version 1 warehouse management manual · constitution/ bylaws ... this model is attractive because...

Warehouse ManagementManual

Version 1

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Table of ConTenTs

Introduction ........................................................................................................................................................................................................................................................................................................................................................................3Key Performance Indicators (KPIs) .................................................................................................................................................................................................................................................................................................3

Part I: Warehouses .....................................................................................................................................................................................................................................................................................................5Location and Structure .....................................................................................................................................................................................................................................................................................................................................5

Network of Small Warehouses ............................................................................................................................................................................................................................................................................................................5Large, Centralized Warehouses ..........................................................................................................................................................................................................................................................................................................5Communities Not Accessible by Road .....................................................................................................................................................................................................................................................................................6

Construction ......................................................................................................................................................................................................................................................................................................................................................................6Local Contribution to Construction ............................................................................................................................................................................................................................................................................................6

Part II: Warehouse CooPeratIves..........................................................................................................................................................................................................................7Organization ......................................................................................................................................................................................................................................................................................................................................................................7Structure ...................................................................................................................................................................................................................................................................................................................................................................................7Size .....................................................................................................................................................................................................................................................................................................................................................................................................8Management .....................................................................................................................................................................................................................................................................................................................................................................8Leadership .............................................................................................................................................................................................................................................................................................................................................................................8

Warehouse Cooperative Management Committee ...............................................................................................................................................................................................................................................8Women’s Groups ....................................................................................................................................................................................................................................................................................................................................................8Office Tenure ...............................................................................................................................................................................................................................................................................................................................................................9Subcommittees .......................................................................................................................................................................................................................................................................................................................................................9Other Activities ........................................................................................................................................................................................................................................................................................................................................................9

Legal Status .......................................................................................................................................................................................................................................................................................................................................................................9Membership .......................................................................................................................................................................................................................................................................................................................................................................9

Women’s Groups ....................................................................................................................................................................................................................................................................................................................................................9Warehouse Cooperatives ...........................................................................................................................................................................................................................................................................................................................9

Benefits ...................................................................................................................................................................................................................................................................................................................................................................................10

Part III: Warehouse oPeratIons .............................................................................................................................................................................................................................11Meetings ...............................................................................................................................................................................................................................................................................................................................................................................11Management .................................................................................................................................................................................................................................................................................................................................................................11Price Research ..............................................................................................................................................................................................................................................................................................................................................................11Pre-Financing ................................................................................................................................................................................................................................................................................................................................................................11Profit Sharing ................................................................................................................................................................................................................................................................................................................................................................11Receiving Shea Kernels ..............................................................................................................................................................................................................................................................................................................................14Weighing Shea Kernels ................................................................................................................................................................................................................................................................................................................................14Recording Shea Kernel Deposits ..................................................................................................................................................................................................................................................................................................14Making Payments ..................................................................................................................................................................................................................................................................................................................................................14Contracts ..............................................................................................................................................................................................................................................................................................................................................................................14Accounting .......................................................................................................................................................................................................................................................................................................................................................................14Other Income Generating Activities ......................................................................................................................................................................................................................................................................................15

annexes ............................................................................................................................................................................................................................................................................................................................................................16Part I: Warehouses ................................................................................................................................................................................................................................................................................................................................................17Part II: Warehouse Cooperatives ...................................................................................................................................................................................................................................................................................................19

CONSTITUTION/ BYLAWS ....................................................................................................................................................................................................................................................................................................................... 20Part III: Warehouse Operations ........................................................................................................................................................................................................................................................................................................24

BUYER CONTRACT ........................................................................................................................................................................................................................................................................................................................................... 25QUALITY STANDARDS ................................................................................................................................................................................................................................................................................................................................. 27SAMPLE EXPENSE AND PROFIT CALCULATIONS FOR GHANA ............................................................................................................................................................................................................. 29SAMPLE RECEIPT LEDGER ...................................................................................................................................................................................................................................................................................................................... 30SAMPLE RECEIPT SLIP .................................................................................................................................................................................................................................................................................................................................. 31

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InTroduCTIon

The Global Shea Alliance is pleased to issue this manual to our sustainability program partners. The manual provides suggested best practices and tools for the construction and management of shea kernel warehouses for women’s groups.

There are several options for best practices in each section, and we anticipate a variety of approaches based on the needs of women’s groups and warehouse sponsors. The Global Shea Alliance will utilize Key Performance Indicators described below to evaluate the efficacy of the approaches and further develop best practices.

This initial version was compiled with consultation and support from the USAID Nigeria Expanded Trade and Transport (NEXTT) project, Just Shea, SNV, StarShea Ltd, Technoserve, and the USAID West Africa Trade Hub. The manual will be updated annually, incorporating feedback from the executive committee, sustainability partners, working groups, and the general assembly.

Key PerformanCe IndICaTors (KPIs)

The Global Shea Alliance uses three key performance indicators to determine the success of the warehouse work stream. Sustainability partners will report on these indicators annually. The KPIs include:

1. Number of women collector beneficiaries. This KPI is determined by recording the total number of women collectors who contribute shea kernels to each warehouse project.

2. Improved profit per woman collector. This KPI is determined by comparing the profit of individual collectors received through the warehouse to the profit received through local village sales.

3. Volume and value of kernels sold by women’s groups. This KPI is determined by evaluating the fulfilled contracts of women’s groups.

KPI 1Number of

women bene�ciaries

KPI 3Volume and

value of kernels sold

KPI 2Pro�t per woman

collector

Up to 51% greater pro�t compared to the village price

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5

Part I: WarehousesThe size, location, and building materials of shea warehouses will be particular to each community. However, the Global Shea Alliance provides several options for each decision.

loCaTIon and sTruCTure

The location and structure of warehouses will depend on proximity to a main road and the size and structure of local women’s groups. This manual provides multiple models for sustainability partners to consider.

