-operatives with a high membership can enter easily into more stable relationships with suppliers and traders, perhaps even with donors (Overseas Development Institute, 1997).
Our conceptual model assumes that co-operation among producers – that is producers organizations - may be a way to overcome or diminish the difficulties that small mango producers in Burkina Faso are currently experiencing. Co-operation among mango producers is seen as a way to improve revenues or to provide producers with market opportunities. Hence, co-operation is regarded as a way to create value for their members (see: Cobia, 1989 and Van Dijk, 2005). The relationship between co-operation and the creation of value added is assumed to be positive: the stronger the co-operation between producers, the more value added is created for a single mango producer. Producer characteristics do matter in the sense that producer organizations should act in the interests of their members, hence differences in producer characteristics might induce differences in interest which could cause differences in organized and individual producers. The conceptual model is graphically shown in figure 2.1 below.
Producer characteristics
Degree of
co-operation Value added
Figure 2.1. The conceptual model
From the conceptual model we derive two hypotheses which are presented on the next page. The hypotheses make an assumption about the relationships between the concepts. Each arrow in the figure 2.1. represents an hypothesis. The first hypothesis concerns the main relationship of interest in this research, namely the creation of value added through co-operation. The second hypothesis concerns the influence of producers’ characteristics on this main relationship.
2 Ebbinghaus discussed trade unions, but most of his arguments are valid for co-operatives as well. He used the classic definition of trade unions by Webb and Webb (1894) as ‘a continuous association of wage earners for the purpose of maintaining or improving the conditions of employment’, which could easily be adapted to derive the mentioned definitions of co-operatives (Van Dijk, Ruben, Cobia);
Hypothesis 1:
The higher the degree of co-operation -- that is: (a) the more the producer organization is vertically integrated and (b) the larger the size of the membership to the producer organization -- the more value added will be created for member producers.
Hypothesis 2:
Producers’ characteristics are expected to influence the relationship between co-operation and the creation of value added in such a way that co-operation might be more value-creating for producers with certain characteristics than it is for others. We therefore assume differences in characteristics between individual and organized mango producers.
2.3 Theoretical background
This section provides a theoretical basis of co-operation. Through the use of the neo-classical economic theory and the new-institutional economic theory the concepts through which producer organizations are assumed to add value and the concepts that limit the creation of value added are discussed.
2.3.1 The neo-classical economic perspective
The Role and Commercial Behavior of Mango Producer Organizations in Burkina Faso 2 Theoretical framework
structure to trade products (Hendrikse, 1998). In other words, the rational economic reason for why co-operatives arise is market failure (Schrader, 1989).
The neo-classical economic literature provides many reasons through which co-operatives should add value to their members. Mentioned by different authors (Yonli, 1997; Van Dijk and Klep, 2005; Cobia, 1989) the main value enhancing advantages of co-operatives include:
Co-operatives as countervailing power against oligopsonic market conditions
Co-operatives are assumed to enhance the bargaining power of small producers. Bargaining power is the ability to influence to one’s own advantage the terms of trade in any transaction or series of transactions. Moreover, it is the ability to influence any of the aspects that would enhance selling or purchasing activity, such as product development, quality standards, government regulations and expanding demand (Cobia, 1989).
Co-operatives as a means to get market access
Market access is the ability of producers to serve a specific market or to serve a specific client. In particular, market access may include the access to credit, the access to information and training, or the access to export markets (Van Dijk, 2005). Co-operation among producers offers the ability to fulfil larger orders or to improve the quality of the products through learning or training, which is more easily facilitated in groups than individually. Moreover, agricultural markets are often characterized by asymmetric information. This is a situation in which an unbalance exists in the availability and spreading of information to both parties on a market. Co-operation may be a means to share and exchange market information, thereby increasing the market transparency.
