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The Role of Institutional Environments on Technical Efficiency: A Comparative Stochastic Frontier Analysis of Cotton Farmers in Benin, Burkina Faso, and Mali

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  • Theriault, Veronique

Abstract

This paper examines the role of institutional environments on cotton farmer technical efficiency scores in Benin, Burkina Faso, and Mali using a stochastic frontier production approach. First, the key institutional changes that have occurred with the recent market-oriented reforms are discussed. Then, farm efficiency per country is measured using cross-sectional data collected by the Cotton Sector Reform Project of the Africa, Power, and Politics Programme in 2009. Results from a one-stage estimation procedure suggest that while no technical inefficiency exists in Benin, an average technical efficiency of 69% and 46% is found in Burkina Faso and Mali, respectively. Agricultural development policies focusing on reducing the inefficiency at the farm level in Mali and Burkina Faso should be adopted; whereas policies designed to shift outward the production frontier seem more appropriate in Benin. Interestingly, institutional environment factors explaining variations in efficiency scores differ across countries. In Mali, farms that are food secure and that cultivate more hectares of cereals are more technically efficient in producing cotton. In contrast, Burkinabe farmers who are dissatisfied with the management of their producer organizations are more technically efficient. To be successful, efforts to promote efficiency would have to work in concert with the local realities in each country.

Suggested Citation

  • Theriault, Veronique, 2011. "The Role of Institutional Environments on Technical Efficiency: A Comparative Stochastic Frontier Analysis of Cotton Farmers in Benin, Burkina Faso, and Mali," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103436, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea11:103436
    DOI: 10.22004/ag.econ.103436
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    1. Kelly, Valerie A. & Boughton, Duncan & Magen, Benjamin B., 2011. "Pathways to Improved Profitability and Sustainability of Cotton Cultivation at Farm Level in Africa: an Approach to Addressing Critical Knowledge Gaps," Food Security International Development Working Papers 101163, Michigan State University, Department of Agricultural, Food, and Resource Economics.
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    3. Badiane, Ousmane & Ghura, Dhaneshwar & Goreux, Louis & Masson, Paul, 2002. "Cotton sector strategies in West and Central Africa," Policy Research Working Paper Series 2867, The World Bank.
    4. Kaminski, Jonathan & Serra, Renata, 2011. "Endogenous Economic Reforms and Local Realities: Cotton policy-making in Burkina Faso," Discussion Papers 116227, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
    5. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    6. Jayne, T S, 1994. "Do High Food Marketing Costs Constrain Cash Crop Production? Evidence from Zimbabwe," Economic Development and Cultural Change, University of Chicago Press, vol. 42(2), pages 387-402, January.
    7. Kumbhakar,Subal C. & Lovell,C. A. Knox, 2003. "Stochastic Frontier Analysis," Cambridge Books, Cambridge University Press, number 9780521666633, June.
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    Cited by:

    1. Emmanuel Tumusiime & B. Wade Brorsen & Jeffrey D. Vitale, 2014. "Vertical integration in West Africa's cotton industry: are parastatals a second best solution?," Agricultural Economics, International Association of Agricultural Economists, vol. 45(S1), pages 129-143, November.

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