**3. Dynamics of building a soybean value chain**

Michael Porter (1986) who is the author of the value chain concept developed it in his reference book "Competitive Advantage". The value chain describes all the activities necessary to carry out a product or a service from its conception, through different phases of production to its distribution to final consumers, then to its destruction after use. It breaks down activity into sequences of elementary operations and identifies sources of potential competitive advantage. This breakdown improves the overall performance of the value chain by strengthening each link and links between links.

As production is only one of the stages in creating added value, knowing the dynamics of building soybean value chain involves breaking down all of the activities that structure it, all linked to each other.

#### **3.1 Tentative assessment of financial effects induced by the marketing of regional soybean production**

Regional soybean production follows two marketing trajectories: contract buying and free selling on domestic markets. The first trajectory is supported by the Soybeans Processing Industry of Cameroon (SOPROICAM) which has set up a network of 20,000 farmers present in more than 2000 producer organisations. The contractual relationship is framed by two provisions guaranteeing the supply to producers of inputs (fertilisers and herbicides) at the start of the crop year and the obligation to deliver the crops to SOPROICAM at a price fixed in advance by the two parties. The kg fixed for the 2018–2019 agricultural campaign was CFAF 170 (or EUR 0.259), against CFAF 120–150 (EUR 0.182–0.228) on the domestic market. For this campaign, this company collected 6,000 tonnes of soybeans (60,000,100 kg bags) worth CFAF 1,020,000,000 (EUR 1,554,980). The unsatisfied purchase forecast for this campaign was 20,000 tonnes, which would have generated in the production segment alone a money supply in circulation in the region of CFAF 3.4 billion (EUR 5,183,270).

The second trajectory is organised around a network of wholesalers who source from producers in rural markets. These wholesalers act as intermediaries for cross-border or domestic agrifood companies. For example, the Cameroonian dairy company (Camlait), an agrifood company based in Douala, introduced, in 2019, 581,203 kg soybeans (5812 bags of 100 kg) in the manufacturing process of its milk-based products (Nouriss, Breaksoy and Riverr). This quantity represents between CFAF 69,744,360 and CFAF 87,180,45013 depending on the price in rural markets. In addition to food products, soybeans are one of the main feedstocks for poultry feed. Domestic demand, however, remains unevaluated, as does that of Nigerian agrifood companies, which have supplied Nigerian wholesalers with an important soybean purchasing channel for the past decade.

The attempt to assess the financial effects generated from proven national demand reveals the existence of significant economic potential, the optimisation of which would contribute to improving the incomes of farmers directly involved in trade relations with other links of the value chain. Despite uncertainties in the regional production data noted in the methodological framework, reaching 100,000 tonnes of production since the 2018 agricultural campaign would thus represent a minimum annual monetary value of CFAF 12.5 billion (EUR 19,056,100) for producers at the average price on the rural market. This estimate does not include the production of isolated basins in the Far North Region, which is not taken into account in this study. It does not equally include the added value generated by other links in the chain (distribution, transformation).

#### **3.2 Structuring elements of a soybean value chain**

The marketing trajectories analysed above highlight convincing elements in the structuring of a value chain that links four links (supply of basic goods and services, production, distribution, transformation) (**Figure 3**).

research or experimentation programme. Consequently, the seeds in circulation come from the repeated reuse of seeds taken from the crops. Production is therefore mainly ensured from so-called "all-coming" varieties resulting from these re-uses. This context is partly maintained by the absence of specific requests on varieties by food companies. Colour therefore is the

Soybean (Glycine max (L.) Merr.) Production in the Cameroonian Cotton Basin…

http://dx.doi.org/10.5772/intechopen.93981

143

**Figure 3.** Graphical representation of the soybean value chain in the Sudano-Sahelian region of Cameroon.

The second link in the value chain brings together two categories of producers. The first brought together nearly 20,000 producers in groups whether they have a legal existence or not with the administration in charge of cooperative companies. The second concerns producers who are not involved in any form of collective dynamics. The first initiatives to organise soybean producers emerged from 2011 in the Mayo-Rey Division and will quickly evolve towards the creation of increasingly structured groups despite the low legalisation rate observed (less than 10%). As noted above, SOPROICAM maintains a network of more than 2000 groups. The file of cooperative societies in the North Region references ten legalised cooperatives of soybean producers since 2017, including six in the only Mayo-Rey Division which provides

