2SCALE Thematic Papers Not By Technology and Money Alone | Page 22

plained that Psaltry set prices of cassava tubers on their
own, and this set price was not favourable to the farmers.
This occurred because the farmers were not organised into
groups, had poor access to information and low productiv-
ity.
Nigerian Breweries is the largest brewing company in
Nigeria that markets well-known brands of beers, malt drinks,
and soft drinks. The company is interested in strength-
ening and expanding its local business activities particu-
larly in the local procurement of cassava-based products.
Psaltry is a medium-sized agribusiness company that works
to supply high-quality cassava starch to food and bever-
age companies. The company also produces cassava on
its own farmland but this is far below the company’s yearly
100,000 metric tonnes needed.
Price negotiation, a continuous challenge
To compensate for the gap, the company runs a compre-
hensive outgrower scheme with smallholder cassava farm-
ers. It also provides incentives such as agro-inputs on
credit (stems, agrochemicals), through linkages with banks
and clear contractual arrangements with farmers (at an-
nually set prices). Despite the incentives, price negotiation
has been a challenge in the continued relationship between
the company and the farmers. Yemisi, Psaltry’s director ex-
plained that she had a yearly contract with buyers and could
therefore only negotiate prices once a year.
The challenge therefore became how to bring both parties
towards a win-win sustainable business. This question be-
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came more important as new buyers came into the picture,
making competition for cassava tubers tougher than in past
years. To help the farmers address these issues, 2SCALE’s
trainer-mentor and agribusiness coaches facilitated work-
shops on farmers’ group formation and registration, farm
operation planning, use of improved farm inputs, access to
finance strategies and negotiation skills. After these and
other capacity-strengthening exercises, the farmers gained
better access to information and market trends, became
better organised and now meet regularly. And finally, their
cassava yields rose from 9 metric tonnes per hectare in
2014 to 14 metric tonnes per hectare in 2016.
As our phone call ended, it took me some time to under-
stand the new reality. In 2015, shortly after the partnership
started, Nasiru Oladokun, requested that I lead their group
to negotiate prices with Psaltry. Now in 2017, they no longer
needed me as their lead negotiator. Our months of hard
work were yielding results before my very eyes. That eve-
ning, as I opened a bottle of Goldberg beer, I was happy
at the progress made so far. The farmers’ association is
getting to understand the business dynamics within the cas-
sava value chain. For them, the journey to a fair deal is
beginning, and they can ensure that Psaltry never runs out
of good quality starch.
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6 An apex farmers’ organisation represents all the local level famers‘
organisations linked to this partnership.