Impact Of Agricultural Market Reforms On Smallholder Farmers In ...
Impact Of Agricultural Market Reforms On Smallholder Farmers In ... Impact Of Agricultural Market Reforms On Smallholder Farmers In ...
department. The farms with very little marketed surplus showed the same approval ratings as those marketing a large share of their output. Farm size is only weakly related to household well-being. Several factors help explain this surprising result. First, small farmers depend more on non-farm income, diluting the effect of farm size. Second, small farmers are more likely to grow crops with high revenue per hectare, such as vegetables or piment. Third, small farmers in Benin are more likely to have two seasons of production, so that differences in sown area across farms are smaller than differences in farm size. And finally, household size is correlated with farm size, so that large farms generally have more “mouths to feed”. Farmers in Benin, even small farmers, produce largely for the market. Almost two-thirds of the value of crop production is marketed. Even small farms and poor household sell, on average, over half of their output. This means that agricultural prices matter to all farm households, and trends in agricultural prices should be closely monitored by the government and any other organization concerned about rural poverty. 6.3 Policy implications for Benin Continue efforts to expand competition and private-sector participation in agriculture. National statistics indicate that economic reforms undertaken over the last decade have restored fiscal balance, low inflation, solid economic growth, and expansion in agricultural production, but questions have been raised about their impact on poor and vulnerable households. The results of the IFPRI-LARES Small Farmer Survey reveal that agricultural households, who make up the bulk of the population and the overwhelming majority of the poor, have a positive assessment of the changes in their well-being. Just 12 percent of the rural households feel worse off than in 1992 for reasons related to the economy. Increase competition in cotton marketing. Competition could be increased at three levels: export marketing, cotton ginning, and farm-level collection. At the first level, SONAPRA could allow cotton gins and trading companies to export cotton lint directly. At the second level, SONAPRA could allocate seed cotton to gins by auction. This may result in the closure of the least efficient cotton gins, but the current system keeps all the gins only by “subsidizing” them through lower seed cotton prices for farmers. The third level is the most difficult because the SONAPRA monopoly on cotton collection facilitates recovery of input credit. Farm-level collection should only be liberalized if institutions are created to ensure recovery of input credit and thus the sustainability of the credit system. 335
Address problems of corruption in weighing and grading of cotton. The GV survey reveals that many participants in the cotton system have lost confidence in the impartiality of the systems for weighing and grading cotton. Whether or not the problem is widespread, the perception of unfairness undermines the incentives of farmers to produce higher quality cotton. One strategy would be to increase the anonymity and the distance between inspectors and sellers, making it more difficult for sellers to reward higher grades and weights. Another would be to introduce an independent verification service that would make random checks of the quality and quantity of batches of cotton. Make input marketing more competitive by eliminating discriminatory import tax treatment. Private-sector participation in the distribution of fertilizers is inhibited by the higher import duty on fertilizer imported outside the SONAPRA cotton system. There is no reason to favor fertilization of cotton over fertilization of other crops, particularly since the survey reveals that one-quarter of the fertilizer passing through the SONAPRA cotton system is actually used on other crops. One option would be to eliminate the import duty on all fertilizer. If the government feels it cannot lose this revenue, then a small import duty, say 2-3 percent, on all fertilizer imports would generate the same revenue as the current system. An additional advantage would be that prices outside the cotton system would provide a means of testing the efficiency of the SONAPRA input delivery system. Change the rules for SONAPRA input delivery to make it more competitive. SONAPRA could make its system of input delivery more competitive by allowing prices to vary by region and having the importer-distributors compete to provide inputs for each sous-prefecture or department. Under this system, importer-distributors would be paid according to their winning bid price, rather than according to the national price set by SONAPRA. Facilitate the “diversion” of inputs provided by SONAPRA to crops other than cotton. In the past, SONAPRA has discouraged the use of inputs delivered via the GVs on crops other than cotton. SONAPRA should, instead, encourage the use of fertilizer and pesticides on other crops by allowing farmers to buy more inputs that they need for their cotton production. The upper limit on the sale of inputs on credit to each farmer should be determined by the ability of the farmer to repay the input credit with cotton sales rather than the amount of inputs needed based on cotton area. If the discriminatory treatment of inputs were eliminated, neither SONAPRA nor the government would feel that farmers were abusing the terms of their duty-free status. 336
