Spatial price transmission and market integration in Senegal's groundnut market

Abstract

Senegalese agriculture is unusually specialized in just three products: groundnuts, rice, and millet. Groundnuts have remained Senegal's premier export crop, rice remains the principle importable food, and millet is the principal food crop (Masters 2007). Senegal has been considered one of the most highly controlled markets in West Africa (Masters 2007). Historically, the Senegalese government has maintained a monopoly both on the purchase of groundnuts and on processing them into oil. At the beginning of the season, the government would set one producer price for groundnuts throughout the country. Accepting this pan-territorial price, farmers were required to sell their groundnuts to official agencies. Since the cost of transporting the groundnuts from the collection points near the villages to the mill was borne by the government or its parastatal groundnut agency (la Société Nationale de Commercialisation des Oléagineux du Sénégal [SONACOS]), every farmer received the same price, regardless of how far the farm was from the groundnut mill (Gray 2002). ; Non-PR ; IFPRI1; GRP32 ; DSGD; WCAO