Network of Small WarehousesA sustainability partner may construct a series of small warehouses (e.g. 100-bag capacity) where multiple shea collector communities live close together along a good road:

It is important to note that the total capacity must add up to 500 bags to attract buyers. This model is attractive because it may be easier for smaller women’s groups to aggregate lower quantities. A series of smaller warehouses can also reduce transportation costs for women compared to the cost of bringing their shea kernels to a larger, centralized warehouse. However, all communities must be easily accessible by the buyer’s truck along the same road.

Large, Centralized WarehousesA sustainability partner can construct a large central warehouse (e.g. 1,000-bag capacity) along a good road in an area surrounded by shea collecting communities.

This model is attractive to buyers because it provides an easy and centralized pick-up location. However, some communities may pay more in transport costs, and it requires more coordination of women’s groups. Women must know what days the warehouse is open for deposit.

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Communities Not Accessible by RoadA sustainability partner can construct a series of small storage sheds in various communities where the communities are not easily accessible by road, e.g. where they are cut off from vehicles by a river during the rainy season. Shea collectors can store their kernels in these smaller storage sheds until they are able to access the main warehouse.

In all cases, the structure should always be located along a good road that is well connected to major transport corridors. The warehouses must be accessible to semi-trailer trucks that will pick up the shea kernels. Please note that when the distance to the warehouse is different for different communities, transport costs should be subsidized to ensure that everyone pays the same amount to bring their kernels to the warehouse.

Land for the warehouse should be donated by the community leadership after discussions with the chief. The community leadership should provide written documentation of the donation. The warehouse cooperative should also obtain a deed or title from the appropriate government body to verify ownership and leasing rights.

ConsTruCTIon

The dimensions of the warehouses will depend on the structure of the warehouse cooperative and the appropriate model for the shea communities.

For a 500-bag warehouse, the warehouse should include at least 135 square meters of floor space. Five hundred bags of shea kernels is equal to 40 metric tons. For a 1,000-bag warehouse, the warehouse should include at least 270 square meters of floor space. One thousand bags of shea kernels is the equivalent of 80 metric tons. Inside the warehouse, shea kernel bags are often stacked 8 bags high. All warehouse designs should include a covered area for receiving the kernels with a platform for quality control inspections and a small lockable office space.

Potential building materials include concrete, corrugated tin, bamboo, mud and shipping containers; where possible, “green” materials should be used. Existing structures may be used provided they meet the minimum qualifications detailed above, or they can be modified accordingly. The structure should be well ventilated to maintain the quality of the kernels.

loCal ConTrIbuTIon To ConsTruCTIon

Communities should participate in the construction of the warehouse, either through direct labor or by paying a small fee. Contributing to the warehouse creates a sense of ownership, which encourages the cooperative to care for and maintain the warehouse. Communities that join the warehouse cooperative after the facility has been built should expect to pay a registration fee.

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Part II: Warehouse Cooperatives

A warehouse cooperative (WC) is an organization of women’s groups that collect shea kernels. Forming a warehouse cooperative is beneficial to these women because they can aggregate their kernels, obtain contracts from buyers, and sell their harvests for a percentage beyond the village price. Key features of cooperatives include registration with the government, the ability to open bank accounts, and the ability to obtain financing to support their activities. To form a warehouse cooperative, it is important to consider the organization, management, and membership of the women’s groups.

organIzaTIon

This section discusses best practices on organizing a warehouse cooperative, including the structure and size.

sTruCTure

A warehouse cooperative is comprised of a number of women’s groups that contribute shea kernels to a designated warehouse or network of warehouses.1 A women’s group is a formal, registered organization of shea collectors who were once part of smaller, informal groups. They sell shea kernels in village and town markets.2 They have a leadership structure and meet on a regular basis.

Warehouse cooperatives can be structured as in the diagram below.

1 In communities with well-established women’s groups, the groups may already belong to a larger cooperative union. The Global Shea Alliance envisions the warehouse cooperative serving a subset of the union, depending on the size of the union. It is possible to have multiple warehouse cooperatives in one cooperative union.2 In some communities, women shea collectors are members of informal groups. These groups are not registered with the local government, and the women collect shea kernels in smaller quantities. The Global Shea Alliance recommends building the capacity of these groups to become formal women’s groups before forming a warehouse cooperative.

Warehouse Cooperative

Women’s Group

Women’s Group

Women’s Group

Informal Group

Informal Group

Informal Group

Informal Group

Informal Group

Informal Group

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sIze

Informal groups are often made up of anywhere between 10 and 50 women shea collectors. Once they organize themselves into women’s groups, the ideal size is 30 members, as this number allows members to contribute financially and to represent themselves at meetings.

The ideal size of a warehouse cooperative depends on the demand of the buyer and the size of the warehouse. Warehouses can be built to hold either 500 or 1,000 bags of shea kernels. Buyers purchase 500 bags of shea kernels at a time (one truck can transport 500 bags). Based on our estimates, each woman contributes, on average, two (2) to three (3) bags of shea kernels per season. Therefore, a 500-bag warehouse requires 150 to 250 women to fill one truckload. With 30 women per group, a warehouse cooperative comprised of six (6) or seven (7) groups could fill a truck. A 1,000-bag warehouse requires approximately 350 to 450 women to fill two truckloads (of 500 bags each).

