Another example of failed and ill-conceived APRC policy. The only thing
consistent about this regime is its consistence in rendering failed
policy outcomes.

Do not be fooled by their high sounding proclamations, intentions,
fudged data and apologists.  They have failed to deliver and it is the
average Gambian who pays for this bungling.

Abdoulaye

Momodou Camara wrote:
>
> The following is from Burning Issues (FOROYAA Publication) Monday, 12 February
> 2001
>
> ****************************
>
> 70.5 Million Owed to Government By Purchaser of Groundnuts
>
> The Sale of GPMB in 1993 for D20 million to Alimenta which established the
> GGC in the Gambia to purchase groundnuts made the groundnut trade a private
> sector affair. The prices of groundnuts were to be determined by GGC. When
> the AFPRC government took over in 1994, it proceeded to give the impression
> that it can reverse what the PPP had done. It imposed certain conditions on
> the GGC which did not materialise. Finally, in order to give the impression
> that government was controlling prices of groundnuts, it started to announce
> the price of groundnuts before any agreement was effected with GGC.
>
> It is reported that when the GGC refused to meet the conditions imposed by
> Government, agreements were made for government to subsidise the price of
> nuts. The failure to meet the subsidies led to a friction. Government seized
> the assets of the GGC. GGC resorted to arbitration. A vacuum was left for
> the purchase of groundnuts during the 1999/2000 trade season. The result was
> catastrophic on two sides. The companies which under took the responsibility
> to purchase groundnuts received government guarantees. Furthermore, the
> government had to either appear before an institution for arbitration or
> settle its dispute with GGC outside.
>
> Apparently, the companies which took the responsibility to purchase
> groundnuts were not able to stand on their own with out the backing of the
> government. This led to many claims that the companies had left the
> government with financial liabilities amounting to millions of dalasis. This
> is why Sidia Jatta raised the issue with the SoS for Agriculture. Asked
> which companies were involved in the purchase of groundnuts during the
> 1999/2000 trade season. The SoS mentioned Farato Farms, New Dimensions
> Limited and UTP/Tulior. Asked whether they owe government any money, the SoS
> indicated that as at the end of December 2000, the total amount owed to
> government by all three operator was 70.5 Million Dalasis.
>
> Asked whether a mechanism is in place to recover the money, the SoS indicted
> that they have entered an agreement with the European Union for certain
> parts of the debt to be mitigated. According to him, the EU takes part in
> dealing with certain parts of the debt and the operators will have to settle
> the following liabilities, that is New Dimensions D1.28 Million, Farato
> Farms D2.12 million and UTP/Tulor D8.34 million.
>
> According to the SoS, the government has through the Department of State for
> Justice put in place a mechanism to recover any outstanding amount.
> Suffice it to say,, in his budget speech, the SoS for Finance and Economic
> Affairs had indicated to the National Assembly that the government has
> agreed to pay Alimenta/GGC a sum of $11.4 million dollars  more than D170
> million   dalasis as compensation.
>
> This confirms that the 1999/2000 trade season was a national disaster. The
> farmers were subjected to credit buying. Many kept their crops only to have
> them destroyed by pests. Many sold their nuts by cups to extortionists who
> bought them at cut throats prices.
>
> Government spoke about a private sector led trade but the three companies
> had to depend on government to purchase the nuts. A large quantity had been
> purchased but could not be exported. This has given rise to a liability of
> D70.5 million. With  $11.4 dollars million for the Alimenta fiasco it must
> be admitted that government's handling of the groundnut subsector has been a
> classic case of mismanagement.
>
> Where do we go from here?
> According to the SoS, the companies which are involved in the purchasing of
> nuts during the 2000/2001 trade season are  Hilo Trading Inc. and Premier
> Agro oils. Up to 18 January 2001 Hilo trading Inc. has purchased 27, 000
> metric tonnes while premier Agro oils is reported to have purchased 1, 500
> metric tonnes; that a sum of 54.4 million dalasis had been spent to purchase
> 28, 500 metric tonnes of groundnuts.
> According to the SoS, the total quantity of groundnut produced this year is
> more than that of the previous trading season. This means that over 127, 000
> tonnes of groundnuts had been produced. The trade season started on the 1st
> December 2000. If the operators can buy only 28, 500 tones as of 18th
> January, it stands to reason that about  100, 000 tonnes are yet to be
> purchased. There is indication that Senegal started to purchase groundnuts
> much later and the Gambians who  initially took their nuts had to come back
> with it. Apparently, purchasing has started and groundnuts are being taken
> across the border for sale.
>
> Even though the SoS claims that credit buying is not taking place because
> monies are received in less than a month after crops are weighed, there is
> indication of sitting for over a month before monies are received. It has
> been made abundantly clear by the SoS that ''the rest of the crop will be
> purchased through financing including inflows from exports by the operators.
> ''
>
> Foroyaa will continue with its investigation. What appears to be the nature
> of the trading season is the provision of funds by the Banks to operators to
> purchase nuts at interval and the waiting by two banks for financial inflows
> of what has been advanced before the disbursement of more funds. This must
> undoubtedly lead to credit buying.
>
> The assumption by the President of the Chairpersonship of the Task Force for
> the revitalisation of the groundnut subsector has not led to the growth of
> income of the farmer and the eradication of credit buying. What is clear is
> that government is simply playing the game of chance. It has no control over
> the marketing of groundnuts. This is why it did not announce the price for
> groundnuts this year. It only has the privilege of being in touch with the
> operators. It can have information in advance and exploit it politically if
> the information it receives can bring joy to the people.
>
> We need more than chance to revitalise the groundnut subsector. FOROYAA will
> look into the shortcoming of the federation and identify the advocacy and
> marketing role it can play to revitalise the groundnut subsector.
>
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