Institutional Changes and Market Reforms in West African Cotton Sectors: a Case Study of Farmer Performance

Using cross-sectional survey data collected under the Cotton Sector Reform Project, of the Africa, Power, and Politics Programme during summer 2009 in Benin, Burkina Faso, and Mali, this research aims to: 1) expand the literature on cotton reforms and efficiency by discussing the main institutional changes that have occurred with the recent market-oriented reforms, 2) and quantitatively estimate and compare the technical efficiency scores of cotton farmers in these three West African countries using a stochastic frontier production function. A one-stage estimation procedure is used to examine the influence of the institutional environments on farmer technical inefficiency. Maximum likelihood results suggest that while no technical inefficiency exists among Beninese farmers, Burkinabe farmers are technically efficient at 69% compared to 46% for the Malian farmers. Interestingly, institutional environment factors explaining variations in efficiency scores differ across Burkina Faso and Mali. Cotton farms that are food self-sufficient and that cultivate larger area of cereal crops appear to be more efficient in Mali. Although cereal and cotton crops are competing for land and chemical input allocation, their relations with other productive factors, such as labor and equipment, have important complementary dimensions. Malian farmers, who express confidence that the reforms will improve the cotton sector, are technically less efficient. They may have fewer resources and, thus, hope that more support will be provided with the reforms to facilitate access to equipment and inputs. Burkinabe farmers, who are dissatisfied with the management of their producer organizations, are more efficient. Therefore, changes in the norms governing them should be considered to achieve better performance. 1 The author will like to sincerely thank the many people met through the Cotton Sector Reform Project of the Africa, Power, and Politics Programme. This work would not have been possible without the guidance of Dr Renata Serra and her team’s collaboration. I also thank Dr James A. Sterns for his valuable comments