Shea Producers in Burkina Faso Develop New Business Plans

Traditionally, shea nut harvesting and processing in Burkina Faso are rural women’s work. An estimated 400,000 women individually collect the nuts of the wild-growing shea tree and transform them into shea oil and butter in a very labour-intensive and manual process.

A risk that jeopardizes the sector is the deteriorating security situation in Burkina Faso, affecting all corners of the country. Armed groups that penetrate into all layers of communities add to a situation of distrust among one and another. “More than ever, female farmers need to work together, hand in hand, side by side,” Karim Zone, STARS value chain advisor in Burkina Faso explains. 

Growing demand and supply
STARS, a program of ICCO Cooperation, in partnership with Mastercard Foundation supports producer organizations and unions such as the shea union UGF/CDN, with more than 6,000 female members in the sector. Thanks to the increased demand for shea butter by the European cosmetics industry, the union has been developing an impressive, climate-smart processing facility that annually transforms 1,500 tons of shea kernels into 500 tons of butter. Much of the work, which includes no less than 22 steps, is done by machines at the facility. Buyers include the French cosmetics company Occitane and Savannah Fruits. “And thanks to a Business to Business event organized by STARS this year, we will start cooperating with shea kernel buyer AAK too,” president of the union Nebie Eli Bationo explains. 

Training improves quality
One of the major issues the union faces is meeting the high-quality standards set by their buyers. This puts them in a weak position when they negotiate their prices. “In 2017, STARS started a series of “Training of Trainer” sessions on a wide variety of topics, including quality control and butter hygiene. Thanks to these trainings, we have been able to train all our members gradually, which has significantly increased the quality of our products. This has positioned us well with international buyers and allows us to take a slightly firmer position at the negotiation table,” Bahiome Bationo, the coordinator of UGF_CDN adds.

Mr. Bationo: “An additional advantage of the trainings is that we no longer wait for an international organization to come to us and provide us with free training. We are autonomous, we can do the trainings in-house.”

Negotiating skills
Karim Zone: “Negotiating prices remains one of the biggest challenges that STARS is trying to address. Ideally, unions meet every year and they fix a minimum price for their produce. When a buyer comes, and offers a lower price, they can form a front and force buyers to increase. This is not what is happening currently. Producer organizations often lack strong leadership and management. Their members lack loyalty to the cooperative; and the unions don’t cooperate with each other. When a buyer enters a village, it happens that shea kernels collectors decide to sell to them directly, because he offers a higher price for their products. This might benefit them this year, but in the long run it is detrimental for all female collectors.”

 USCPPK_Houet is another union, based in the city of Bobo Dioulassou, near the border with Mali. They joined STARS in 2018. The union, grouping more than 4,000 members, recognizes the difficulties described by Karim Zone. “If we don’t act upon it, the international companies will start working with middlemen, or buy directly from the women.”

Financial products
To make sure that female shea collectors are able to collect as many nuts as possible, they need a loan to bridge the time between the collection and the actual pay-out from the buyer. This is why STARS developed a financial product involving the cooperatives, microfinance institutions (MFIs) and buyers. “In the past, female collectors did not bring in enough nuts. But thanks to the loan, the cooperative can pre-finance the shea collectors. The buyers are now guaranteed with a high-quality production and the MFI takes lower risks, because STARS helps the cooperative with their financial management. Thanks to this financial product, STARS was able to finance more than 2,000 shea collectors for more than USD 27,000. “By making a contract with all stakeholders, we create a win-win situation for everyone,” STARS program lead in Burkina Faso Lassina Sanou explains. 

Expand the business
“STARS did a SCOPEinsight assessment of our union, which allowed us to clearly see our strengths and weaknesses. It showed that we were strong in sourcing our kernels from our 4,000 members, and that there is an ever-growing market for high-quality shea. Our weak points were our financial and internal management and the state of our equipment. In the past year, we addressed the issues, with coaching from STARS. Last year we produced 200 tons of shea butter, this year we are ready to double that,” president of USCPPK, Adeline Traore says confidently.

Despite the challenges, the ever-growing market offers new opportunities, both internationally as well closer to home, for those who know how to grab them. The union has many ideas to expand their business. “STARS supports us in developing a new business plan that will diversify our product line. We are going to pitch our idea for a soapmaking facility and showroom, which should attract new customers. Our market study was promising, we have a university nearby, with 25,000 students. There is also a zinc mine nearby, which could provide us another 20,000 workers. And we already have young entrepreneurs who have started to sell our products. We could engage youth to sell our soap in the surrounding villages and city,” the union’s coordinator Bahiome Bationo explains enthusiastically. “This would create extra employment!”

About STARS

The Strengthening African Rural Smallholders (STARS) program is a five-year program (2017-2021) implemented by ICCO Cooperation in partnership with Mastercard Foundation. Through a market systems development approach it focuses on improving access to finance and markets for 210,000 smallholders in Ethiopia, Rwanda, Senegal, and Burkina Faso.