Women represent 20% of the group members. This small proportion could be explained by the density of labour-intensive tasks on the one hand, and the immediate financial profitability that the sale of soybeans provides arousing great interest among men on the other hand. The third link represents the heart of the value chain. It is made up of SOPROICAM and a network of Cameroonian and Nigerian wholesalers, two actors in the governance of the soybean sector. Their respective role in marketing has already been explained in the functioning of the trajectories presented above (2.1.). If it is true that the first actor has invested in the control of the sector from the field to the factory, wholesalers meanwhile are agents of execution of the strategic choices of agrifood companies expressed through the formulation of quantitative

only criterion for differentiating soybeans between red and white.

80% of the production in the North Region (**Table 2**).

and qualitative needs.

The first link is built around four uncoordinated actions which nevertheless make it possible to effectively support the supply of basic agricultural services (seeds, fertilisers, herbicides and financing). Within the framework of its contractual relationship with producer groups, SOPROICAM ensures the supply of inputs to groups that express demand. These are mineral fertilisers of ternary combination N (nitrogen) - P (phosphate) - K (potassium) of formulation 12-24-12 and 20-10-10, as well as herbicides (glyphosate, roundup). The first formulation is specific to the production of legumes whose natural nitrogen production potential directs mineral requirements more towards phosphate. The second formulation which is more suited to the cultivation of maize, responds to a specific request from farmers to the company to support cereal production intended for self-consumption. This company also plays the role of guarantor with micro finance establishments for the granting of loans to producers.

Farmers' growing interest in soybeans has, however, led to the development of the chemical input marketing activity through a network of small distributors who supply rural markets. However, a weak segment of this link remains the supply of seeds, most of which are harvested. Since the introduction and popularisation of varieties adapted to ecology by SODECOTON from 2007 to 2010 (so-called "local" varieties: Houla 1, Houla 2, TGX-849- 29-4D, ESA, SJ 235; varieties from the IITA collection of Ibadan in Nigeria: TGX 1448 2E, TGX 1485 1D and TGX 1910 14F), seed production has no longer been the subject of a specific

<sup>13</sup> Or EUR 106,325 and EUR 132,906.

Soybean (Glycine max (L.) Merr.) Production in the Cameroonian Cotton Basin… http://dx.doi.org/10.5772/intechopen.93981 143

**Figure 3.** Graphical representation of the soybean value chain in the Sudano-Sahelian region of Cameroon.

research or experimentation programme. Consequently, the seeds in circulation come from the repeated reuse of seeds taken from the crops. Production is therefore mainly ensured from so-called "all-coming" varieties resulting from these re-uses. This context is partly maintained by the absence of specific requests on varieties by food companies. Colour therefore is the only criterion for differentiating soybeans between red and white.

The second link in the value chain brings together two categories of producers. The first brought together nearly 20,000 producers in groups whether they have a legal existence or not with the administration in charge of cooperative companies. The second concerns producers who are not involved in any form of collective dynamics. The first initiatives to organise soybean producers emerged from 2011 in the Mayo-Rey Division and will quickly evolve towards the creation of increasingly structured groups despite the low legalisation rate observed (less than 10%). As noted above, SOPROICAM maintains a network of more than 2000 groups. The file of cooperative societies in the North Region references ten legalised cooperatives of soybean producers since 2017, including six in the only Mayo-Rey Division which provides 80% of the production in the North Region (**Table 2**).

Women represent 20% of the group members. This small proportion could be explained by the density of labour-intensive tasks on the one hand, and the immediate financial profitability that the sale of soybeans provides arousing great interest among men on the other hand.

