Date of this Version
Purdue University, Ph.D. dissertation, December 2011.
This dissertation investigates income diversification alternatives from the cotton economy and compares those initiatives with present policy measures to restore the cotton sector in Mali. It also derives the welfare implications for women of these various policy measures.
During the decade preceding 2011, farmers’ incomes in the cotton zone of Mali have been significantly affected by the downturn of the cotton economy explained by many factors including the low farm gate cotton price, the declining cotton yields and soil fertility concerns. In 2011, the Malian government substantially increased the farm gate cotton price as a result of the world cotton price hikes and to stimulate a revival of the domestic cotton industry. Also for the main crops, farmers had access to a 24 percent fertilizer subsidy relatively to the market price as the government wants to intensify agricultural production by improving soil fertility levels and raising crop yields.
With a farm household model that allows producers to make decisions at several points in time, we evaluated farmers’ response to the government cotton pricing policy and compared the income effect resulting from this latter policy with the adoption of improved agricultural sorghum technologies plus marketing strategies. Then, we further simulated the effects of the elimination of the fertilizer subsidy and the predicted reduction in cotton farm gate price by 8 percent because the economic conditions of 2011 are expected to be temporary. The welfare implications on women of these various policies were lastly derived.
Results showed that the substantial increase in cotton prices and access to fertilizer subsidy are very effective policies that will substantially boost the expansion of cotton area and farmers’ incomes. Maize will also benefit significantly from the increase in cotton farm gate price. With the availability of the improved sorghum technologies and marketing strategies, farmers’ incomes are further enhanced by 21 percent leading to more income diversification. The expected 8 percent decline in the cotton price will essentially be detrimental to cotton production as farmers will divert cotton land and fertilizer use to sorghum. Moreover, the removal of the fertilizer subsidy will seriously constrain intensive crop production and result in a sizable reduction in household wealth by 21 percent but diversification into sorghum will become an important part of the crop mix.
Overall, the most profitable economic opportunity for the household is not the most beneficial for women. Women are made better off with the adoption of less labor intensive technologies on the communal plot. So, there is need to focus more on women’s specific welfare enhancing policies including access to better lands and inputs, reduction of their labor requirements in agriculture and household activities.