Co-operatives to realise economies of scale
Besanko (2000) said economies of scale are present when average costs are declining over a range of output, because the fixed costs are spread over a larger output. Economies of scale will result in reduced costs of input supply and product marketing for agricultural producers when the size of the operation increases (Cobia, 1989). One of the additional virtues of economies of scale is professionalism, but it may be a by-product of co-operatives as well (Van Dijk and Klep, 2005). Both the scale and the collaboration allow co-operatives to exchange, share, hire and develop expertise and professionalism through training, learning and knowledge-sharing.
Co-operatives as a form of risk-management
you cannot access individually for technical or financial reasons. Second, co-operatives provide access to activities of which the individual perceived risk is too high. For example, a co-operative organization having a processing unit in-house – that is a shared investment - enhances trade opportunities for the member-producers and hence reduces the risk for these producers.
This far we have discussed the value-enhancing advantages of co-operation from a neo-classical perspective. In summary, co-operatives can have significant advantages when there is a considerable market failure problem, which may be especially true in some cases of perishable products, like in the cases of fruit, vegetables and milk (Szábo, 2002). Now we are going to focus on the new-institutional economic explanations underlining the value-enhancing advantages and the corresponding limitations of marketing co-operatives.
2.3.2 The new institutional economic perspective
Relevant new institutional economic theories for the relationship between co-operation and value added are the transaction cost theory and the agency theory. The transaction costs theory can be used to discuss the value-adding advantages of vertical integration by agricultural marketing co-operatives (Zsábo, 2002). The agency theory in turn can be used to explain the limitations of co-operation between producers. Transaction costs are initiated by Coase (1937) and further developed by Williamson (1985). Transaction costs arise, because individuals have to search, negotiate and enforce contracts and this may be costly due to the fact that individuals are assumed to behave opportunistically and their rationality is limited (Williamson, 1985). According to this definition transaction costs are divided into three categories: information, negotiation and enforcement costs (Besanko, 2000 and Hendrikse, 1998). In Ruben (1997) we find that transaction costs are important in agriculture, due to the high uncertainty in production and marketing. Zsábo (2002) adds that the frequency of agricultural transactions might be high. Uncertainty and frequency are both two of the key determinants of transaction costs The other key determinant of transaction costs is asset specificity (Williamson, 1985). Relationship specific assets are essential for the efficiency of a given transaction (Besanko, 2000). This means that investments at producer level – e.g. investments related to the certification4 or investments in specific varieties demanded on the export
market – are specific for the producer’s trading partner, which can easily cause a ‘lock-in’ situation due to opportunistic behaviour of the producer’s trading partner. The threat arising from this situation can be avoided by integrating the producer and the trading partner – an exporter or processor – into a single governance structure (Van Dijk, 2005).
Bouma et al. (2001) mention the importance of finding efficient governance structures: organizational forms which minimize the sum of the production and transaction costs. According to the transaction cost
The Role and Commercial Behavior of Mango Producer Organizations in Burkina Faso 2 Theoretical framework
theory co-operatives or producer organizations can be a way to minimize the sum of production and transaction costs, since production costs are assumed to be constant during the time and the process (Williamson, 1985). Hence, through reduced transaction costs, agricultural marketing co-operatives should add value to their members, because members have to spend less time and effort in making frequent and uncertain agricultural transactions. In addition, Zsábo (2000) also summarizes some non-economic reasons for why co-operatives reduce transaction costs: (i) co-operatives used to be considered as organized trusts, which is especially true for smaller communities, e.g. in villages and (ii) the social and informal network play their role, since better knowledge and confidence among members are highly important in explaining the success of co-operatives.
As already mentioned, limitations to the value-enhancing capacity of co-operatives are explained by the agency theory. The agency theory deals with the relationship between a principal and an agent and assumes a conflict of interest between both parties. Owners of a co-operative organization are the member-producers, and the management of a co-operative organisation may be performed by the either member-producers or external parties. The agency problem is highest when the co-operative organization is managed by external parties that are not producers. Agency problems give rise to so-called agency costs. Two groups of agency problems within marketing co-operatives can arise. The first groups deals with the investment related agency problems - the free-rider problem, the horizon problem, and the portfolio-problem-, whereas the second group deals with decision-making related agency problems – the follow up problem and the decision problem (Zsábo, 2002).