For 500-bag warehouses, the Global Shea Alliance recommends working with 2 to 3 communities large enough to support 2 to 3 women’s groups each. For 1,000-bag warehouses, it is best to work with 4 to 6 communities that can support 2 to 3 women’s groups each.

managemenT

A warehouse cooperative should have leadership in place to ensure functioning of the warehouse and the legality of the cooperative.

leadershIP

The warehouse cooperative should have a management committee. Local women’s groups should also have a leadership structure.

Warehouse Cooperative Management CommitteeThe role of the management committee is to supervise the functioning of the warehouse. The management committee should be comprised of one representative from each women’s group in the cooperative. The management committee members will assign the following roles among themselves:

President• Leads implementation of decisions taken by the WC• Engages other stakeholders (local government officials, chiefs, etc.) on issues of concern to the WC• Organizes and leads regular meetings of the WC• Operates bank account jointly with Treasurer and Secretary

Secretary• Informs representatives of time and location of meetings• Operates bank account jointly with President and Treasurer• NB: in communities with low literacy rates among women, the Secretary may be a man who is not otherwise a part of the

group. He should receive some small form of compensation for his duties.

Treasurer• Collects payments from buyers and member dues and deposits them in WC’s bank account• Makes payment to local women’s groups in accordance with approved payment structure• Reports on financial status of the WC• Operates bank account jointly with President and Secretary

Women’s GroupsLocal groups will elect the executive officers of their groups. Elections should take place at the first meeting held during an election year, and voting should be conducted by secret ballot. The leadership of women’s groups can be made up of the following roles:

President• Represents women’s group at WC management committee • Reports to women’s group on decisions/actions taken by WC• Engages other stakeholders (local government officials, chiefs, etc.) on issues of concern to the local group• Organizes and leads regular meetings of the group• Operates bank account (if any) jointly with Treasurer and SecretarySecretary

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Secretary• Disseminates information to members, including time and location of meetings• Operates bank account (if any) jointly with President and Treasurer• NB: in communities with low literacy rates among women, the Secretary may be a man who is not otherwise a part of the

group. He should receive some small form of compensation for his duties.

Treasurer• Collects member dues and deposits in bank account (if any)• Reports on financial status of the group• Operates bank account (if any) jointly with President and Secretary

Quality Demonstrator• Participates in quality trainings for training of trainers and then trains local group• Assists President to supervise quality control

Office TenureThe Global Shea Alliance makes the following recommendations for office tenure for both the management committee and the women’s groups:

• Officers should serve for a period of two (2) years.• Officers may serve a maximum period of two terms (4 years).• Past officers should be permitted to contest and be voted into another executive position if they so wish, hence enabling

them to serve the association in other capacities.

An individual may be removed from office:

• If she acts in violation of the by-laws• If she is incapable of performing the functions of her office by reason of infirmity of body or mind• If she conducts herself in a manner which brings or is likely to bring the office into disrepute, ridicule or contempt• If she embezzles funds or recklessly handles finances of the co-op, or is inefficient or negligent in the discharge of her duties• Upon relocation from the community

An officer who wishes to resign needs to inform the group members and the President two weeks in advance. The association will elect a new member to fill the vacancy until the tenure of the one who resigned elapses. In case the President intends to resign, she needs to give 4 weeks’ notice to the Secretary. The Secretary will assume her position until her tenure ends, and the co-op will elect a new Secretary for the remaining period.

SubcommitteesWomen’s groups may also form subcommittees on different topics, e.g. marketing, price data collection, quality, etc.

Other ActivitiesGroups should maintain a social fund financed through member dues. The social fund can be used as a savings system for financial assistance to members for certain occasions, e.g. funerals, school fees, etc.

legal sTaTus

The warehouse cooperative should register as a legal entity according to the laws of each country. Registering facilitates opening and holding bank accounts and signing contracts with buyers. Women’s groups can be officially registered as cooperative societies or can remain informal groups.

membershIP

The Global Shea Alliance has established the following criteria for joining a women’s group or warehouse cooperative.

Women’s GroupsFor an individual to join an existing women’s group, she must be a shea kernel collector, participate fully in all recommended training programs, and pay regular dues in a timely manner. Membership should be open to women of all ethnicities, tribes, races, cultures, religions, national origins and those with disabilities.

Warehouse CooperativesFor a women’s group to join a warehouse cooperative, the group must complete quality trainings, include not less than 15

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members and not more than 50, and pay regular dues, which will be deducted from sales through the warehouse cooperative.

As a best practice, the Global Shea Alliance recommends that only member groups of the warehouse cooperative may store their shea kernels at the warehouse. Non-members may store other commodities for a fee on a space-available basis.

benefITs

There are several benefits of forming or joining a warehouse cooperative. The most important benefit for shea collectors is the improved profit per bag. By joining a cooperative and signing contracts to sell their kernels, shea collectors can increase their profit by up to 51 percent. Additionally, women’s groups can securely store their shea kernels in well-ventilated warehouses and can access trainings and educational programs, such as quality assurance trainings. As members of women’s groups, the women can participate in the community social fund which provides a financial safety net for members.

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Part III: Warehouse operationsThis section provides best practices on the operation of warehouses.

meeTIngs

The management committee of the warehouse cooperative should meet monthly. Costs related to transport and food for the meetings should be covered by the warehouse cooperative and can be deducted from sales as an expense.

managemenT

Day-to-day management of the warehouse should be handled by a manager hired by the warehouse cooperative. The manager should be paid on a daily rate, and the salary will be subtracted as an expense from the warehouse sales. The warehouse should have two locks with two separate keys. One key should be held by the Manager and the other by the Secretary from the group located closest to the warehouse.

