An Economic Surplus Evaluation of Aflatoxin-Reducing Research: A Case Study of Senegal's Confectionery Groundnut Sector

Abstract

In international trade involving agricultural products, attempts to safeguard the health of humans, animals, and plants, have led to the imposition of sanitary and phytosanitary (SPS) standards. Due to the fact that groundnuts are susceptible to aflatoxin contamination, stringent aflatoxin standards have been imposed on groundnut trade by many developed countries. For Senegal and other groundnut exporters in the developing world, these aflatoxin standards pose a major challenge. As a result, in Senegal's confectionery groundnut sector, CIRAD (a French scientific organization) has commenced research aimed at developing an aflatoxin-reducing program. This study evaluates the potential economic impact of CIRAD's aflatoxin-reducing program.

The hypotheses underlying the study are as follows: (i) The adoption of CIRAD's aflatoxin-reducing program would enhance the welfare of Senegal's confectionery groundnut farmers (ii) An overall welfare net-gain would be derived by Senegal from the adoption of the program.

The analysis employs an economic surplus model that incorporates trade, as well as, domestic production and consumption. Various scenarios of program-effectiveness are examined. The results support the hypotheses of the study; besides enhancing farmers' welfare, the adoption of the aflatoxin-reducing program is expected to yield an overall net-gain ranging between US$0.56 million and US$4.25 million. The overall net-gain is, however, very small.