Improving Agricultural Market Performance:
Creation and Development of Market Institutions
43
Gambia Produce Marketing Board (GPMB)84
Larger than all other Gambian state-owned marketing boards put together, the Gambia
Produce Marketing Board (GPMB) had been a mainstay of the Gambia's economy, dating back
to pre-independence times. GPMB, established in 1973 from predecessor entities, possessed a
monopoly on groundnut marketing, decortication and oil pressing. Throughout the mid-l970s
the company amassed huge cash reserves due to the high prices received for its exports and
the relatively low prices paid for inputs. GPMB became a cash cow, providing up to 45% of
Government revenues and 30% of total domestic investment during the 1970s. The
Government expected GPMB to make loans or grants to the Government, to maintain reserves
and price stabilization funds, and to provide credit to groundnut producers.
Groundnut prices rise by 142% from 1971 to 1977, but instead of raising producer prices
GPMB built up its cash reserves, which it deposited with the Central Bank. Until the mid-1980s,
when an economic recovery program sponsored by the World Bank and other donors was
launched, GPMB had been obliged to make uneconomic investments and provide various
subsidies and guarantees. These included:
 Investments in cotton ginning, soap making, citrus production and feed milling;
 Loans to government;
 Consumer subsidies on rice, fertilizer and local groundnut oil sales;
 Interest on bridging loans obtained by the central bank; and
 Credit in kind to the GCU and the department of agriculture for fertilizer and seed.
Groundnut prices fell in the late 1970s and 1980s and domestic production also fell as a
consequence of the Sahel drought. Government, however, directed GPMB to subsidize
producer prices by the difference between GPMB's breakeven producer price and the actual
price paid to farmers. For example, by the 1982/83 growing season, the export price for
decorticated nuts had fallen from a peak of US$356 a ton to US$275, and GPMB's breakeven
price had dropped from US$134 to US$90. But on the instructions of Government, GPMB was
required to maintain a producer price of US$173 per ton, and so incurred a loss of US$83 on
every ton of groundnuts it purchased.
By 1991, shortly after Government, under pressure from donors, decided to privatize it,
GPMB’s cash reserves were fully depleted and its domestic debt stood at US$7.1 million.
The 1992 privatization of GPMB, now renamed Gambia Groundnut Corporation (GGC), in
concert with liberalization of the agriculture sector, was far from perfect. The privatization
process lacked transparency and the management contract with the foreign investor
incentivized maximization of short-term profit, which hurt farmers’ incomes and encouraged
smuggling of groundnuts to Senegal, where they could fetch a higher price. But it did produce
several beneficial effects, including:
84 Krakoff, C. & McKeon, K. (1994), “Privatization in the Agricultural Sector in Africa: The Case of the Gambia Produce
Marketing Board,” Draft Report, PAD Case Studies, Price Waterhouse LLP/Abt Associates Inc., available at
[Accessed July 2017].