First considering the investment related agency problems, free-rider problems can occur in two situations. On the one hand, member-producers can act like an internal free-rider when this member is not loyal and yields no performance at times when this may be expected and when the co-operative firm counts on its members. Duties for member producers include among others: delivery of all the products according to contracts, capitalization of the co-operative, and participation in strategic discussion. On the other hand, an external free-rider is a non-member, who still may enjoy many benefits of the co-operative’s market behavior. Co-operatives that do not solve their free-rider problems, may eventually kill the co-operative itself. Second, the horizon problem arise when old member producer who are close to their exit, are reluctant to participate in long-term investments – to which they have to contribute, but from which they will not benefit. Furthermore, the portfolio problem arise when members are not able to make investments in the co-operative with regard to their own risk-preferences and assets (Van der Waal, 2005) Second, considering the decision making agency problems, we distinguish the follow-up problem related to the follow up of the management and the decision problem of the management when large heterogeneous interests exist between different member producers (Zsábo, 2002).
internal transaction (organizational) costs. However, since co-operatives are still a favourable form of business, we assume that the benefits of operation are larger than the costs. Hence, we assume co-operatives are creating value.
2.4 The conceptual model further explained
This section further explains the conceptual model which has been represented in figure 2.1. The relationship between the degree of co-operation and the creation of value added is the main interest of study in this research.
As the neo-classical economic theory explained, a higher degree of co-operation results in more bargaining power, more scale economies and makes access to markets more easy. Thus, the neo-classical economic theory expects higher prices and lower costs due to co-operation. The new-institutional economic theory additionally mentions the existence of transaction costs as a reason for why co-operatives arise. In turn this theory describes the rise of internal transaction costs in larger co-operative organizations which reverses the relationship between the degree of co-operation and the creation of value added. Nevertheless, we expect this relationship to be positive as is indicated by hypothesis 1.
The Role and Commercial Behavior of Mango Producer Organizations in Burkina Faso 3 Methodology
3
Methodology
3.1 Research model
The framework of this study is the conceptual model as presented in figure 2.1 in the previous chapter. . The underlying hypothesis states that the higher the degree of co-operation, the higher will be the value added that is created for a single mango producer in Burkina Faso. The characteristics of the producers are taken as a control variable into this relationship.
3.2 Measurements of the concepts
The research model incorporates three concepts – degree of co-operation, producer characteristics and value added - which will be defined in the next three sub-sections. Every concept will be made operational which means that the concept is stated in specific measurement criteria (Cooper and Schindler, 2003). 3.2.1 Degree of co-operation
The degree of co-operation is measured along two dimensions. First, the degree of co-operation takes into account the extent of vertical integration of producer organizations, that is the extent to which producer organizations perform several stages in the production marketing chain. Therefore, the production marketing chain of mango producers is divided into seven stages: supply; services; production; marketing; harvest, selection and transport; conditioning; and industrialization. In addition, each stage is assigned one or more tasks which producer organizations can perform. Hence, the degree of co-operation identifies the stages of the production marketing chain in which the organization is active. The value chain5 forms the
basis for the measurement: each stage in this value chain is assigned several tasks. Stages and corresponding tasks are defined in figure 3.1. on the next page. However, it is the number of tasks that is ultimately measured to arrive at the first dimension of the degree of co-operation. The number of tasks per stage might differ. The measurement of tasks is based on two basic principles defined by Cooper and Schindler (2003). Proper classification of tasks in the producer’s marketing chain assures (i) that all the possible tasks are included in the classification (exhaustiveness) and (ii) that the tasks and services can be placed in one and only one category (mutual exclusivity). These two rules allow the number of tasks performed for every producer organization to be counted. Each tasks is assigned weight ‘one’, so that every task performed counts equally. Although one can question whether this is correct or whether the importance of the tasks differs considerably, we took here the simplest option. Nevertheless, we think the degree of operation measured in this way gives a good presentation of the extent of vertical co-ordination. Moreover, the measurement is accompanied by a descriptive analysis. The measurement column presents the maximum points to be obtained in each stage.
