Country Report Senegal April 2011

Economic performance: The groundnut sector experiences payment delays

After a delayed start to the official groundnut marketing season that prompted protests by farmers' organisations, the dominant groundnut oil company, Suneor, has incurred opprobrium for delays in paying operators, subsequently delaying payment for thousands of farmers. The government even threatened to seize the company's groundnut stocks if arrears were not paid before the official end of the marketing campaign in April. Suneor's director, Tiendanté Bouyo Ndao, responded that the company had already paid CFAfr24bn of a total of CFAfr34bn owed to farmers for the purchase of around 180,000 tonnes of groundnuts. The way the marketing system works, however, means that Suneor does not pay farmers directly, instead paying private traders who liaise with producers. The agriculture minister confirmed that a substantial proportion of farmers' payments had been paid by late March, with the balance to be cleared by end-April. This does not, however, guarantee that farmers will be paid in full, a not-uncommon situation since the dismantling of Sonagraines, a parastatal groundnut-marketing board, in 2001. In recent years criticism of the system and discontent over Suneor's relationship with its providers and with local markets for vegetable oil have worsened. An investigation in March by a local newspaper, La Gazette, shed light on the opacity of Suneor's privatisation, the undervaluation of its previous iteration, Sonacos, and the close links between Suneor's chief executive officer, Abbas Jaber, and the president. The feature concluded that not only did Suneor enjoy preferential treatment from the government but also the current system favoured the use of more expensive and less healthy imported vegetable oils despite the abundance of cheaper and healthier locally produced groundnut oil.

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