PrICe researCh

In order to determine the prices paid by the warehouse cooperative for deposits of shea kernels, the following information can be easily obtained by word-of-mouth:

• Prevailing farm gate or village price, by bowl• Local market price, by bowl or bag• Port/FOB price, by MT

The prices at the warehouse cooperative should be provided per kilogram based on the local market bowl price (the most common reference point for the women). Assumptions would include an 85-kilogram bag and a certain number of bowls per bag, which will vary by market. Pricing should also take into account the cost of transportation, handling, etc.

Pre-fInanCIng

The ability to provide pre-financing is critical to the success of the warehouse cooperative. If the warehouse cooperative itself is not established enough to obtain a bank loan, grant, or other form of funding, it should be paired with an NGO or similar organization with the capacity to obtain such funding.

In the latter case, the NGO should build the capacity of the warehouse cooperative over a 7- to 10- year timeframe to operate independently. As noted above, the warehouse cooperative should set a pre-financing amount equal to the local market price.

The WC may also operate a Warehouse Receipts System in coordination with a local financial institution, particularly in cases where pre-financing is not otherwise available. The receipt provided to the women collector when she deposits her kernels with the WC can be used as collateral to obtain a loan. To be effective, the financial institution must be able to work through field agents who can visit the local communities on a weekly basis to make loan payments based on the warehouse receipts.


ProfIT sharIng

The purpose of storing the kernels in the warehouse is to sell a larger quantity of kernels and obtain a higher price per bag.

Once the kernels have been sold, the WC should first deduct all expenses. The calculation of expenses should be a transparent process so that all women understand what expenses have been deducted. Expenses can be posted in a public place for the women to see. Sample expenses include:

• Labor costs for:• Manager• Secretary• Security guard• Loading/unloading• Sewing

• Working capital plus interest and currency depreciation• Maintenance (replacement of pallets, padlocks, scales, etc. as well as structural repairs)• Supplies (receipt books, sewing supplies, markers, etc.)• Transportation to market/port• Loss of weight (moisture) during storage/transport• Village transportation subsidy• Group dues• Cooperative registration renewal fees

The remaining profit should be divided by the total kilograms sold to obtain a per-kilogram bonus payment. Funders and/or organizations managing the warehouse cooperatives must commit to providing at least a 25% increase in net profit over the June market price to each woman collector. Maximum profits are obtained by selling at the FOB port price, after deducting transportation cost to the nearest port. The Global Shea Alliance highly recommends adopting this best practice and ensuring women’s groups obtain the FOB price at the port.

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Pre-�nancing and interestTransportation subsidies to warehouseWarehouse manager to oversee... Secretary Security Loading/unloading kernels Sewing bagsWarehouse maintenance costsO�ce supplies for record keepingAnnual group duesTransport of kernels to port + weight loss

$17,610$943

$1,289$157$755$220

$94$1,174

$63$708

$3,491

$26,504

KPI 2Improved

pro�t of 51% per woman

collector

COSTS

TOTAL COSTS

REVENUES

$15.72AVERAGE VILLAGE PRICE PER BAG

3 Communities

15 Women’s Groups

450 Women

Without a Warehouse Cooperative

With a Warehouse Cooperative

$15.72$8.09

$23.81

AVERAGE VILLAGE PRICE PER BAGADDITIONAL PROFIT PER BAGTOTAL PROFIT PER BAG

Wom

en co

llect 2-3 bags of kernels each

KPI 1Number of

women bene�ciaries

Wom

en co

llect 2-3 bags of kernels each

450 Women

1000 bag warehouse

Sell 1,000 bags (80 MT) at port $34,591

KPI 3Volume and

value of kernels sold

$31,884 – $26,504 = $8,087

$8,087/1000 = $8.09

PROFIT

PROFIT PER BAG

PROFIT PER WOMAN$47.62

PROFIT PER WOMAN<$31.44

The following graphic illustrates women collectors’ increase in profit from joining a warehouse cooperative. A more detailed calculation of costs and expenses can be found in the annex documents. These figures are based on those in the annex and on an exchange rate of 1 USD = 3.18 GHS.


reCeIvIng shea Kernels

The WC should set specific days of the week and times to receive shea kernels. The frequency will vary with the season, but warehouse cooperatives should aim for at least 10 bags per day. The warehouse manager is responsible for receiving the kernels.

Kernels can be delivered by the individual collector or by a representative from one of the groups that comprises the warehouse cooperative, provided that all kernels were collected by women of warehouse cooperative member groups. The bags should be marked with the name of the group and the collector; the warehouse manager is responsible for verifying that the kernels come from group members.

The warehouse manager should use the quality control platform to visually inspect the kernels and test for moisture. The use of GSA quality standards is encouraged. Women’s groups should elect representatives to attend quality campaign training of trainers seminars. These representatives will return to the women’s groups and implement quality trainings in the communities. The women’s groups should also encourage enforcement of these quality standards for quality shea kernels.

WeIghIng shea Kernels

The warehouse manager should weigh and record each bag, subtracting one kilogram for the weight of the jute bag itself.

reCordIng shea Kernel dePosITs

The information should be recorded in a receipt book, and the manager should provide the collector with a carbon copy receipt. The information should also be recorded in a separate ledger maintained by the warehouse cooperative.

No payments are made at the time of receipt; see the “Making Payments” section below.

maKIng PaymenTs

After the kernels are deposited at the warehouse by the women collectors or their group representative, the warehouse manager should crosscheck the warehouse cooperative records with those maintained at the group level.

Once the records have been verified (typically within a week after the kernels have been deposited at the warehouse), the warehouse manager will make payments directly to each woman collector, accompanied by an officer from her local group.

