Impact Of Agricultural Market Reforms On Smallholder Farmers In ...

CHAPTER 2: POLICY BACKGROUND FOR BENIN
2.1 Introduction
Since the 1980s, Benin, like many other African countries, has begun a series of reforms designed
to introduce a new dynamism into its economy. Tentative initially and limited to the agricultural
sector, these reforms grew to constitute the principle development strategy of the country starting in
August 1989 when the first Structural Adjustment Program (PAS) was negotiated with the
international financial institutions. Benin is currently implementing the third PAS. The main
objective of these reforms has been to restart the economy by adopting market-oriented policies in
which the private sector plays a central role. The results of these reforms have been quite
satisfactory from a macroeconomic point of view:
The growth rate of the economy has increased from –3 percent in 1989 to 5.7 percent in 1997.
The rate of inflation has fallen from 54 percent in 1994 after the devaluation of the CFA franc
to around 5 percent in 1996.
The financial sector has recovered from the collapse of the state-owned banks in 1988-89.
The social impact of the reforms remain a cause for concern and a threat to their political
sustainability. Unemployment and poverty remain stubbornly high, and there is a widespread
perception that the reforms have adversely affected the lives of the poor in Benin. Although macroeconomic
data are available on the impact of the reform on gross domestic product, investment, and
international trade, less information is available on their impact at the household level, particularly
their impact on poor and vulnerable groups in society. Since agricultural households represent
some 60 percent of the population of Benin and contain a disproportionate number of the poor, an
understanding of the impact of the reforms on farmers is a key component of any overall evaluation
of the reforms.
This report is based on research funded by BMZ under the name “Impact of Reforms on Small
Farmers in Benin and Malawi.” The study was carried out by the International Food Policy
Research Institute (IFPRI) in collaboration with the researchers from the University of Hohenheim,
Oxford University, Purdue University, and research organizations in each country. In Benin, IFPRI
collaborated closely with researchers with the Laboratoire d’Analyse Regional et d’Expertise
Sociale (LARES), which implemented the surveys and participated in the analysis of the results.
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