Determinants of Cashew Growers’ Participation in a Joint Contract Farming-and-processing Investment Project in Benin

Aims: This research aimed to identify the determinants of Village Cashew Growers Cooperatives (CVPA)’s participation in a joint cashew contract farming-and-processing investment project.

Study Design: The processing system includes village-level pre-processing satellite units which would supply unhusked kernels to a central unit in charge of the next stages of processing and marketing of white and roasted kernels. The study design includes (i) a profit sensitivity analysis based on cashew price simulation, and (ii) an elicitation of farmers’ opinions about the joint investment venture.

Place and Duration of Study: From September to December 2015, a survey was conducted in Glazoue and Dassa-Zoumè districts, the main cashew growing areas of Benin, where annual rainfall ranges from 960 – 1260 mm.

Methodology: Processing technology documentation and field observations were done for the profit sensitivity analysis, and questionnaire-based interviews and focus group discussions were conducted with 43 CVPA to assess growers’ willingness to participate in the project. Data on CVPA characteristics and their functioning were collected and a logistic regression model was run to identify the determinants of the joint venture investment.

Results: The study found that the price range of unhusked kernels for a profitable processing system was 1640-2493 FCFA/kg. The main determinants of CVPA participation in the investment included expected cashew producer price at 5% significance level, and sex of cooperative's chairman, expected commission and cashew assembly service income (rebate), and size of cooperative at 10% level. Expected price, expected rebate, sex of chairman and registration fostered participation, whereas size of cooperative and exit likelihood hampered participation.

Conclusion: The joint processing investment project can be successfully implemented with farmers’ participation, if cashew nut producer prices are attractive, and cooperative’s gender-wise leadership and contract farming management are improved. Producer price monitoring and promoting professional farmers’ business groups and innovative trade partnerships, with enhanced negotiation and investment capacities, will be key to increase farmers’ income and ensure poverty reduction in the cashew sub-sector in Benin.