Each woman should provide a signature and/or thumbprint to verify receipt of her payment; one copy should be kept by the warehouse cooperative and one by the woman. After the kernels have been sold and all expenses have been deducted, the WC manager should calculate the additional profit for each woman based on the per-kilogram bonus payment. Payment should then be made in the same manner as above.

ConTraCTs

As part of the program, the GSA strongly recommends women’s groups to sign contracts with the buyers for all purchases of shea kernels.

Contracts are typically signed at the start of the shea season (May/June) for a specific volume and a fixed price, with a provision allowing the warehouse cooperative to renegotiate the price if the prevailing market price at the time of sale exceeds the price agreed to in the contract.

Contracts should include quality standards, e.g. levels of FFA and moisture, which will be measured by the buyer at the time of receipt of the kernels. Contracts may include a provision for premium payments for high quality kernels, e.g. those with FFA levels below a certain level. Contracts must be respected by both parties in accordance with the Code of Ethics of the GSA.

aCCounTIng

The warehouse cooperative should maintain a simple accounting system to monitor the inflow and outflow of funds to the group.

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oTher InCome generaTIng aCTIvITIes

The warehouse cooperative is encouraged to undertake other income generating activities to supplement their profits from aggregating and selling shea. As shea is not a year-round agricultural product, warehouse cooperatives can use the warehouse in other ways to generate income. The following activities are examples:

• Rent out space in the warehouse during the off season for other uses, such as for activities in partnership with the World Food Programme

• Support general agricultural activities, particularly women’s crops• Rent out the warehouse as a general purpose space for weddings, church events, etc.• If the warehouse has power, set up a cold store shop, a kiosk for charging cell phones, etc.


annexes

Part I: Warehouses ................................................................................................................................................................................................................................................................................................17

Part II: Warehouse CooPeratIves.....................................................................................................................................................................................................................19CONSTITUTION/ BYLAWS ..........................................................................................................................................................................................................................................................................................................................20

Part III: Warehouse oPeratIons .............................................................................................................................................................................................................................24BUYER CONTRACT ................................................................................................................................................................................................................................................................................................................................................25QUALITY STANDARDS.....................................................................................................................................................................................................................................................................................................................................27SAMPLE EXPENSE AND PROFIT CALCULATIONS FOR GHANA ....................................................................................................................................................................................................29SAMPLE RECEIPT LEDGER.........................................................................................................................................................................................................................................................................................................................30SAMPLE RECEIPT SLIP .....................................................................................................................................................................................................................................................................................................................................31

17

Part I: Warehouses


Aggregation -Shea Nut Storage

Quality -Shea Nut Drying Area

Collaboration -Meeting Space

Warehouse DIaGraMsDesign and renderings by Framework Architecture. Design team: R D Gentzler AIA & Elisabete Duarte. www.fwarchitecture.com

19

Part II: Warehouse Cooperatives


ConstItutIon/ BYLaWs

oF

[Warehouse Cooperative]

August 2014

Preamble

We, the members of the [warehouse cooperative] located in [district, region, country]…do hereby freely enact, adopt, and accept for ourselves these bylaws/constitution as the guiding law for our operations.

1. Name: The name of the warehouse cooperative shall be [name] (hereinafter referred to as the [Cooperative])

2. Address: Proposed Address of the Cooperative

The Address of [District Assembly, where the Cooperative is situated / located]

3. Legal Status: i. The Cooperative is a legal entity gaining its recognition from the [appropriate governing body in the country]

as company limited by guarantee with registration number …………….., issued on the………………………. (date).

ii. The Cooperative is and shall continue to be a distinct legal entity and body corporate with the power to acquire, to hold and to alienate property of every description what so ever and with the capacity to acquire rights and obligations and having perpetual succession.

iii. All actions or suits, proceedings at law or any arbitration shall be brought by or against the Cooperative in the name of the Cooperative and the leadership may authorize any person or persons to act on behalf of the Cooperative and sign all such documents and take all such step as necessary in connection with any such proceedings.

4. Objectives [to be edited as necessary]i. Overall, implement the decisions and objectives of the network of member groups ii. Supervise provision of quality products from member groupsiii. Coordinate the distribution of inputs and the aggregation of products at agreed locations/warehousesiv. Support the establishment of social funds at the communities level that provide safety nets for members of

the Cooperativev. To undertake any activity that is in the interest of all the members of the Cooperative

5. Membership of the Warehouse Cooperative [to be edited as necessary]The Warehouse Cooperative is a registered entity and each of the groups shall elect a representative to represent them in the Cooperative.

5.1 Eligibility of members of the CooperativeAll members of the Cooperative must respect the following eligibility requirements:i. Be a shea kernel collector ii. Participate fully in all recommended training programsiii. Pay regular dues in a timely manneriv. Membership open to women of all ethnicities, tribes, races, cultures, religions, national origins and

those with disabilities

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5.2 Privileges of a Member of the Cooperativei. Receive premium prices for premium products supplied by members of the Cooperativeii. Sell shea products through the Cooperative by accessing the markets identified by the Cooperative

and the shea network iii. Access trainings and educative programmes such as quality assurance trainings and community

managed social funds training etc.iv. Access shea kernels and butter price information from reliable and professional sourcesv. Access donations from public/ donations targeted at organized shea processor groups within the

districtsvi. Participate in the community social fund which provide safety nets for members

5.3 Sources of Finance for the Cooperativei. Dues of [XX] shall be paid by each group to the Cooperative every [XX] months, as confirmed by the

Cooperative and approved by groupsii. The Cooperative could also receive grants from donors and/or buyers as corporate social

responsibilityiii. From application fees for membership by new groups who wish to join the Cooperative

organIzaTIon of The CooPeraTIve

Figure 1: Organizational chart

6. The Warehouse Cooperative6.1 Composition of Warehouse Cooperative

i. The Warehouse Cooperative shall be composed of an executive committee, a warehouse management committee, and one representative from each of the groups in the District.

