Through AGOA, Investing in America’s Trading Partners for Tomorrow

Shea nuts are a key export commodity under the African Growth and Opportunity Act (AGOA). USADF works with smallholder shea producers in Benin to help them connect to regional trade hubs, and get a higher market price for their products.

Shea nuts are a key export commodity under the African Growth and Opportunity Act (AGOA). USADF works with smallholder shea producers in Benin to help them connect to regional trade hubs, and get a higher market price for their products.

By Kim Ward, Managing Director of Programs

This week marks the start of the 17th annual African Growth and Opportunity Act (AGOA) Forum in Lomé, Togo. AGOA represents not only the cornerstone of U.S.- Africa trade relations, but a pathway out of poverty for many smallholder farmers across Africa. Key AGOA exports, such as cotton, shea and cocoa, are agricultural products that are usually grown by smallholder farmers. But for many farmers, accessing trade benefits through AGOA can be complicated.

Fortunately, the U.S. African Development Foundation (USADF) works directly at the grassroots level to help farmer organizations connect to AGOA-linked trade hubs in the region. USADF supports smallholder farmers to increase production, build infrastructure needed to improve quality, and meet international standards for export commodities such as shea and cashews.

In Benin, where USADF is the largest U.S. Government contributor to agricultural assistance, USADF grants to farmer organizations such as Benin Shea Association are directly benefitting smallholder shea producers. Shea butter is a common ingredient in cosmetics, food products and pharmaceuticals, and is derived from an oil-rich, almond-sized seed that grows in the forest in West Africa and is traditionally harvested by women. The Benin Shea Association is supporting 8,000 farmers, nearly all of whom are women, to improve the quality and quantity of shea nut production.

In 2014, AGOA exports totaled over $26 billion.  USADF encourages smallholder farmers to participate in AGOA trade and tap into niche markets, such as organic shea butter made from shea nuts (above). 

In 2014, AGOA exports totaled over $26 billion.  USADF encourages smallholder farmers to participate in AGOA trade and tap into niche markets, such as organic shea butter made from shea nuts (above). 

With a $228,000 investment, Benin Shea Association is providing training and building storage facilities. Having a central storage warehouse allows the organization to aggregate production, and enables the women to obtain higher prices, thus cutting out local middlemen, from regional buyers for their shea nuts. Last year, women from Benin Shea Association were able to double the average price for their shea nuts, and overall sales have increased from $10,000 to $26,000. More importantly, with storage facilities in place, the women have accessed over $200,000 in loans to continue growing and paying their members on time. With higher incomes and linking to AGOA markets, both Americans and farmers from Benin Shea Association are benefitting from this trade.

Cashews is another crop that is linking farmers in Benin to American consumers under the African Growth and Opportunity Act. While farming cashews can be a lucrative trade, farmers must aggregate their harvest collectively to sell to local buyers. Warehouses are important part of the cashew value chain, where cooperative unions can aggregate produce and maintain quality control. USADF is investing in the Regional Cashews Producers Union in Benin, an 8,200 member cooperative union, to provide storage facilities, training and improved agricultural practices. The union has increased its sales over 50 percent in the last year. With its storage infrastructure, the union can use the aggregated produce as collateral and obtain working capital to expand its purchases, increase revenues and put more money in the hands of cashew farmers. USADF is partnering with the Government of Benin to invest in community enterprises, and last year invested nearly $700,000 in cashew production.

Through initiatives such as AGOA, eligible nations can diversify their exports to the United States and create employment and inclusive economic growth. USADF is on the ground working directly with smallholder farmers, many of whom are women, to create local economic growth and prosperous U.S. trading partners for tomorrow.

 

Mr. Kim Ward is the Managing Director of Programs at the U.S. African Development Foundation, and has over 30 years of experience working in international development.