Value chain Definition Tasks Maximum measurement Supply Provision of inputs - Provision of fertilizer, young plants, etc.;
- Provision of agricultural equipment: a plough, etc.
2 points
Service Provision of services - Access to credit 6, e.g. provision of pre-finance or investment credit - Political lobbying
2 points
Production Production of good-quality mangoes
- Training to maintain and improve production; - Assistance in obtaining certification of orchards7
2 points
Marketing Trade of mangoes on different markets
-Searching market opportunities; - Price negotiation8
2 points
Harvest, selection and transport
Harvest and selection of demanded mangoes and transport to the next buyer
- Provision of harvest teams (harvest, selection,
and transport) 1 point
Conditioning Conditioning of the mangoes in pack-house
- Provision of
conditioning in house 1 point
Industrialization Being either processor or exporter
- Performing the processing of mangoes; - Performing the export function9
2 points Figure 3.1. Measurement of the degree of co-operation; First dimension: the provision of tasks in the value chain
Second, the degree of co-operation incorporates the size of membership. A common indicator for the strength of co-operation from a membership-perspective is the density (Ebbinghaus, 2002). According to Jose (2000), the density is the most visible symbol of union strength. The measurement of the density is shown below in equation 3.1.
Density = the number of affiliated mango producers ÷ the total number of mango producers in the membership area of the producer organization10 (3.1.)
Since Burkina Faso lacks statistics about the number of mango producers we are forced to use the number of agricultural producers as a second best alternative to approximate the number of mango producers. Even when the density is measured as a percentage, the number turns out to be very small for all producer organizations which complicates making comparisons. Hence, we might choose to use and measure the absolute size of membership in our analysis as well, equal to the numerator in equation 3.1.
6 Access to credit might be an output variable as well; however we chose here to regard it as an input.
7 Certification is measured only once; whether fair-trade, biological or Eurepgap certified is measured as output. 8 The result of the two marketing tasks – market access and prices – are output variables: they are measured under value added.
9 To perform the export function a so-called GIE status is needed; GIE is a legal structure, similar to a limited company
The Role and Commercial Behavior of Mango Producer Organizations in Burkina Faso 3 Methodology
3.2.2 Mango producer characteristics
Co-operatives are creating value added for their members when they increase the economic well-being through the provision of the services and tasks their members need. Differences in producers’ characteristics might induce differences in interests and needs of mango producers. In turn this might be an indication that some characteristics induce co-operative membership since these producers consequently derive more value from co-operatives. Moreover, differences between organized and individual producers might also explain the ability of producer organizations to create value for their members. We selected ten characteristics that might influence the creation of value added through co-operation. We distinguish three categories of producers’ characteristics which respectively relate to: (I) the person, (II) the household, and (III) the mango marketing channel. All three categories are important since they explain the interest mango producers have in co-operation and the ability they have to participate in co-operation (USDA). Different scenarios exist, so that measurement and analysis have to find out which categories and which characteristics do matter in the creation of value added. In the table 3.1. below the characteristics are identified, defined and the measurement is indicated.
