Institutional Environment and Technical Efficiency: A Stochastic Frontier Analysis of Cotton Producers in West Africa

Abstract

This paper examines the effects of the institutional environment on West African cotton farmers' technical efficiency (TE). First, key aspects of the cotton sector institutional environment are discussed, including input and credit access, and producers' organisations. Then, a stochastic frontier production function, which incorporates technical inefficiency effects, is applied to farm level data collected in Benin, Burkina Faso and Mali. The survey includes farmers' evaluations of the cotton sector institutional environment. Results suggest that institutional level features influence producers' TE, besides farm-level characteristics. Cotton growers who report a negative experience with the joint liability programme, who identify the cotton price mechanism or access to credit as the main constraints to performance, and who cultivate more hectares of cereals are technically more inefficient in producing cotton. Findings suggest that cotton farmers in Mali are less technically efficient in producing cotton than in Burkina Faso and Benin. Agricultural development policies focusing on reducing farmers' financial stress, particularly through the establishment of adequate price mechanisms (i.e. higher farm-gate prices and timely payments to farmers) and improvement in the input-credit markets should be encouraged to improve TE in West Africa.

Vertical integration in West Africa's cotton industry: are parastatals a second best solution?

“…Growers differ in farm size, income sources, resource endowment, and management abilities. For cotton production among the West Africa's C‐4, field studies indicate that some growers consistently perform better than the average while others consistently perform worse (Theriault, ). Hence by setting a single price, cotton parastatals over subsidize some producers and under subsidize others implying that the vertical integration parastatal market structure is less efficient than a free market.…”

“…This theoretical argument is supported by empirical studies. For instance, a survey of cotton producers in Burkina Faso, Mali, and Benin found that farmers with access to inputs from cotton parastatals were more productive than farmers without access to inputs (Theriault, ).…”

“…In SSA, research approximating technical coefficients is scarce. Using surveys, Theriault () measured input productivity in the West African cotton sector and found purchased inputs (seeds, fertilizers, pesticides, and insecticides) elasticity to be ∼0.7 in Burkina Faso, and ∼0.57 in Benin. Theriault () considers purchased inputs as a composite package.…”

“…In Burkina Faso, three gins operate as oligopsonies over geographical areas, and in Mali, CMDT is still the only gin. In Benin, while private gins emerged in the mid‐1990s, SONAPRA the state enterprise became partially privatized in 2008 when SODECO acquired a 33.5% stake (Theriault, ).…”

Inefficiency of manual weeding in rainfed rice systems affected by parasitic weeds

“…(), Singbo and Oude Lansink (), Kokoye et al. (), Theriault and Serra (), Ayenew et al. (), Pede et al.…”