The third link represents the heart of the value chain. It is made up of SOPROICAM and a network of Cameroonian and Nigerian wholesalers, two actors in the governance of the soybean sector. Their respective role in marketing has already been explained in the functioning of the trajectories presented above (2.1.). If it is true that the first actor has invested in the control of the sector from the field to the factory, wholesalers meanwhile are agents of execution of the strategic choices of agrifood companies expressed through the formulation of quantitative and qualitative needs.


diagnosis of the organisation and functioning of production as a strategic link in the value chain highlights three major constraints relating to the structuring of producers, the provision

Soybean (Glycine max (L.) Merr.) Production in the Cameroonian Cotton Basin…

http://dx.doi.org/10.5772/intechopen.93981

145

With regard to the first constraint, the collaboration model implemented by SOPROICAM tends to polarise all producers towards the creation of structured and legalised groups. Despite the current proliferation of independent wholesalers, consolidating the distribution link means moving towards the establishment of true merchant cooperatives. This future trend implies for producers to build real organisations whose legal existence constitutes a foundation of credibility vis-à-vis other actors in the value chain. However, the low proportion of registration by the competent administration of existing structured groups with a view to obtaining the status of cooperatives results in difficulties in opening accounts in financial and banking establishments due to the lack of a reliable guarantee; refusal to pay membership

From the point of view of the provision of agricultural services, the support of distribution players to producers constitutes a dusting which, far from boosting production, keeps farmers in a spiral of dependence on buyers. Several farmers denounce the low level of inputs supplied by SOPROICAM (less than 40–50% of the needs expressed) in exchange for the exclusive purchase of the crops. The fixing of the purchase price at the start of the crop year thus reinforces this dependence of farmers on the company. This context therefore contributes to the establishment of an unsustainable debt cycle in the medium and long term by farmers, many

This second constraint is also marked by the absence of a seed sector to sustainably increase yield. With an average yield of 1 tonne/ha, soybean productivity does not bode well for the prospects of sustainable growth, thus justifying the intensification of land clearing and deforestation to expand the cultivated areas, despite the virtual absence of mechanisation of

As a corollary to the above, the regional soybean market is characterised by inter-annual price instabilities that are highly detrimental to farmers in terms of making production forecasts due to market uncertainty. In 2012 for example, the kg of soybeans cost CFAF 220 (EUR 0.335) against CFAF 120–150 (EUR 0.182–0.228) between 2017 and 2019. The strong presence on the domestic markets of Nigerian wholesalers frequently subject to variations in the cost of Naïra

Ultimately, beyond the institutional will displayed to support the soybean sector by the launch in 2014 of a dedicated agropolis in the Far North Region, it is difficult to see concrete

In this study, we have proposed to analyse the sustainability issues of the productive and market dynamics built around soybeans, speculation subject to strong demands for international competitiveness and which at the same time has a strong potential for improving

of agricultural services and the functioning of market.

of whom opt for direct sales on domestic markets.

production and technical supervision by State services.

(devaluation) is a factor which reinforces market uncertainties.

**5. Conclusion**

actions on the ground, strengths of the State for the benefit of key players.

fees by members; leadership struggles and internal confidence crises.

Source: Surveys of producers' cooperatives and base of cooperative societies of the North Regional Delegation for Agriculture and Rural Development (April 2020).


**Table 2.** Spatial distribution of cooperative producers of soybeans in Mayo-Rey (2019).

**Table 3.** Main agri-food companies processing soybeans in Cameroon.

The fourth link brings together all of the processing companies whose activities relate to the production of vegetable oil, dairy products, edible flours, oil cakes and animal feed. The study identified five main companies under Cameroonian law, soybeans being one of the main raw materials in the production process (**Table 3**).

The existence of the above four links and the market relationships between them confirm the presence of structural elements in a soybean value chain. The growing investment of distribution and processing players in supporting the productive dynamics testifies today's challenges for a need to perpetuate regional supply to meet increasing domestic and cross-border demand.