Producer characteristics Definition Measurement
I. Personal characteristics
1. Literacy Ability of mango producers to read and write 1 = Literate; 0 = Illiterate 2. Experience Years of experience in mango production In # of years 3. Other co-operative
membership Whether mango producers are member of another co-operative organisations, within or out of the mango market
1 = member of other organization(s);
0 = no member of other organization (s)
II. Household characteristics
4. Land size Number of hectares devoted to production for
consumption and commercialisation In # of hectares 5. Household production The other production activities of the household, for
both consumption and marketing purposes Description of other activities 6. Household wealth The agricultural material present within the
household 1 = Presence of: plough, cattle or other agricultural equipment;
0 = Absence of any material
III. Mango business characteristics
7. Mango plot size Number of hectares devoted to mango production In # of hectares 8. Importance of mango
income The importance of mango income based in the total household income ( 4-point Likert scale) 1= very important; 4 = not important 9. Certification11 Whether or not the mango producers are biological/
fair-trade and/or Eurepgap certified FLO = Fair-trade; Ecocert = Biological; Eurepgap
10. Informal co-operation Whether mango producers co-operate informally – that is not within a formal structure – with other mango producers
1= Informal co-operation; 0 = No informal co-operation
Table 3.1. Relevant producer characteristics: definitions and measurement
3.2.3 Value added
The interest is on the value added that can be derived from the trade of mangoes. Value added is measured as the difference between the benefits and costs (Besanko, 2000). The measurement of the relevant benefits and costs will be described below.
Benefits
Since the discussed theories expect producer organizations to have better market access and more bargaining power, important indicators for the measurement of benefits are the prices producers receive and the trade markets they have access to. Unfortunately, producers did not keep track of their sales volumes so that we consequently cannot say anything about the amounts traded on different markets. The measurement of the benefits therefore takes into account (i) the markets that are served by each producer organization and (ii) the output prices producers receive, either via their producer organization or individually. To compare the trade via producer organizations with the individual trade, a complete overview of output prices for both forms of trade will be given.
Costs
The basis for the measurement of costs is the theoretical classification of North and Wallis (1994) into transformation and transaction costs. Their classification has been adapted and specified for the purpose of this research, which is explained and described below. The differences between the theoretical and practical classifications are graphically shown in figure 3.2. on the next page.
First, transformation costs are the costs of physically taking land, labour and capital and making physical things. Transformation costs, more specifically, are the costs that change the physical attributes of goods: size, shape, colour, location, chemical composition and weight for example. We further specify the transformation costs into production costs and marketing costs. In particular, marketing costs are the costs of harvesting, selecting and transporting the mangoes to the first buyer. These costs will be measured quantitatively. Producer organizations are assumed to decrease the production and marketing costs.
The Role and Commercial Behavior of Mango Producer Organizations in Burkina Faso 3 Methodology
Third, an additional cost category concerns the affiliation fees or membership costs that have to be paid by organized producers.
Theoretical classification Practical classification
Production costs Costs Transformation costs Marketing costs (North and Wallis, 1994) Transaction costs Transaction costs Agency costs Affiliation fees
Figure 3.2. Theoretical and practical classification of costs. Source: North and Wallis (1994), adapted for this research
Although we initially planned to measure all benefits and costs quantitatively so that we could easily assign the value added to each producer organization, we did not succeed. Main reasons include the fact producers and producer organizations were not able to indicate their (co-operative) sales volumes and some costs - like the transaction costs and agency costs - were hard to assign a monetary value. We therefore made use of Likert scales and group discussions which highlighted costs qualitatively. As a consequence the value added is measured qualitatively as well.
3.3 Data collection
To collect the data for the objective of this research a multi-disciplinary approach is used. This approach makes use of both desk- and field research and ensures that information from different sources is gathered (Saunders et al, 2000). More details on the data collection follow in the coming sub-sections. 3.3.1 Research period
To structure the data collection in this research, four phases are distinguished, of which only the first three concern data collection.
