The production of cash crops is often seen as an effective way to fight poverty in developing countries. Using data from the Senegal poverty monitoring Survey II (ESPS II), this study assessed the impact of the production of cash crops on the welfare of farm households in Senegal.
Since it is likely that cash cropping by a household was affected by the same unobserved factors that affect household welfare (defined as the nominal consumption expenditure per adult equivalent, converted into real terms by dividing it by the national poverty line), an instrumental variables approach that addressed the endogeneity of cash cropping was employed. An uncondition- al quantiles regression was also conducted to assess the impact of cash cropping on the distribution of farm households’ wel- fare. It appears that the production of cash crops (including groundnut, tomato, melons, banana, sesame, oil palm, apple cashew, cotton, citrus and jatropha), negatively impacts the welfare of farm households in Senegal, with a more pro- nounced effect on households with higher levels of welfare. Accordingly, the role assigned to the agricultural sector for poverty reduction in Senegal cannot mainly result from the production of cash crops at this stage of national development. Agricultural policies in Senegal must focus more on promot- ing food crops and on facilitating access to production assets within a political and economic framework that supports an efficient functioning of markets.
The fight against poverty is a central concern for the Government of Senegal, where about one person in two is poor (ANSD 2013). However, progress with the reduction of poverty is slow. For example, the poverty rate was estimated at 46.7% in 2011 compared with 55.2% in 2001 (ANSD 2013). This slow pace of poverty reduction did not allow the country to achieve Millennium Development Goal (MDG) 1. Farmers, representing the majority of Senegalese households, appear to be most affected by poverty; the poverty rate of households headed by agricultural self-employed workers is 59.8%, which is well above the national one. Senegalese households have an expenditure structure very dependent on food con- sumption. They spend more than half of their expenditure on food (ANSD 2013). Overall, Senegal is a net importer of food despite the strong predominance of agriculture in the country.
Agriculture has long been a focus of interest for the gov- ernment of Senegal to accelerate economic growth and reduce poverty. Several types of agricultural policies1 at national lev- el, within the framework of cooperation in Africa (through the CAADP), and at a sub-regional level (through ECOWAP) were developed to achieve these goals. Growth in the produc- tion of agricultural crops is at the center of these policies, particularly cash crops, which are often seen as an effective way to fight poverty in developing countries (Jones and Gibbon 2011). The main cash crops in Senegal are groundnut, sorrel flower, tomato, watermelon/melon, banana, sesame, oil palm, apple cashew, cotton, gum arabic, citrus and jatropha. Theoretically, the production of cash crops can enable house- holds to get more income and better satisfy their needs than the production of their own food, and cash crops often have higher added value than food crops (Poulton et al. 2001). Additionally, the degree of specialization that renders market- ing possible can increase the overall efficiency of resource utilization in agriculture. Finally, cash cropping can loosen a households’ cash constraint to invest in health and education (Poulton et al. 2001).
Overall, the different agricultural policies that have been implemented in Senegal seem not to have achieved the objec- tives targeted by the government as they have not translated into higher growth in agricultural production. For example, over a period of fifteen years, the contribution of agriculture to economic growth was around zero (Fall et al. 2013). This poor performance is more pronounced in the case of cash crops and the contribution of ‘industrial’ agriculture to growth remains erratic. From 1997 to 2001, its contribution to growth was 0.3%, fell to an adjusted −0.3% between 2002 and 2006, and from 2007 to 2011 it was zero % (Fall et al. 2013). As an example, the production of groundnut, which is the main source of income in rural areas and was also among the top four export products in Senegal (along with fishery products, phosphates, and tourism), has no longer assured the regular supply for mills, provided adequate stocks of seeds to main- tain cropping, or even been able to satisfy home-consumption since the late 1970s (Mboup 2004).
Another issue related to cash cropping is the risk associated with this activity, including harvest failures (due to pests, dis- eases and drought), price slumps, loss of market access and income decline (Achterbosch et al. 2014). These sources of risks are pervasive across Senegalese agriculture, where weather and price variability for crops are the most important factors contributing to risk with agricultural production and marketing (D’Alessandro et al. 2015). These risks have seri- ous impacts on the welfare of farm households by increasing their vulnerability to food insecurity. D’Alessandro et al. (2015) pointed out that extreme price volatility deters pro- ducers from making productivity-enhancing investments and can jeopardize access to food by poorer households. Boccanfuso and Savard (2008) noted that the reduction of world prices for groundnut has relatively strong neg- ative effects on poor households in Senegal if farmers are not protected through a guaranteed purchase price. However, in Senegal (as in many other developing coun- tries) risk management mechanisms are underdeveloped. Accordingly, an over-reliance on the production of cash crops may be too risky for Senegalese farm households seeking to reach food security. Download the full article here