6.2 Management Committee [to be edited as necessary]i. The Warehouse Cooperative shall be composed of a management committee made up of:

a. The Cooperative Executives: 1. President2. Secretary 3. Treasurer

6.2.1 Tenure of Office of Management Committee Executivesi. Office tenure for both member groups and WC Management Committee:

a. Officers should serve for a period of two (2) years.b. Officers may serve a maximum period of two terms (4 years).c. Past officers should be permitted to contest and be voted into another executive

position if they so wish, hence enabling them to serve the Cooperative in other capacities.

6.3 Function of the CooperativeThe warehouse cooperative shall have a management committee to direct the functioning of the warehouse.

i. The role of the management committee is to supervise the functioning of the warehouse. The management committee should be comprised of one representative from each women’s group in the cooperative (in most cases, the president of each group). The management committee members will assign executive positions among themselves.

ii. The representatives shall communicate views of groups to the Cooperative for discussions.iii. The warehouse management committees shall make decisions and provide feedback to all members

of the Cooperative.

Warehouse Cooperative

Groups

Informal Groups

Groups

Groups


6.3.1 Roles of the Cooperative Presidenti. The Cooperative President shall lead implementation of decisions made by the warehouse

cooperative,ii. Shall organize and lead regular meetings of the warehouse cooperative,iii. Shall provide updates on the status of implementation of decisions taken by the Cooperative,iv. Shall share with the Management Committee the views and problems of groups of the

Cooperative and shall also engage with stakeholders (District Assembly, Departments, Chiefs) on matters that seek to promote the welfare of Shea kernel and butter producers in the District and shall act as the spokesperson on members’ behalf in the District, and

v. She shall operate bank account jointly with the Cooperative treasurer and secretary.

6.3.2 Roles of the Cooperative Secretaryi. The Cooperative Secretary shall inform representatives of time and location of meetings,ii. Shall keep track of all discussions during meetings of the Cooperative,iii. Shall periodically remind all executives of key decisions taken at meetings for implementation,

andiv. She (or he) shall jointly operate the Cooperative accounts with the president and the

treasurer.

6.3.3 Roles of Cooperative Treasureri. The Cooperative Treasurer shall ensure that all payments of product sales to groups are

made by the warehouse cooperative, ii. Shall be responsible for collecting any dues of members of the Cooperative and depositing

them in the accounts of the Cooperative,iii. Shall be responsible for communicating data on number of required packaging materials

(jute sacks, carton boxes) and ensuring delivery of the materials to cluster organizers.iv. Shall jointly operate the Cooperative bank account with the president and secretary, andv. She (or he) shall report on the financial status of the Cooperative, highlighting the assets and

liabilities of the Cooperative within the period.

6.4 Local Women’s GroupsLocal groups shall elect executive officers of their own groups. Elections shall take place at the first meeting held during an election year, and voting will be conducted by secret ballot.i. Local groups shall have the following executive positions and responsibilities:

a. President1. The President shall represent the local group on the WC Management Committee, 2. Shall report to local group on decisions/actions taken by WC,3. Shall engage other stakeholders (local government officials, chiefs, etc.) on issues of

concern to the local group,4. Shall organize and leads regular meetings of the group, and5. She shall operate bank account (if any) jointly with Treasurer and Secretary.

b. Secretary1. The Secretary shall disseminates information to members, including time and

location of meetings, and2. She (or he) shall operate bank account (if any) jointly with President and Treasurer.

c. Treasurer1. The Treasurer shall collect member dues and deposits in bank account (if any),2. Shall report on financial status of the group, and 3. She (or he) shall operate bank account (if any) jointly with President and Secretary.

d. Quality Demonstrator1. The Quality Demonstrator shall participate in quality trainings for TOTs and then

train local group, and 2. She shall assist the President to supervise quality control.

7. Cooperative Meetingsi. The venue for meetings should be decided by Cooperative leaders, preferably in the district capital.

Cooperative meetings would be a minimum one day session, once every quarter (3 months). ii. A quorum of 50% of members present is enough for meetings to commence. iii. Each group is expected to finance the transportation and feeding of its representative to the meeting.

8. Removal Of Officers/Vacation Of Positions

23

8.1 Grounds for Removali. A person elected under this Constitution to any of the officer position at the level of Cooperatives

shall be removed from office if she is found:a. To have acted in violation of the Oath of this Constitutionb. Upon death and relocation from community and Districtc. To be incapable of performing the functions of her office by reason of infirmity of body or

mind;d. To have conducted herself in a manner which brings or is likely to bring the office into

disrepute, ridicule or contempt; or is inimical to the interest of Network memberse. To have embezzled funds or recklessly handled finances of the Network; or to be inefficient

or negligent in the discharge of her duties

8.2 Further Provisions on Removal of Officersi. An officer who wishes to resign at the level of Cooperative needs to inform the group members and

the Cooperative President two weeks ahead. The group will need to re-nominate a member to the Cooperative. The Cooperative will re-elect a member from the house to fill the vacancy until the tenure of the one who resigned elapses.

ii. In case the Cooperative president intends to resign, she needs to give 4 weeks’ notice the Cooperative secretary and Network President. The secretary will assume her position until her tenure ends. The Cooperative then meets to elect a new secretary for the remaining period.

