A headache for actors of the Ru world

To support actors in the rural world and face the challenges of food security, as part of the national economic development strategy, the new authorities have planned an overall budget of 1,070 billion Fcfa for the benefit of the primary sector (agricultural production, breeding, fishing). In accordance with the new challenges of the current government, in line with the different axes of the Horizon 2050 repository, this budget will strongly support the different links in agricultural value chains. Emphasis will be particularly placed on agricultural mechanization, the development of agro-industry to reduce post-harvest losses and the modernization of irrigation infrastructure in order to boost agricultural productivity. Through this approach, the State of Senegal confirms its manifest desire to achieve food self -sufficiency thanks to intensified agriculture, control of water and the popularization of good agricultural practices.

Nowadays, funding is a real headache for actors in agricultural and agrifood value chains. The agricultural sector, mainly composed of family -type operations, occupies only 3 to 5% of the overall credit outstanding recorded in the financing of the economy in general. Insufficient availability or the absence of financial resources, combined with the failures of our credit policies in the agriculture sector, negatively impacts on the performance of the sector and by ricochet on our economy.

To this is added the weakness of agricultural productivity due to climatic threats, the instability of rainfall, the lack of structuring of agricultural and agrifood value chains in certain agroecological areas, the absence of integrated funding models, the lack of warranty, the absence of a mitigation strategy of risks inherent in agriculture, etc. Despite the existence of certain guarantee instruments such as the Fonsis and the Fongip and other mechanisms implemented by the State and the private sector in the form of guarantee funds, the deficit of bank loans in the sector remains a concern For actors.

At the same time, the COVVI-19 and its corollars have impacted negatively on the quality of the portfolio of financial institutions which are targeting the rural world. To date, several small producers (family farming) at the base record a slate of arrears in certain financial institutions of the place and cause a break in relationships and/or a trigger of the recovery process for litigation in accordance with the principles which regulate the banking activity.

With all these observations, to relaunch the agriculture sector, the State must imperatively find with the stakeholders of the means to strengthen the mechanisms of financing parapublic banks and find a solution to the unpaids counted by the producers thanks to the Impact of COVID-19 and the fall in agricultural productivity due to climatic threats. Added to this is also its obligation, after implementing input distribution programs, to pay the amounts due to private operators stockering without delay to prepare the next wintering campaign. The speed in the treatment of invoices due for the benefit of hundreds of private store operators will make it possible to finance other sectors of the economy such as trade and transport.

In this respect and in a view to improving the efficiency of agricultural and agrifood sectors, it becomes necessary and urgent to review the system of agriculture financing policy in our country. The said system must be correlated with the agricultural and agrifood production objectives while integrating the contribution of the private sector.

If we refer to the strategic axes of the benchmark and the National Economic Development Strategy (SNDE), it is clear that the authorities were again committed to the development of agriculture and agro-industry a priority . The purpose of this objective is to achieve food self -sufficiency and put an end to the country’s dependence on imports, including rice and certain horticultural products for a certain period of the year. At the same time, certain industries such as Sonacos, agroindustries in rice and peanut value chains in particular, sodefitex, etc. No longer manage to reach their collection needs and recovery of the level of their technical platform. All these weaknesses explain the lack of performance in the agricultural sector and by ricochet of the difficulties in ensuring a return on investment by agricultural entrepreneurs and financing institutions.

To achieve food sovereignty and contribute to solving the issue of employment of young people through the primary sector, the State of Senegal, failing to carry out reforms which will bring them together in a single strong and efficient instrument, must imperatively promote The development of agricultural potential by supporting financial institutions such as agricultural banking (LBA), National Bank for Agricultural Development (BNDE), DER-FJ and other financing instruments. In addition, the involvement of the local private sector in the financing of agriculture, through private public partnerships (PPP), will have to be facilitated by the new authorities. The development of private public partnerships, thanks to the facilitation of the State, will ultimately allow the implementation of innovative and reassuring financing mechanisms, through the implementation of guarantee funds, credit lines to Concessional rate and long maturity for the acquisition of agricultural infrastructure and equipment. In other words, the implementation of a favorable financing ecosystem, through a value chain approach, will be an excellent opportunity to minimize risks and encourage financing institutions to inject their resources and ensure return on investment. It will be a question of encouraging and developing mechanisms such as third detention, the system of warehouse receipt, factoring etc. Suchies exist, but unfortunately the said mechanisms are not lasting in certain agroecological areas because of certain bottlenecks such as the weakness relating to the organization of ridges at the base, the rarity of certain products for a certain period of the year , lack of storage infrastructure etc.

This support should lead to the implementation of specific offers for investment credits to support the development of more efficient agriculture on the agronomic, economic, ecological, commercial and more resilient levels in the face of vagaries, especially climatic. In addition, to minimize the intrinsic risks to agricultural activity and face any claims (floods, pests, granivore birds, waves of heat and others), the National Agricultural Insurance Company (CNAAS) must be accompanied in the Development of tailor -made insurance products in order to make our agriculture resilient and encourage financing institutions to inject their resources into the sector.

If we make a diagnosis of agriculture financing, we will understand that short -term credits, for the benefit of value chain players, have shown their limits and not efficient in the face of the many hazards in which the sector faces. In other words, all organizations of producers and agricultural entrepreneurs who miss an agricultural campaign unless there is to walk with financial institutions; Admittedly, mechanisms exist, but not efficient, without impacts and unwavering.

On the date, what is the debt level of producers and other players in the agricultural sector?What is their unpaid level in the portfolios of local financial institutions? What strategy for a resumption of relationship between certain agri-entrepreneurs and the financial institutions of the place? What innovative mechanism to reach all the actors in value chains? What mechanisms to boost the stable resources of the financial institutions of the place? Upstream of funding, to ensure a return on investment, what strategy to make agricultural production profitable? What strategies to allow to support financing institutions to access the Green Climate Funds ? These are so many questions that deserve an answer if we plan to facilitate access to credit by producers and develop agricultural value chains.

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