Risk and agricultural systems in northern Cote d'Ivoire

In the Savannah region of West Africa, the highly variable rainfall and poo r soils have been shown to differentially affect the yield potential of var ious crops. The paper applies a simple risk programming model to assess the effects of price and yield risk on the incomes of smallholder farmers in n orthern region of Cote d'Ivoire. The analysis showed that by considering pr ice and yield risks, it would be possible for farmers to improve their inco mes. Considerable evidence has been gathered to show that smallholder alloc ative inefficiency is a common place in Gate d'Ivoire. This study also foun d that farmers were operating at sub-optimal levels. This could be due to s everal factors, including multiple market failures, lack of information on prices, price and yield risks, labor market search costs or high transactio n costs. The results from this paper suggests that when such price series i nformation on the risks of different crops are considered, farmers would be better off re-allocating their cropping to a more optimal cropping plan. I n evaluating cropping systems in the Savanna zone it is important to consid er not only the yield of alternative crops, but also the yield risk, price risk, and income risk that farmers face in adjusting their cropping pattern s. Second, to reduce production risks faced by farmers, emphasis should be placed on yield-stability of technology interventions intended for farmers in this zone. Lastly, policy makers should focus efforts on achieving farm income stabilization for farmers in this zone by: (1) developing effective market price information transmission system; (2) providing low-cost but hi gh-resolution climatic information; and (3) developing risk-management inst itutions. Unless policy makers improve the availability of information that allows farmers to improve their managerial capacity for making more risk-e fficient cropping decisions, it is unlikely that farmers in the zone will b e able to cope with the pervasive risks that affect their welfare and livel ihoods. (C) 2000 Elsevier Science Ltd. All rights reserved.