9. Amendmentsi. This constitution may be amended at any Cooperative meeting by two-thirds votes of members present,

provided that the amendment intention was stated in the Cooperatives’ last meeting.


Part III: Warehouse operations

25

BuYer ContraCtBetween the undersigned,

The first party,[Shea seller’s name, representative, and contact information]

and

The second party, [Shea buyer’s name, representative, and contact information]

the following has been discussed and agreed upon:

seCTIon 1. objeCTIve and duraTIon of ConTraCT

Article 1. ObjectiveThis contract concerns the production and sale of shea kernels. This contract defines the FOB (free on board)/port price, which is a duty-free price for kernels loaded on ships at the port. The contract also defines the methods of payment and the amount of shea kernels to sell.

Article 2. DurationThis contract is valid and accepted for the period of June 2014 to January 2015. The parties in question in this document may renew the contract through written documentation.

seCTIon 2. engagemenT of ParTIes

Article 3. Commitments of [Seller][Seller] commits to • Ensure, for the purchase by [the buyer], that the production and sale of shea kernels conform to quality standards. [The

seller] is contracted for the production and sale of 85 to 100 metric tons (+/- 5%);• This quantity must be available at the warehouses no later than 15 December 2014;• Respect the quality standards of shea kernel production, which include:

Minimum amount of fat = 48% Maximum level of humidity = 5,00 %Maximum level of acidity = 5,00 % ;

• Follow the protocols of traceability of production (coding the production of each shea collector, etc.)• Package clean and uniform merchandise in clean jute bags weighing 85kgs and load them in the trucks.• Ensure the delivery between the women’s warehouses and the buyer’s shipping containers at the port.

Article 4. Commitments of [buyer][The buyer] commits to• Ensure the purchase of the contractual quantity of shea kernels at a minimum price guaranteed of [XX currency/kg] (FOT

communities) payable to [Seller],o With a minimum price guaranteed paid to the shea collectors of [XX currency/kg] [(96.7% of price)]o With an amount allocated to [seller] of [XX currency/kg] to fund the support of [the seller] (costs of sales,

certification, etc.)• Pay, outside of the minimum price guaranteed, a quality premium to [the seller], according to the following conditions :

Level of acidity (%) Quality premium ([currency]/kg)

Between 0.00 and 1.00 exclusive 15Between 1.00 and 2.00 exclusive 10Between 2.00 and 3.00 exclusive 5Between 3.00 and 5.00 exclusive NoneMore than 5.00 Kernels not accepted

The level of acidity is measured when each batch is delivered at the warehouse of [the buyer] (1 batch = 1 load = 1 truck). The measurement will be carried out in [the buyer’s] laboratory. The results of the analyses will be shared no later than 72 hours after


the reception of the kernels in [the buyer’s] warehouse.

At the request of [the seller], the analysis the of the acidity level can be excecuted by an independent laboratory (maximum of three times throughout one season and at a maximum of 10 days after the reception of the batch). In this case, the process of the measurements shall be shared in full: the sampling (taken from the warehouse and deposited at the laboratory in the presence of both parties), payment of analysis (50% buyer, 50% seller), reception of results. In the case of a dispute, a third laboratory, which shall be independent and agreed upon, will be mutually chosen, and the process will be repeated.

• Ensure the entire payment of the quality premium at the end of the contract. The quality premium is calculated by adding the premiums (from each sample) of each batch delivered to [the buyer].

• Ensure the payment to [the seller] according to the following conditions:• Assurer le paiement à StarShea selon les modalités suivantes :

o 100% on the day of receiving the truck delivery

Article 5. Payment for shea kernelsThe payment of the FOT community prices of [XX currency/kg] will be made to [the seller], as indicated in Article 4, by check or bank wire. The bank details will be given in addition to this contract.

The payment will be executed based on the quantity delivered. Weighings, under the charge of [the buyer], will be done by a weighbridge at [location] and are verified by both parties. Both parties will agree to the weight measured by the weighbridge. The amount to pay is calculated based on net weight (net weight = weight from the weighbridge minus the weight of the bags. 1 bag = 1kg).

seCTIon 3. sPeCIfIC Clauses

Article 6. ModificationsThis contract can be modified or terminated by written mutual consentment.

Article 7. DisputesAll disputes related to the execution of the present agreement will be settled amicably. If a solution cannot be reached by the two parties, the dispute will be subject to the rules of [the country of operation]. The jurisdiction of commercial law in [country of operation] will be the final decision over all disputes over which the two parties are unable to compromise.

Article 8.This contract will be enforced starting on the date of its signature.

Made in two (2) original copies

Signed at_____________ on ______________

Read and approved Read and approvedFor [the seller] For [the buyer]

[Name] [Name][Title] [Title]

27

QuaLItY stanDarDsThe following information is part of the GSA industry quality standards. The full quality manual can be found on the GSA website.

IndusTry QualITy reQuIremenTs

Shea kernels (unshelled)Shea kernels shall have the appearance and color characteristics of the variety. They shall be clean and dark brownish in color with variations from different regions. They shall be dry and reasonably uniform in size. The kernels shall be free from insect infestation.

Shea kernels (shelled)Shea kernels shall be obtained by shelling the kernels, and they shall have the appearance and color characteristics of the variety and origin. They shall be clean and reasonably uniform in size. Shea kernels shall be safe and suitable for processing for human use and shall be free from rancid odors and moldiness. Shea kernels must be free from insect infestation.

