University of Connecticut
The socioeconomic importance of peanut production in Senegal is illustrated by the fact that this crop is the main source of rural employment, accounts for nearly half of the cultivated land, and is the most important source of foreign exchange. However, post-independence efforts by the government to raise agricultural productivity have not improved the performance of this sector, as evidenced by low production and farm income, increasing environmental degradation, and a declining share in the world trade of groundnut oil. This situation has not only affected Senegal but also all other peanut producing countries of West Africa (Badiane and Kinteh, 1994). Distortionary economic policies have been a major contributor to this poor performance.
In the case of Senegal, the government sets grower prices often below the free market price and imposes hefty export taxes on peanut oil. In addition, to further cement recent structural adjustment measures, the government has eliminated input subsidies to peanut producers and is considering privatizing the oil producing plants. The impact of this privatization on peanut producers remains unclear. On the other hand, the ongoing environmental degradation from over exploitation of land devoted to peanuts in the North has translated into declining yields and has prompted migration of farmers to the South. Despite these problems, an important policy objective of the government is to achieve 80% food self-sufficiency by the year 2000.
It seems clear that prevailing fiscal practices and price controls along with the organizational structure of peanut processing require significant transformation if West African countries are to regain some of the ground they have lost in world markets (Jammeh, 1988). An additional challenge to be faced is to improve the farm level efficiency of the peanut production system without further compromising environmental quality. Two key variables that require particular attention are the use of higher quality seeds and of adequate levels of fertilizer (Badiane and Kinteh, 1994). A major reason for inadequate use of these inputs is financial constraints at the national level. In addition, the lack of appropriate farm management research and inadequate mechanisms to disseminate research results on a timely and cost effective basis are also of major importance.