2017年-世界发展银行全球_Welfare_and_Poverty_Impacts_of_Cocoa_Price_Policy_Reform_in_Cote_dIvoire_27页_643kb

Summary of "Welfare and Poverty Impacts of Cocoa Price Policy Reform in Côte d'Ivoire"

Core Content

Côte d'Ivoire is the world's leading cocoa producer, accounting for nearly 40% of global cocoa output. The cocoa sector plays a vital role in the country's economy, contributing to GDP, export revenues, and government income, while also serving as a major source of livelihood for about one-fifth of the population. Given this, changes in cocoa pricing have significant implications for poverty reduction and shared prosperity.

In 2011, the government initiated a new round of cocoa sector reforms, moving from an indicative pricing system to a guaranteed minimum farm-gate price. The goal was to improve the income of cocoa farmers and stimulate production. The farm-gate price was set at 60% of the CIF (cost, insurance, and freight) price, with specific increases over the 2012/2013 to 2015/2016 seasons. These prices were initially CFAF 725/kg (2012/2013), then increased to CFAF 750/kg (2013/2014), CFAF 850/kg (2014/2015), and finally CFAF 1,000/kg (2015/2016).

The paper uses a nonparametric benefit incidence analysis to estimate the first-order welfare and poverty impacts of the price reform. This method assesses the probability of households engaging in cocoa farming and the relationship between the benefit ratio (cocoa sales to total household consumption) and per capita consumption.

Main Points

• Cocoa Sector Importance:

  • The cocoa sector is central to Côte d'Ivoire's economy, providing livelihoods, export revenues, and government income.
  • It is a key driver of poverty reduction, with strong links between cocoa prices and poverty levels.

• Cocoa Pricing History:

  • From 1960 to 1999, the government used an administered pricing system (barème) to set producer prices and profit margins.
  • In 2000, liberalization began, replacing the barème with indicative prices, which were not enforced.
  • Indicative prices often resulted in cocoa farmers receiving only 30–50% of the international price.

• 2011 Reforms:

  • The government reverted to a guaranteed minimum farm-gate price system.
  • The farm-gate price was set to be at least 60% of the CIF price, with increases over the years.
  • A new marketing mechanism and a reserve fund were introduced to support the price guarantee.

• Impact of Price Changes on Poverty:

  • The 2015–2016 price increase led to a relatively small drop in overall poverty, indicating a weakly pro-poor impact.
  • The benefit ratio (cocoa sales to total household consumption) was used to assess welfare changes.
  • The distribution of benefits was evaluated against a benchmark case where all households received the same benefit ratio.

• Limitations of the Analysis:

  • The study only captures first-order static effects, not second-order or general equilibrium impacts.
  • The assumption that households remain near their initial optimal state after a price shock is critical.
  • Large price changes or institutional constraints may invalidate the results.

• Poverty and Inequality in Côte d'Ivoire (2015):

  • 46.2% of the population lived below the poverty line.
  • Poverty is more concentrated in rural areas (56.7%) than urban areas (35.4%).
  • Among agricultural households, 56.5% were poor, compared to 57.0% for non-cocoa farmers.
  • Cocoa farmers had a slightly lower poverty rate (54.9%) than the general agricultural population.
  • Inequality (measured by Gini coefficient) was higher in urban areas and among non-cocoa farmers.
  • Inequality was also higher in the South than in the North among cocoa farmers.

• Distributional Impact of the Price Reform:

  • The reform was found to be weakly pro-poor, as the poverty reduction was modest compared to a hypothetical scenario with uniform benefit distribution.
  • The effectiveness of the reform was limited, suggesting that additional interventions are needed to enhance its impact on poverty.

Key Information

• Cocoa Production:

  • Côte d'Ivoire produces about 38% of the world’s cocoa.
  • Most cocoa is produced by smallholder farmers in the Southern region.

• Price Trends:

  • World cocoa prices fluctuated significantly from 1960 to 2015, peaking at $3.8/kg in 1979 and dropping to 91 cents/kg in 2000.
  • The farm-gate price in Côte d'Ivoire increased from CFAF 725/kg in 2012 to CFAF 1,000/kg in 2016.

• Exchange Rate Impact:

  • The depreciation of the CFAF against the US$ played a significant role in the increase of farm-gate prices.

• Policy Recommendations:

  • The reform’s poverty impact could be amplified with additional policies addressing productivity constraints such as:
    • Lack of research and development
    • Weak extension services
    • Poor transportation and storage infrastructure
    • Insufficient provision of public goods
  • A coherent policy framework and accountable institutions are essential for increasing the role of agriculture in inclusive growth.

Conclusion

The 2011 cocoa price policy reform in Côte d'Ivoire, which introduced guaranteed minimum farm-gate prices, had a limited and weakly pro-poor impact on household welfare and poverty. While the policy aimed to improve the livelihoods of cocoa farmers, its effectiveness was constrained by the distribution of benefits and the lack of complementary reforms. To enhance the pro-poor effects, the government must address structural issues in the rural economy and ensure that the cocoa sector becomes a more effective engine for inclusive growth.