Shea Kernel Quality Grading Parameters

Parameter # Parameter Grade A (1) Grade B (2) Grade C (3) Analysis Type

1 Moisture Content < 8% 8% - 10% >10% Moisture meter Filed testing

2 FFA < 3% 3% - 8% >8% Lab Testing

3 Impurities < 0.4% 0.4%- .5% >0.5% Weighing and Visual Inspection

4 Oil Content > 50% 47% - 50% <47% Lab Testing

Note: For a sample to qualify for a specific Grade, all the results of the tested parameters must be satisfied.

Moisture Content The moisture content of a sample shall be determined by a calibrated GSA accredited hand-held moisture meter capable of accuracy to a minimum ± 0.1% when greater than 2% moisture content is measured. For Grade A, the moisture content shall be less than 8%. The moisture content for Grade B shall be between 8% and 10% and for Grade C, it shall be more than 10%. Buyers, traders and producer groups should be encouraged to acquire moisture meters.

FFA The Free Fatty Acid (FFA) shall be analyzed using analytical methods at a Laboratory recognized by GSA. The FFA for Grade A shall be less than 3%. For Grade B, it shall be between 3% and 8% and for Grade C, it shall be more than 8%.

Impurities The impurities in a sample of shea kernels constitute all the foreign matter. The impurities can be assessed visually but for accurate results, a calibrated digital weighing machine approved by GSA should be used in the field. The machine should have an accuracy of ±0.05% of total sample weight. For Grade A, the impurities shall be less than 0.4%. The impurities for Grade B shall be between 0.4% and 0.5%. For Grade C, impurities shall be more than 0.5%.

Oil ContentThe oil content shall be analyzed at a laboratory recognized by GSA. The oil content for Grade A shall be more than 50% and that of Grade B shall be between 47% and 50%. For Grade C, the oil content shall be less than 47%.

shea Kernel ProCessIng and Trade

Kernel Collection The shea kernels shall be collected from under the trees as quickly as they drop. They shall not be allowed to remain on the ground for more than 3 days. Women must allow the fruit to drop on the ground before picking. Do not shake the tree or use sticks to plug fruits from the tree.

Par-boiling and drying kernelsThe harvested kernels shall be stored for periods not more than 7 days before par-boiling. Water shall be used for the par-


boiling and the time for par-boiling shall not exceed 40 minutes. Used water can be recycled for par-boiling. The boiled kernels may be dried in the sun for 1-3 days and must be protected from rain. They should be dried on a clean pavement or platform to avoid contamination.

Drying kernelsThe kernels should be cracked gently to avoid breaks. The kernels should be dried immediately after cracking. The recommended method is sun-drying on a pavement floor or on a raised platform for a minimum period of 5-7 days. The kernels must be protected from rain at all times.

Packaging and Labeling Jute sacks that are clean, sound, free from insects, sufficiently strong and properly sewn shall be used for packaging.

StorageThe kernels in jute sacks shall be stored above ground on pallets in a well-ventilated roofed room or a ventilated warehouse. The sacks should not be put on floors. There should be no pesticides, fertilizers, fuels or other harmful substances in storage room.

Training and Education GSA shall collaborate with members to develop training programs to educate women groups, warehouse operators, transporters and other shea value chain actors to employ best practices in the shea industry.

Incentives for High Grades For suppliers to receive premium price, high volumes of Grade A must be supplied to the buyers. Buyers will be able to pay premium or other incentives for Grade A if the volumes are large enough and acceptable by both parties. Poor quality below Grade C may be rejected by buyers.

samPlIng

A random sampling of kernels should be drawn to be tested for quality.

TesTIng

The samples drawn shall be tested for compliance with the requirements of each quality criteria, according to the appropriate methods of test.

29

saMPLe exPense anD ProFIt CaLCuLatIons For a Warehouse In Ghana

EXPENSES Unit Qty Cost (GHS) Total (GHS)

Labor

Manager Days 84 48.80 4,099

Secretary Bags 1,000 0.50 500

Security Month 12 200.00 2,400

Loading/Unloading Bags 1,000 0.70 700

Sewing Bags 1,000 0.30 300

Subtotal Labor 7,999

Financing

Working Capital GHS 50,000 1.00 50,000

Interest % 50,000 0.12 6,000

Subtotal Financing 56,000

Maintenance

Replacement Pallets # 5 40.00 200

Replacement Padlocks # 2 100.00 200

Replacement Scales # 1 333.33 333

Structural Repairs 1 3,000.00 3,000

Subtotal Maintenance 3,733

Supplies

Receipt Books, etc. 1 200.00 200

Subtotal Supplies 200

Transportation

Village Transport Subsidy Bags 1,000 3.00 3,000

Transport to Port Trip 1 10,000.00 10,000

Weight Loss during Transport % of price at port 0.01 110,000.00 1,100

Subtotal Transportation 14,100

Fees

Annual Group Dues Woman group member 450 5 2,250

Subtotal Fees 2,250

Total Expenses 84,283

REVENUES

Shea Kernel Sales Bags 1,000 110 110,000

PROFIT 25,717

ADDITIONAL PROFIT/BAG* 25.72

*Assumptions: Sale of 1,000 bags; pre-financing price of GHS 50/bag; sales price of 110 GHS/bag


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Name of Warehouse OwnerAddress, Telephone number

RECEIPT OF DEPOSIT Date: ......................................

Shea Kernel Deposit

Member Name: ...............................................................................

Member #: ...............................................................................

Weight in Kilos: ...............................................................................

Price: ........................................................................

Signature: ...............................................................................

Receipt no: ......................

saMPLe reCeIPt sLIP

Global shea alliance secretariat, PMB 35a, osu, accra, Ghana

facebook.com/globalsheaalliance@globalshea www.globalshea.com

version 1 warehouse management manual · constitution/ bylaws ... this model is attractive because...

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