1. Desk research in the Netherlands and Burkina Faso (August 2005 – December 2005)
2. Desk research in Burkina Faso (October 2005 – December 2005)
Consultation of internal and external documents regarding the mango market provided by SNV Burkina Faso;
3. Field research in Burkina Faso (December 2005 – March 2006)
Conducting interviews with producers and producer organizations, supported in the beginning by several consultants of SNV who provided the introduction to the producer organizations. In addition, some interviews were conducted with Burkinabé experts in the field of producer organizations and the co-operative movement of Burkina Faso.
4. Desk research in the Netherlands (April 2006 – September 2006) Analysis and theoretical aligning of the collected data.
3.3.2 Populations
This research is conducted in the South West region of Burkina Faso, the region that contains according to estimations around 80% of the mango production in Burkina Faso (Sicarex, 2000). This region makes up of the provinces Léraba, Comoé, Kénédougou and Houet. Other mango production zones are in the Centre -19.5%- and the Sahel zone - 0.5% (Sicarex, 2000). The graphical map of Burkina Faso presented in figure 3.3. below shows the situation of the mango production zones (in green) and the place where the field-work took place (the circle).
Figure 3.3. Mango production zones Burkina Faso
The Role and Commercial Behavior of Mango Producer Organizations in Burkina Faso 3 Methodology
3.3.3 Samples
Missing statistics about the population of mango producers and producer organizations in Burkina Faso had consequences for the sampling technique. First, the main part of the producer organizations were identified with the help of consultants of SNV Burkina Faso. The consequence is that most sampled producer organizations are clients of SNV, the only exception is groupement YOUNPIE. One producer organization – the COOAPCK in Orodara – refused collaboration in this research and therefore does not belong to our sample. The sample of eight producer organizations is presented in table 3.2 below. Qualitative descriptions of these producer organizations and their functioning will follow in the next chapter. Those producer organizations shaded in grey are the highest level co-operatives. For more information on the underlying relationships between producer organizations in Burkina Faso see again Annex C.
Co-operative organisation Abbreviation Province
1. Union Fruitière et Maraîchière du Burkina
Faso UFMB Houet
a. Coopérative Faso Djigui Faso Djigui Kénédougou
2. Association WOUOL WOUOL Comoé
a. Société Coopérative Agricole de
Bérégadougou SOCABE Comoé
3. Féderation des Agriculteurs Fruitières FEDAF Kénédougou
a. Union Départementale de Producteurs
Fruitière de Koloko UDPFK Kénédougou
b. Union Agricole et Fruitière de
Kénédougou UAFK Kénédougou
4. Groupement YOUNPIE YOUNPIE Comoé
Table 3.2. Sample of producer organizations
Second, after introduction with the producer organizations, the organized member-producers were sampled based on their voluntariness. Individual producers were identified and sampled either via consultants of SNV, via other producers or via the other two students12 conducting their mango market
research for SNV Burkina Faso in the same period. The sample of mango producers contains 15 organized mango producers and six individual mango producers. Table D1 and D2 in Annex D give respectively an overview of the sampled organized and individual mango producers. In addition, table D1 shows all the contacts that have gone via each producer organization.
3.3.4 Questionnaire
In this research two questionnaires were developed; one for interviews with the producer organizations, one for the interviews with producers. The questionnaires for producer organizations and producers are shown in Annex E, respectively in E1 and E2. Some differences exist in the questionnaire for organized and individual producers since some questions relate specifically to the status of the mango producer –
whether he operates individually or via a producer organization. Interviews with respondents were held in French. With eight producers the interviews were held in collaboration with a local translator, who translated the French to Dioula13 and vice versa. The questionnaire for producers is structured with the
help of the conceptual model and consists of six parts. In addition to the questionnaire some group discussions with producers were held, for which a topic list has been used to gain additional knowledge. Moreover, besides interviews with producers two discussions have been held with experts14 in the field of
producer organizations. 3.4 Data analysis
The collected data are both qualitative and quantitative in nature. The lack of statistics in Burkina Faso in general and the difficulties to collect quantitative data at producer level made the data not useful for statistical analysis. Quantitative data will be analyzed and complemented with the qualitative data gathered during interviews and group discussions. The qualitative and quantitative data are complementary in the analysis.
