Welfare and Poverty Impacts of Cocoa Price Policy Reform in Cote d'Ivoire
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World Bank, Washington, DC
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Cote d'Ivoire is the world’s
leading cocoa producer, supplying nearly 40 percent of world
cocoa production. Developments in the cocoa sector can have
significant implications for poverty reduction and shared
prosperity given that the sector is a source of livelihood
for about one-fifth of the population, as well as an
important source of export and government revenues. Cocoa
pricing has always been a major focus of public policy in
the country, and in 2011 the government initiated a new
round of cocoa sector reforms seeking to stimulate cocoa
production and to secure the livelihoods of cocoa farmers
through guaranteed minimum farm-gate prices. Policymakers
will certainly like to know the likely impacts of this price
policy reform on household welfare and poverty. This paper
uses a nonparametric approach to policy incidence analysis
to estimate the first-order effects of this policy reform.
To assess the pro-poorness of the reform in cocoa pricing,
variations in poverty induced by the policy are compared to
a benchmark case. While increasing the cocoa farm-gate price
has a potential to reduce poverty among cocoa farmers, it
turns out that the increase in 2015-2016 translates into a
relatively small drop in overall poverty. This variation is
assessed to be weakly pro-poor. It is likely that this
poverty impact can be amplified by additional policy
interventions designed to address the key constraints facing
the rural economy such as productivity constraints stemming
from factors such as lack of relevant research and
development, weak extension services, poor transportation
and storage infrastructure, and generally poor provision of
relevant public goods. Addressing these issues require a
coherent policy framework that can be effectively
implemented by accountable institutions to increase the role
of agriculture as an engine of inclusive growth in Cote d'Ivoire.
Palabras clave
COCOA FARM, COCOA PRICE, POVERTY REDUCTION, COMMODITY PRICES, PRICE POLICY REFORM, DISTRIBUTIONAL IMPACT, BENEFIT INCIDENCE ANALYSIS, POVERTY IMPACT, EXPORT COMPETITIVENESS, FOOD SECURITY