Microeconomic analysis of the competitiveness 5 of rice production in Benin

Abstract

This paper aims at analysing the competitiveness of rice production in Benin in 2010. It uses the policy analysis matrix (PAM) as a tool and the heterogeneous agent model. Unlike previous studies, it assesses the competitiveness at the microeconomic level. The data used were collected in Benin from 265 rice farmers selected randomly. The results indicate that rice production is financially profitable for 84.2 % of the farmers and economically profitable for 63.4 % of them. Rice farmers do not have a comparative advantage on average in rice production. However, the analysis of the distribution of domestic resource costs (DRC) indicates that 63.4 % of rice farmers have a comparative advantage in rice production. The effective and nominal protection coefficients indicate that the majority of producers are subsidized. Yield, unit cost of labour and price of fertilizers are the main determinants of the producers’ competitiveness.