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

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. Veronique Theriault is in the Department of Agricultural, Food and Resource Economics, Michigan State University, 446 W. Circle Dr., Rm. 213-B, East Lansing, MI 48824, USA. E-mail: [email protected] for correspondence. Renata Serra is in the Center for African Studies, 421 Grinter Hall, PO Box 115560, University of Florida, Gainesville, FL 32611, USA. The authors are grateful to Bourema Kone (IER, Mali), Borgui Yerima (LARES, Benin), Yiribin Bambio (University of Ouagadougou, Burkina Faso), and Jonathan Kaminski for having coordinated fieldwork in the three countries. We also wish to thank the Editor and two anonymous referees for their helpful suggestions on earlier versions of this article. The data were collected as part of the Cotton Sector Reform Project within the wider Africa, Power and Politics Programme. Funding from DfID, Irish Aid, and FQRSC is gratefully acknowledged. Journal of Agricultural Economics doi: 10.1111/1477-9552.12049 2014 The Agricultural Economics Society