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

particularly urban wage-earners. On the other hand, crop prices also increased substantially. Maize
prices increased 58-75 percent in three major markets: Cotonou, Parakou, and Malanville (see
Table 2.1). The price of local rice increased 80-100 percent, responding to the higher cost of
imported rice. The prices of other food crops also increased, though to a lesser extent. In Parakou,
the price of manioc flour increased 44 percent and that of white sorghum 20 percent over 1993-95.
In general, real foodcrop prices are greater than or equal to the 1990 levels (see Table 2.2).
Following the devaluation, the government-determined price of inputs roughly doubled
immediately. For example, fertilizer prices rose from 95 FCFA/kg in 1993 to 190 FCFA/kg in
1994. The official price of cotton also doubled, but only after several years. The price per
kilogram rose from 103 FCFA in 1993 to 135 FCFA in 1994, 160 FCFA in 1995, 200 FCFA in
1996, and 225 FCFA in 1997.
Agricultural production Agricultural production has grown at a healthy rate since 1990.
As shown in Table 2.3, the most dramatic increase has been in rice, which has as grown 14.6
percent per year since 1990. Almost all of this growth has occurred since the 1994 devaluation.
Since over three-quarters of Benin’s rice is imported, the domestic price is largely determined by
world prices and the exchange rate. Thus, the 1994 devaluation stimulated domestic production by
making imported rice more expensive. Cotton production grew almost as quickly: almost 11
percent per year. Cotton output has been stimulated by both improved management of the cotton
system and higher prices linked to the devaluation. Manioc output has more than doubled since
1990, equivalent to a 9.2 percent growth rate. This growth has been in response to increasing
commercialization and cross-border exports. Maize, sorghum, yams, and groundnuts have all
grown at 4-6 percent per year.
Table 2.4 provides some rough calculations of the gross revenue at the farm-level from cotton. The
figures are approximate because they do not take into consideration quality premia and bonuses that
affect farm revenue. Furthermore, as gross figures, they do not incorporate the cost of growing
cotton, nor the loss in income from other crops as farmers switched to cotton. The figures suggest,
nonetheless, that the cotton boom has had a significant impact on farm income. The real value of
gross cotton revenue increased from around 50 billion FCFA in 1993 and 1994 to 100 billion FCFA
in 1996 before declining to 80 billion FCFA. This implies an additional gross income of 30 billion
FCFA between 1993 and 1998, equivalent to 63 thousand FCFA per farm household in Benin
(including cotton farmers and others).
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