Impact of global cotton markets on rural poverty in Benin
World cotton prices have fallen by about 40 percent over the last two years, focusing attention on the effect of subsidies for cotton growers in depressing prices. This paper combines farm survey data from Benin with assumptions about the decline in farm-level prices to estimate the direct and indir...
| Main Authors: | , |
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| Format: | Artículo preliminar |
| Language: | Inglés |
| Published: |
International Food Policy Research Institute
2002
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| Subjects: | |
| Online Access: | https://hdl.handle.net/10568/156033 |
| _version_ | 1855515056441131008 |
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| author | Minot, Nicholas Daniels, Lisa |
| author_browse | Daniels, Lisa Minot, Nicholas |
| author_facet | Minot, Nicholas Daniels, Lisa |
| author_sort | Minot, Nicholas |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | World cotton prices have fallen by about 40 percent over the last two years, focusing attention on the effect of subsidies for cotton growers in depressing prices. This paper combines farm survey data from Benin with assumptions about the decline in farm-level prices to estimate the direct and indirect effects of cotton price reductions on rural income and poverty in Benin. The results indicate that there is a strong link between cotton prices and rural welfare in Benin. A 40 percent reduction in farm-level prices of cotton results in an increase in rural poverty of 8 percentage points in the short-run and 6-7 percentage points in the long run. Based on the estimated marginal propensity to consume tradable goods, the consumption multiplier is in the range of 3.3, meaning that one dollar of reduced spending by cotton growers results in a contraction of 3.3 dollars in overall demand. Finally, econometric analysis of the determinants of the demand for hired agricultural labor suggests that falling cotton prices will not greatly reduce labor demand since the labor intensity of cotton is similar to that of competing crops in Benin. Overall, the study highlights the link between rising subsidies for cotton growers in the U.S. and rural poverty in cotton exporting countries such as Benin. |
| format | Artículo preliminar |
| id | CGSpace156033 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2002 |
| publishDateRange | 2002 |
| publishDateSort | 2002 |
| publisher | International Food Policy Research Institute |
| publisherStr | International Food Policy Research Institute |
| record_format | dspace |
| spelling | CGSpace1560332025-11-06T05:12:37Z Impact of global cotton markets on rural poverty in Benin Minot, Nicholas Daniels, Lisa cotton industry subsidies rural poor prices cotton World cotton prices have fallen by about 40 percent over the last two years, focusing attention on the effect of subsidies for cotton growers in depressing prices. This paper combines farm survey data from Benin with assumptions about the decline in farm-level prices to estimate the direct and indirect effects of cotton price reductions on rural income and poverty in Benin. The results indicate that there is a strong link between cotton prices and rural welfare in Benin. A 40 percent reduction in farm-level prices of cotton results in an increase in rural poverty of 8 percentage points in the short-run and 6-7 percentage points in the long run. Based on the estimated marginal propensity to consume tradable goods, the consumption multiplier is in the range of 3.3, meaning that one dollar of reduced spending by cotton growers results in a contraction of 3.3 dollars in overall demand. Finally, econometric analysis of the determinants of the demand for hired agricultural labor suggests that falling cotton prices will not greatly reduce labor demand since the labor intensity of cotton is similar to that of competing crops in Benin. Overall, the study highlights the link between rising subsidies for cotton growers in the U.S. and rural poverty in cotton exporting countries such as Benin. 2002 2024-10-24T12:43:03Z 2024-10-24T12:43:03Z Working Paper https://hdl.handle.net/10568/156033 en Open Access application/pdf International Food Policy Research Institute Minot, Nicholas; Daniels, Lisa. 2002. Impact of global cotton markets on rural poverty in Benin. MTID Discussion Paper 48. https://hdl.handle.net/10568/156033 |
| spellingShingle | cotton industry subsidies rural poor prices cotton Minot, Nicholas Daniels, Lisa Impact of global cotton markets on rural poverty in Benin |
| title | Impact of global cotton markets on rural poverty in Benin |
| title_full | Impact of global cotton markets on rural poverty in Benin |
| title_fullStr | Impact of global cotton markets on rural poverty in Benin |
| title_full_unstemmed | Impact of global cotton markets on rural poverty in Benin |
| title_short | Impact of global cotton markets on rural poverty in Benin |
| title_sort | impact of global cotton markets on rural poverty in benin |
| topic | cotton industry subsidies rural poor prices cotton |
| url | https://hdl.handle.net/10568/156033 |
| work_keys_str_mv | AT minotnicholas impactofglobalcottonmarketsonruralpovertyinbenin AT danielslisa impactofglobalcottonmarketsonruralpovertyinbenin |