3.5 Limitations
The first main limitation of this research relate to the difficulties the researcher experienced in aligning problem statement and conceptual model to the practical context in Burkina Faso. This limitation is linked to the limited time-frame in which the research took place to be discussed hereafter. Since the alignment of theory, conceptual model and collected data was not optimal, the analysis took quite a long time. The second main limitation relates to the language barrier and the cultural gap that exist between the interviewer and the interviewees. French is the native language of neither the interviewer nor the interviewees. Nevertheless, most interviews were held in French, in some cases with the help of a local translator who translated the French questions to Dioula and vice versa. Moreover, it took time to get adapted to the culture of Burkina Faso. People tended to give more indirect, incomplete or socially correct answers than in the Netherlands, so that the questions had to be reformulated often to assure the validity of the data.
The last important limitation is the limited time-frame within the research is conducted. Although a lot of desk-research took already place in the Netherlands, the first two months in Burkina Faso were spent on desk-research as well. Since the researcher had no former knowledge in African countries, it was hard to imagine in advance what to expect and how to set up a research in an African context. Nevertheless, within a time frame of two-and-half- months a considerable number of producers and producer organizations have been sampled that well represent the mango producers in Burkina Faso.
13 Dioula is the first language in the South West region of Burkina Faso.
The Role and Commercial Behavior of Mango Producer Organizations in Burkina Faso 4 Burkinabé mango – Positioning, production and trade
4
Burkinabé mango – Positioning, production and trade
4.1 Positioning of the Burkinabé mango
During recent decades the world mango production grew steadily with a total world production of 24,300,000 tons over the period 2002-2004 compared to 19,500,000 tons over the period 1992-1994. The Far-East dominated mango production followed by Latin America and the Caribbean, and Africa. Mango world exports and mango world imports increased steadily as well (FAO, 2004). Mango production of Burkina Faso does not show up in the statistics, although the exports do. Mango exports of Burkina Faso were quite constant in the years 1996-2000 with annual volumes around 900 tons. In 2001 mango exports started to increase to a volume of 8,000 tons in 2004. The fact that world exports of mangoes were 840,000 tons in the year 2004, makes the contribution of Burkina Faso to the world exports less than one percent (FAO, 2005). For a overview of the mango world production, exports and import see the details in Annex F, G and H. In addition, Ravenshorst (2006) discusses more in depth the mango exports of Burkina Faso.
During the decade 1970-1980, every country in French speaking West Africa had at least a collection of mango trees. The extension of mango production zones within West Africa includes besides Burkina Faso the following countries: Mali, Senegal, Guinea, Ivory Coast, Ghana, Gambia and Togo (Rey et. al, 2004 and Eurostat, 2005). Within West Africa, Burkina Faso was the second country that started exporting after Mali, which was part of a development program initiative called développement fruitier. Within West Africa, Burkina Faso faces strong competition from Mali and Ivory Coast on the European export market, two countries which have more or less the same production season as Burkina Faso has. However, mango production in Ivory Coast takes mainly place on large plantations, for which investment costs - e.g. in certification or irrigation techniques – per hectare are lower and the quality of mangoes is more easily assured (Ravenshorst, 2006). In addition, mango production in plantations was recently started in Ghana, which could be a competitor in the future as well (de Jong, 2006). In addition Ivory Coast and Ghana have more favorable export conditions due to their location on the coast.
Three kinds of certification standards are relevant for producers and producer organizations in Burkina Faso: the fair-trade conditions, the biological conditions and the Eurepgap conditions. These certification standards are mainly targeted towards serving the demands on the European export market, although not all export mangoes have to be certified (Ravenshorst, 2006). When mango production is not confirm one of the certification conditions, mango production is said to be ‘conventional’ instead of ‘certified’. Details on the relevant certification standards can be found in Annex I.
