This network works!
Oikocredit, a Dutch social investor, has signed a new credit agreement with Promo Fruits, the largest juice processor in Benin. Promo Fruits will receive a loan of 700 million FCFA, of which 200 million is designated for small-scale producers, to accelerate adoption of plastic mulching. 2SCALE helped bring the partners together and broker key elements of the deal.
We spoke to two national policy makers who co-chaired the signing ceremony: Delphin Koudande, Minister of Agriculture and Fisheries, and Lazare Sehoueto, Minister of Industry, Trade, and Arts.
From right to left: Dieudonné Alladjodjo, Promo Fruits managing director; Delphin Koudande, Minister of Agriculture and Fisheries; and Lazare Sehoueto, Minister of Industry, Trade, and Arts
Mr. Koudande, as Minister of Agriculture, what are your thoughts on this partnership model?
We have a processing factory that needs raw material; so it had to organize producers to ensure the supply of quality products. With this agreement, designating FCFA 200 million, there is a credit system that accompanies this relationship between the farmers and the company. The credit system will allow producers access to plastic mulch technology. This technology is not new, but it is new to our area. It conserves soil moisture, inhibits weed growth, increases productivity and farm incomes, and can be applied to other crops as well. We need to make this technology available for more producers.
What supportive action will the government take?
One way is by reducing customs duties on imported goods, to make technology more accessible, if it is adopted by producers and proven to be effective. For example, after harvest, farmers can grind and plow pineapple plants into the soil to improve soil fertility. This will require imported machines, and I don’t think we can deliver the machines to producers at their current costs. We have a mechanization program and, certainly, there will be cost cuts or subsidies on this equipment to lighten the load for producers.
Is this a commitment from the ministry?
It is written.
Has the state itself developed mechanisms to facilitate credit for agribusiness actors?
The National Fund for Agricultural Development was created in order to help producers. It was put in place before the current government, but it is not functional. We are working to correct mistakes that were made during its implementation. Everyone should help – producers, technical and financial partners, and the Beninese government. Everyone should get involved to make it functional.
Mr. Sehoueto, from your perspective as Minister of Industry, what would you say are the strong points of this approach, beyond just the technology package?
This pineapple partnership is very important. This is an example of how various actors can join together to enhance quantity and quality to feed the factory and market standards. If we have a leveraging company like Promo Fruits which relies on a network of well-identified producers, then the banks will loan money, and at the best rates, because the risks are reduced. Today, we speak of traceability, quality, and competitiveness, and these are possible only if producers are integrated in platforms such as the one organized around Promo Fruits. All value chains in our countries could learn from this type of network because it works.
The difference between what we see here and other types of networks is the method. There is money in the country. What we do not have is organization or method. Here we have a lever, which is Promo Fruits. You started an organization. It should be strengthened, and with the technical and financial partners, there is a method to advance gradually. If we strengthen the approaches we develop today, and if the company puts rigor in its management, I think we can win the bet to go to processing 47,000 tons per day.