Côte d’Ivoire: a further step in the operationalisation of the Agricultural Commodities Exchange

After the launch in early February of a three-month programme to train those involved in its implementation, and the meeting at the end of May between teams from the regional stock exchange, the authorities of the Poro region (north of the country) and the regional representation of the Ministry of Agriculture and Rural Development (MINADER), A new step was taken on Wednesday, with the signing of a memorandum of understanding between BRVM - which takes on the role of technical partner, and the Storage Receipt System Regulatory Authority (ARRE), in charge of the regulation and operation of the activity.

In addition to creating an institutional framework between the two structures, this agreement will formalize the implementation of warehouse receipts, which are essential to the smooth running of the BMPA. A secure document issued by the farmer each time he delivers his production to one of the BMPA-approved stores, the warehouse receipt, by reassuring him of the stocks actually available, facilitates transactions. According to Edoh Kossi Amenounve, Director General of BRVM, « [the BMPA] will achieve its objectives when a producer is able to choose his production rate according to the spot and forward prices determined by supply and demand ». For his part, Justin Koffi, DG of the ARRE, believes that « Côte d’Ivoire, which has more than 23 agricultural products eligible for storage receipts, cannot achieve a structural transformation of its economy without creating an agricultural commodities exchange based on a storage system supported by storage receipts that are efficient, reliable and comply with international norms and standards (the ARRE’s has been audited by the IFC and therefore meets all these standards, editor’s note) ».

Another issue linked to the launch of the BMPA is the provision of storage solutions that enable agricultural products to be preserved in optimal conditions, with only 266 warehouses currently meeting these criteria out of the approximately 1,000 warehouses listed across the territory. According to Justin Koffi, in view of the evolution of national production (cashew nuts in particular, one of the 3 values on which the BMPA will initially focus, along with cola nuts and maize), it will take about 37 billion CFA francs to bring all this infrastructure up to the required standards and ensure that the country has sufficient capacity to ensure the proper functioning of the BMPA. This is a major challenge given that post-harvest losses in Africa are estimated to account for more than 37% of agricultural production - 40% in Côte d’Ivoire according to the Ministry of Agriculture and Sustainable Development - due to a lack of capacity to store production and, above all, to sell it on the market. Not to mention that by structuring the activity of farmers and offering them greater visibility and more stable incomes, these tools could be an effective response to the problem of financing production and sustainably clean up the Ivorian agricultural ecosystem.

Read also: Côte d’Ivoire’s agricultural commodity exchange: moving forward!