4.2 The Burkinabé mango
4.2.1 Production
Most mango orchards in Burkina Faso are situated in the South West region of Burkina Faso, mainly in the provinces Comoé (Banfora) and Kénédougou (Orodara). This region contains around 80 percent of the total mango production of Burkina Faso. Other production zones are situated in the centre. Exact data about the number of hectares devoted to mango production are lacking, but estimates range from 12,000 (INERA, 2002) to 13,000 hectares (SICAREX, 2001), with an annual production up to 160,000 tons (SICAREX, 2001).
The structure of the mango orchards in Burkina Faso depends on the historic evolution and the destination of the mangoes, whether the mangoes are auto-consumed within the family or village, or traded on the markets. This distinction results in a classification in village orchards and maintained orchards respectively, the latter much better maintained than the former (Ravenshorst, 2006). In addition, the average age of trees in maintenance orchards is lower and trees consequently are more productive.15
However, mango producers currently producing for the market and well maintaining their orchards are faced with a large diversification in their orchards which inhibits the trade of their mangoes. Diversified orchards mean that in the orchards mangoes are mixed with oranges, lemons or even cotton and maize, which makes these mango orchards less well suited to obtain certification and to trade mangoes on the export market (Faso Djigui, 2006).
The main varieties in Burkina Faso are Amélie, Brooks, Kent, Keith and Lippences. The varieties Kent and Keith are the so-called colored varieties and appreciated by and best-suited for the export. A less common export variety is Valencia. Amélie and Brooks are well-adapted for the processing industry. For quite a long time Amélie was the most appreciated variety within Burkina Faso, however increasing demand in Europe for Kent and Keith induces many producers to change their varieties. Hence, many producers start planting new trees or are using a technique called ‘grafting’16 to change the existing
varieties. Moreover, grafting is a technique to rejuvenate the trees by taking the productivity of the older
15 Mango trees start producing from the 5th year and onwards, reach maximum productivity after the 8th year, and after 35 years of production, the productivity level starts to decline (UFMB, 2005).
The Role and Commercial Behavior of Mango Producer Organizations in Burkina Faso 4 Burkinabé mango – Positioning, production and trade
trees up to a higher level. Own estimations expect large increases in the colored varieties – Kent and Keith – in the coming years, since many producers have planted or grafted varieties Kent and Keith which are not yet productive17. Below the current distribution and the future distribution are shown, percentages are
based on the sample. Annex J shows the distribution of the main varieties in 2002 provided by the INERA18 for which more producers have been sampled.
(a) (b)
Figure 4.1. Distribution of mango varieties in the South West region of Burkina Faso, (a) current situation; (b) estimation for the future; Own elaboration, based on sample, 2006.
4.2.2 Trade
The mango production season depends on the variety and on the region in which the mangoes grow. Table 4.1. below shows the production season per variety.
Variety Harvest season
Amélie (Greffe) End of February, March, April, May
Brooks (Retard) June, July
Kent End of April, May;
Keitt June
Lippences End of March, April, May, begin June
Table 4.1. Mango production seasons in the South West region of Burkina Faso; Source: Own elaboration, based on sampled producers, Burkina Faso, 2006.
Hence, the supply of mangoes in Burkina Faso is concentrated in the months March, April, May, June and July. Slight differences in production seasons are caused by the region. Maturity of the mangoes is mostly reached first in the province Comoé (Banfora, Bérégadougou and Toussiana), followed by respectively Houet (Bobo-Dioulasso) and Kénédougou (Orodara and Koloko). The mango production seasons are known as ‘the mango campaign’ and this is the period in which the mangoes should be traded.
17 The figures shown an expected increase in export varieties from 32% to 42% in the coming years. 18 Provided by Mr. Guira Moussa, INERA, Burkina Faso, 2006
