Improving sales strategies for the cashew market

N’Kalo, which means ‘I am infor med’ in Dioula, a West African trade language, is a service that provides information and advice about the market for cashew nuts and sesame seeds in West Africa. The N’Kalo project is promoted by RONGEAD, a French NGO, and Offre & Demande Agricole, an independent organisation that provides support to agri-businesses. Unlike most market information services, which merely extract and disseminate the prices charged on a number of reference markets, N’Kalo has quickly evolved into a ‘method’ based on a ‘training–information–advice’ model.

In 2011, 9,600 cashew producers in Côte d’Ivoire were trained directly by eight advisors–trainers (ATs). These ATs also carried out advanced training for 280 lead farmers, who also passed on information, and 150 traders. The information reached approximately 20,000 people.

Thirteen thousand producers subscribed to the SMS broadcasting service, which was initially free of charge. After three years in operation, the service began to charge a subscription of XOF500 a year or about US$1. In 2013, it had only 1,267 paid subscribers, but by April 2014, it reached 7,000 paid subscribers, which means a subscription renewal ratio of 54%.

Operation N’Kalo

N’Kalo has continued evolving to reflect the situation on the ground. The training has been improved by diversifying the content and making it more suitable, and by revising the teaching methods. More training options have been introduced to equip more of the population with a firmer foundation for using the information received via SMS.

The ATs are also market analysts with the resources to reach isolated and inaccessible areas. There are only eight consultant trainers, too few to cover all the producing areas, so they visit the villages on a rota basis. During their visits, they explain the SMS messages again to ensure that they have been properly understood. When trainers cannot be on location, they rely on intermediaries to pass on the information.

The cost of training is borne by the cooperatives and producer organisations, the wholesalers and the exporters (specifically in relation to quality assessment) and the processing agents. The service is now supplying content in order to improve its economic model and provide a quality guarantee as well as information. The international mobile network operator Orange has deployed a new value-added service based on N’Kalo, which allows farmers to subscribe to weekly text messages by sending a keyword to the short number 7818 in Ivory Coast. N’Kalo is also building services for other crops, such as shea, onion and maize.

N’Kalo’s impact

Anyone who needs the information can obtain it. Widespread dissemination of information narrows the gap between the farmer and the customer, which improves the level of trust between them and makes for equitable transactions. Sanogo Abdoulaye, a wholesaler in the Bandama Valley, points out that producers avoid keeping their products back pending a price rise while relying on the market tracker. This makes for better transactions for all parties.

The training sessions on quality and sales, combined with the weekly information bulletins and the continuous follow-up by the ATs, aim to help farmers to adopt a less ‘homespun’ sales method, thus protecting their incomes. This goal is usually achieved, as they adjust their sales strategy to local market conditions. But this is not always the case, as many farmers are still tied by debts to customers before the market opens, and so are obliged to sell under conditions that have been set beforehand.

Where they belong to a cooperative which has advance funding, farmer’s sales may be made on the basis of contracts signed in advance. Some farmers therefore have relatively little room for manoeuvre and little independence vis-à-vis the buyers. Finally, a current loyalty pact between a farmer and a buyer will have some impact on the effectiveness of the service.

Information on current prices sometimes could be more specific. Even where the prices are differentiated according to region, they are issued within a variable value range of XOF25 to XOF75 for the same region. This situation allows for an additional and sometimes excessive margin for the trackers, and therefore less income for the producers.

The overall development of sales strategies has been noteworthy for most of the beneficiaries, however, and in the regions where the 2010 and 2011 seasons are the most comparable (namely Denguélé and Worodougou) the additional profits were largely attributable to the service.