2014
DOI: 10.1111/agec.12135
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Vertical integration in West Africa's cotton industry: are parastatals a second best solution?

Abstract: This article provides a framework to compare market outcomes among vertically integrated monopsonies in the cotton sector of West Africa and alternative, more competitive market structures. Based on a principal agent framework, in the presence of factor market constraints, as well as capital market failure, efficiently operated cotton parastatals increase sector welfare and efficiency by providing input credits. In equilibrium, outcomes with the principal agent model suggest growers receive the reservation inc… Show more

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Cited by 5 publications
(7 citation statements)
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References 29 publications
(53 reference statements)
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“…Cotton was introduced in Burkina Faso in the 20th century [14]. Over time, Burkina Faso's cotton sector has seen lots of changes, among them the liberalization of the sector [15] as well as the creation of a special research program dedicated to the improvement of cotton production. Furthermore, in 1998, the National Union of Cotton Producers (UNPCB) was established in order to give farmers a voice in decision making.…”
Section: Introductionmentioning
confidence: 99%
“…Cotton was introduced in Burkina Faso in the 20th century [14]. Over time, Burkina Faso's cotton sector has seen lots of changes, among them the liberalization of the sector [15] as well as the creation of a special research program dedicated to the improvement of cotton production. Furthermore, in 1998, the National Union of Cotton Producers (UNPCB) was established in order to give farmers a voice in decision making.…”
Section: Introductionmentioning
confidence: 99%
“…Of these, Sofitex is the largest, covering more than 85% of the land cultivated with cotton and representing about 80% of the national cotton production [31]. At the village level, cotton producers are organized in producer groups or GPC (Groupement des Producteurs de Coton) and the cotton companies provide inputs, such as seeds, pesticides, fertilizers, and technical advice, to GPC, who later sell their cotton to the company at a guaranteed price [33][34][35]. In this system, it is the cotton company that decides which variety farmers grow.…”
Section: Cotton Cultivation and Agricultural Biotechnology In Burkinamentioning
confidence: 99%
“…The "old cotton basin", an area situated in the Sudanian agro-ecological zone (Coulibaly, 2003), groups the districts of Koutiala and Dioila and the northern part of the Sikasso district and comprises more than a million of rural people (Traore et al, 2011). This area is characterized by cotton/cereal rotation with use of manure and mineral fertiliser, draught power by oxen, credit for inputs and guaranteed purchase of cotton by the CMDT (Soumaré et al, 2008;Tumusiime et al, 2014). With a biophysical and socio-economic environment similar to the nine study villages, the guidelines generated could be applied throughout this "old cotton basin".…”
Section: Opportunities For Scaling-outmentioning
confidence: 99%