Transforming the Sesame Business in Mali
Farm gate prices of sesame in Mali have increased six-fold in the past seven years, fueled by export demand. Yet, production is not growing quickly enough, and Malian processors and exporters are unable to source sufficient quantities.
“Europe and especially China have millions of new middle class consumers, for whom sesame oil is no longer a luxury, but a daily norm,” explains Soumaila Coulibaly, CEO of PROSEMA, the biggest sesame exporter in Mali. But how to convert this into commercial success? The 2SCALE sesame partnerships in Mali have transformed the sector, unlocking profits for farmers and processors.
Until recently, PROSEMA was able to source barely 10% of its needs locally. Today it buys from smallholder farmers in 270 villages across the country. Ten new agribusiness clusters were connected to PROSEMA in 2015. 2SCALE continued a large-scale training program to improve yields and quality. PROSEMA purchased less than 2,000 tons in the 2014/15 season, but more than 12,000 tons in 2015/16, and plans to buy 20,000 tons next season. Several challenges remain, including networking, side-selling and crop insurance. These issues are being explicitly addressed in partnership with 2SCALE.
Networking: 2SCALE helped strengthen Béne YiriWali Bulon (BYB), a network connecting sesame farmers, PROSEMA and government agricultural agencies. The ministry of agriculture now plans to use the network as a foundation to build a broader industry platform to boost production and exports.
Side-selling: In 2015, PROSEMA distributed input loans of 30 million FCFA to BYB members. The loans were to be deducted from farmer payments. But once the crop was harvested, farmers were tempted to sell to traders offering spot cash, violating their contracts with PROSEMA. As much as 84% of the harvest was sold on the side. Rather than write off the relationship, 2SCALE worked with PROSEMSA to rebuild trust, through community meetings, posters and radio campaigns ahead of the August 2015 planting season. Farmers once again signed contracts, with the company reiterating its commitment to support the local economy. In 2015, PROSEMA doubled its farmer network from 12,000 to 24,000, of whom 44% are women.
Crop insurance: Sesame production areas are drought-prone, with high risk of crop failure. 2SCALE, PROSEMA and PlaNet Guarantee worked together to roll out an index-based crop insurance program similar to the ones used by 2SCALE maize clusters in Mali and Benin. In 2015, farmers paid 7 million FCFA (€10,680) as insurance premiums. This number is expected to double in 2016, with 10 new clusters coming on board.