- Page 292 and 293: Table 5.17 - Sources of fertilizer
- Page 294 and 295: Table 5.22 - Access and use of cred
- Page 296 and 297: Table 5.25 - Percent of households
- Page 298 and 299: Table 5.29 - Percent of households
- Page 300 and 301: Table 5.34 - Crop disposal by type
- Page 302 and 303: Table 5.38 - Determinants of Market
- Page 304 and 305: Table 5.42 - Summary of expenditure
- Page 306 and 307: Table 5.45 - Food consumption by so
- Page 308 and 309: Table 5.47 - Percent of households
- Page 310 and 311: Table 5.49 - Percent of households
- Page 312 and 313: Table 5.51 - Food consumption by ex
- Page 314 and 315: Table 5.56 - Determinants of per ca
- Page 316 and 317: Table 5.59 Percent of households ow
- Page 318 and 319: Table 5.62 - Characteristics of the
- Page 320 and 321: Table 5.68 - Determinants of percei
- Page 322 and 323: Table 5.71 - Average yields per cro
- Page 324 and 325: Table 5.77 - Changes in the availab
- Page 326 and 327: Figure 5.1 Distribution of househol
- Page 328 and 329: Figure 5.7 - Percentage of Househol
- Page 330 and 331: CHAPTER 6 - SUMMARY, CONCLUSIONS AN
- Page 332 and 333: Fertilizer Half of the far
- Page 334 and 335: Regression analysis indicates that
- Page 336 and 337: Among those seeing improvement, the
- Page 338 and 339: Agricultural markets Three quart
- Page 340 and 341: The economic reforms have boosted p
- Page 344 and 345: Strengthen the extension service by
- Page 346 and 347: The most time-consuming agricultura
- Page 348 and 349: Most common means of transport to t
- Page 350 and 351: Small farmers in Malawi are mainly
- Page 352 and 353: households have less assets and les
- Page 354 and 355: Place more serious efforts to impro
- Page 356 and 357: REFERENCES Ahoyo Adjovi, N.R. and F
Address problems of corruption in weighing and grading of cotton. The GV survey reveals<br />
that many participants in the cotton system have lost confidence in the impartiality of the systems for<br />
weighing and grading cotton. Whether or not the problem is widespread, the perception of unfairness<br />
undermines the incentives of farmers to produce higher quality cotton. <strong>On</strong>e strategy would be to increase<br />
the anonymity and the distance between inspectors and sellers, making it more difficult for sellers to<br />
reward higher grades and weights. Another would be to introduce an independent verification service that<br />
would make random checks of the quality and quantity of batches of cotton.<br />
Make input marketing more competitive by eliminating discriminatory import tax<br />
treatment. Private-sector participation in the distribution of fertilizers is inhibited by the higher import<br />
duty on fertilizer imported outside the SONAPRA cotton system. There is no reason to favor fertilization<br />
of cotton over fertilization of other crops, particularly since the survey reveals that one-quarter of the<br />
fertilizer passing through the SONAPRA cotton system is actually used on other crops. <strong>On</strong>e option<br />
would be to eliminate the import duty on all fertilizer. If the government feels it cannot lose this revenue,<br />
then a small import duty, say 2-3 percent, on all fertilizer imports would generate the same revenue as the<br />
current system. An additional advantage would be that prices outside the cotton system would provide a<br />
means of testing the efficiency of the SONAPRA input delivery system.<br />
Change the rules for SONAPRA input delivery to make it more competitive. SONAPRA<br />
could make its system of input delivery more competitive by allowing prices to vary by region and having<br />
the importer-distributors compete to provide inputs for each sous-prefecture or department. Under this<br />
system, importer-distributors would be paid according to their winning bid price, rather than according to<br />
the national price set by SONAPRA.<br />
Facilitate the “diversion” of inputs provided by SONAPRA to crops other than cotton. <strong>In</strong><br />
the past, SONAPRA has discouraged the use of inputs delivered via the GVs on crops other than cotton.<br />
SONAPRA should, instead, encourage the use of fertilizer and pesticides on other crops by allowing<br />
farmers to buy more inputs that they need for their cotton production. The upper limit on the sale of<br />
inputs on credit to each farmer should be determined by the ability of the farmer to repay the input credit<br />
with cotton sales rather than the amount of inputs needed based on cotton area. If the discriminatory<br />
treatment of inputs were eliminated, neither SONAPRA nor the government would feel that farmers were<br />
abusing the terms of their duty-free status.<br />
336
Change language