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Increasing incomes of Malian cotton farmers: Is elimination of US subsidies the only solution?

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  • Baquedano, Felix G.
  • Sanders, John H.
  • Vitale, Jeffrey
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    Abstract

    In a WTO battle and the press the argument is often made that eliminating US cotton subsidies would have a large effect on the incomes and competitive position of farmers in developing countries. In Francophone West Africa cotton productivity has stagnated after rapid gains in the first two decades following independence (1960-1980). A farm model was constructed based on farmers' definition of their decision-making framework which they use to respond to income and weather risks. With this model the effects on farmers of eliminating US subsidies are compared with various productivity increasing measures for cotton and sorghum in Dioila, Mali. Dioila is located in a representative cotton region producing 16% of the cotton in Mali. We include sorghum due to its importance for consumption and the observation of Malian farmers substituting cereals (sorghum and maize) for cotton as the returns to cotton have fallen in the 21st Century. In the farm model, the elasticity of transmission of a change in the world cotton price to the farm gate price is taken into account. The gains from eliminating US subsides are small. In contrast, the various technological alternatives including Bt cotton introduction, the use of higher fertilization levels for cotton, and the introduction of improved sorghum cultivars and moderate fertilization along with a marketing package all have substantially higher returns Even with substantial improvement in the mechanisms enabling farmers to benefit from the higher prices resulting from elimination of US subsidies, there are still much higher returns resulting from the various types of productivity increases.

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    Bibliographic Info

    Article provided by Elsevier in its journal Agricultural Systems.

    Volume (Year): 103 (2010)
    Issue (Month): 7 (September)
    Pages: 418-432

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    Handle: RePEc:eee:agisys:v:103:y:2010:i:7:p:418-432

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    Web page: http://www.elsevier.com/locate/agsy

    Related research

    Keywords: US cotton subsidies Bt cotton Improved sorghum technology and marketing Mali;

    References

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. Felix G. Baquedano & John H. Sanders, 2006. "Introducing inventory credit into Nigerien agriculture: improving technology diffusion," Agricultural Finance Review, Emerald Group Publishing, vol. 66(2), pages 297-314, September.
    2. Baffes, John, 2007. "Distortions to Cotton Sector Incentives in West and Central Africa," Agricultural Distortions Working Paper 48526, World Bank.
    3. Louis M. Goreux & Paul R. Masson & Dhaneshwar Ghura & Ousmane Badiane, 2002. "Cotton Sector Strategies in West and Central Africa," IMF Working Papers 02/173, International Monetary Fund.
    4. Kym Anderson & Ernesto Valenzuela, 2007. "WTOÂ’s Doha Cotton Initiative: A Tale of Two Issues," Centre for International Economic Studies Working Papers 2007-06, University of Adelaide, Centre for International Economic Studies.
    5. Jeffrey D. Vitale & John H. Sanders, 2005. "New markets and technological change for the traditional cereals in semiarid sub-Saharan Africa: the Malian case," Agricultural Economics, International Association of Agricultural Economists, vol. 32(2), pages 111-129, 03.
    6. Abdoulaye, Tahirou & Sanders, John H., 2006. "New technologies, marketing strategies and public policy for traditional food crops: Millet in Niger," Agricultural Systems, Elsevier, vol. 90(1-3), pages 272-292, October.
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    Cited by:
    1. Gouzaye, Amadou & Vitale, Jeffrey D. & Epplin, Francis M. & Adam, Brian D. & Stoecker, Arthur L., 2013. "The Value of Price Stabilization Policy for Cotton Producers in Burkina Faso," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 142882, Southern Agricultural Economics Association.

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