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Impact of global cotton markets on rural poverty in Benin
*
Nicholas Minot
and
**
Lisa Daniels
7 September 2002
Key words: Benin, cotton, poverty, agricultural markets
JEL classification codes: I32, O13, Q13
Paper presented at the Northeast Universities Development Consortium Conference (NEUDC) Program,
25-27 October 2002, Williams College, Williamstown, Massachusetts. The field research upon which
this study is based was funded by BMZ (Germany). This paper was prepared for The World Bank.
*
Research Fellow, Markets and Structural Studies Division, International Food Policy Research Institute,
Washington, D.C., USA
**
Assistant Professor, Department of Economics, Washington Co llege, Chestertown, Maryland., USA
Minot and Daniels Impact of global cotton markets on rural poverty in Benin
1 Introduction
From January 2001 to May 2002, world cotton prices fell almost 40 percent, from 64 cents per
1
pound to 39 cents per pound . This decline is part of a longer downward trend from the mid-1990s when
cotton prices were over 80 cents per pound (see Figure 1). One reason for the recent decline the slowing
of worldwide economic growth, which has a greater effect on cotton than grains because clothing is more
income-elastic than grains are. As a result, cotton demand has been stagnant at 20 million tons over the
last three years. A s
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