to deliver the crop to industrialists. These conflicts involving financing translate into inadequate supply of inputs to farmers, resulting in lower yields, and the cycle of underperformance continues into the next season.<sup>11</sup> Given the intractable difficulties of the peanut sector, SUNEOR had increasingly relied on the other side of its business, importing and refining soybean oil. Until recently, SUNEOR maintained a _de facto_ monopsony on legal imports of unrefined vegetable oil given its dominant market share and protections accorded by the government. SUNEOR faces competition from imported palm oil from Côte d’Ivoire, a member of WAEMU, and South-East Asia. Palm oil is generally less expensive than soybean oil on world markets (see Figure 1b). Refined vegetable oils are subject to the maximum customs duty rate of 20 percent, but given its origination in WAEMU, Ivoirian palm oil should enter duty free, although still subject to VAT. Unrefined soybean oil enters at a lower customs duty rate of 10 percent.

The Senegalese government implemented a succession of special import taxes between 2002 and 2008 to protect SONACOS/SUNEOR against competing imports of refined vegetable oils, particularly palm oil:

- 2002-2005.  TCI of 10 percent.

- 2002-2008.  Specific tax of 12 percent.

- 2006-2007.  Safeguard tax of 25 percent.

In 2010, the government instituted an import ban on oil containing more than 30 percent saturated fats, aiming at palm oil from Côte d’Ivoire and Asia, under the guise that these oils pose health risks due to high saturated fats. Ivoirian exporters were also accused of transshipping Asian palm oil. UNACOIS traders mounted a counter-campaign, sponsoring a public forum with two nutritional experts who debunked the claims that palm oil adversely affects consumers’ health.<sup>12</sup> The WAEMU commission ruled that this measure contravened the regional custom union, which forced the Senegalese government to retract the measure in late 2010.

Table 2 shows the actual and effective tax rates on imports of palm oil, similar to Table 1, taking into consideration any discrepancies between customs pricing, as measured by import unit values, and world prices, similarly to the case of sugar above. The implicit tax rate calculated with the reported customs values of imported palm oil is considerably lower than for sugar, and customs unit values are much closer to world prices than for sugar, although still somewhat variable and always above world price. An additional noteworthy aspect here as for the other goods is the variation over time in applied tax rates for both customs duties and VAT rates. Actual _ex post_ tax rates (tax revenues divided by customs values) increase sharply in 2003-2006 and drop in 2007, which does not fully correspond to legislated changes in tax rates. This suggests substantial discretionary action by the government in application of tax rates and/or values. Adjusting tax rates to reflect the discrepancy between customs unit values and world prices, as described for sugar above, pushes up the tax rates, although to a lesser extent than for sugar. The adjusted tax rate using

> 11 See “Quand L’Arachide Sénégalaise Retrouve un Second Souffle,” _Leral.net_ , November 25, 2012.

> 12 “La Guerre des Huiles Bat Son Plein,” _Jeune Afrique_ , January 5, 2010

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