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

Cotton area per GV ranges from 145 ha in the south to almost 500 ha in Borgou, the national
average being 384. Similarly, each GV produces an average of 360 tons of seed cotton, with GVs
in Borgou and Atacora being larger than those in Zou and the southern departments. The revenue
from cotton sales averages 74 million FCFA (see Table 4.3.27).
The higher cotton production in the north is due to both greater numbers of cotton farmers and
larger cotton areas on each farm. In Borgou, the average GV has 1.5 hectares of cotton per
member, roughly twice the average area among GVs in the south (see Table 4.3.28).
Provision of credit
One of the most important functions of the GVs is to channel credit to farmers for the
purchase of inputs and to facilitate loan recovery. According to the GV survey, 98 percent of the
GVs provide inputs on credit to members. In addition, some GVs also provide loans in cash to
members. Overall, 72 percent of GVs offer cash credit, with the percentage being highest in
Atacora (94 percent) and Borgou (88 percent) (see Table 4.3.29).
No interest is charged to members for this credit, although presumably the interest costs are built
into the cotton and input prices. Unlike in-kind input credit, cash credit carries an interest charge,
typically around 12 percent per year (see Table 4.3.30).
Given the annual fluctuation in the level of credit provided to farmers, the survey asked for the
maximum credit level over the previous year. The maximum input credit over the year averaged 25
million FCFA per GV. At the time of the survey, however, the amount of outstanding input credit
was just 100 thousand FCFA per year. With regard to cash credit, highest value of this debt over
the year was considerably less than the in-kind input credit (5 million FCFA per GV) but the
current debt was higher (283 thousand FCFA) (see Tables 4.3.31 and 4.3.32).
In order to provide credit, GVs obtain loans from various sources. The in-kind credit provided to
members in the form of inputs is based on in-kind credit provided to the GVs from SONAPRA.
Cash loans to members are based on loans obtained from banks, non- governmental organizations
(NGOs), and other institutions. For example, 72 percent of the GVs offer cash credit to members
and 71 percent obtained credit from other sources (see Table 4.3.33). Most of this comes from
banks at interest rates of around 17 percent. Although NGOs offer lower interest rates, the
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