The economics of conventional and organic cotton production in Benin

An increasing number of studies highlight the gravity of occupational health issues related to pesticide use in the cotton sector. As the first study of its kind, we demonstrate how pesticide use affects the economics of cotton production in Benin.

The assessment was undertaken in the municipality of Banikoara - known as the capital of 'White Gold' - under the Economics of Land Degradation Initiaitive and in collaboration with GIZ Benin and the Ministry of Agriculture in Benin.

With reference to the 2015/2016 cotton season, we find that:

  • Health problems and loss of livestock inflict economic damages in the order of EUR 187 per farming household per year. Health costs vary significantly depending on the spraying equipment used by farmers.
  • Government subsidies for farm inputs involve costs to the treasury. Accounting for governmental expenditures, environmental and health costs, the societal net-benefit from cotton production is reduced by 66 % for an average sized farm (5 ha).
  • Shifting to organic cotton production involves a high learning curve for farmers, but it is a promising technology. On average, organic farmers have revenues that are similar to that of conventional cotton farmers, but input costs are only a fraction of the size.
  • The resulting income was in the order of EUR 245 per ha for an average organic farmer and EUR 134 per ha for an average conventional cotton farmer for the 2015/2016 season. In the absence of subsidies for farm inputs, income from conventional cotton production would have been as low as EUR 77 per ha.
  • Conventional farmers spend non-optimal amounts on pesticides and urea. Their high expenditures are not offset by sufficiently high rises in yields. Farmers could earn higher incomes, by reducing expenditures on inputs.
  • Access to agricultural insurance schemes would facilitate that by lowering farmers’ propensity to hedge against risk through unabated spending on inputs.
  • To effectively confront challenges of health and climate hazards, more radical changes are needed. Sustainable land management (SLM) practices such as no-till, permanent soil cover, crop rotations, etc. can build climate resilience. Organic farmers typically employ these practices.
  • However, with insufficient access to finance, farm inputs and extension services for other crop or SLM techniques, farmers are hindered from adopting or scaling-up theirSustainable Land Management efforts. Indeed, conventional cotton farmers are ‘discouraged’ from switching technology by the simple fact, that there is no government support and access to credit for any other crop or production technology than the conventional production methods.
  • Societal welfare and economic efficiency can be improved by channelling resources from environmentally damaging and less productive land use activities towards a range of promising and climate resilient sustainable land use practices. As such, there is plenty of scope for facilitating transformational changes in Beninese farming economy.

For more detail, please download the international briefing paper (EN): The economics of conventional and organic cotton production in Benin.

 

Women working in fields in Ghana
Women working in fields in Ghana

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