Modelling the Economy-Wide Impact of Technological Innovation and Mapping Agricultural Potential: The Case of Burkina Faso
32 Pages Posted: 29 Jan 2020
Date Written: December 9, 2019
In this study, we develop an economy wide model for Burkina Faso to assess the most promising opportunities for technological innovations to enhance maize production and productivity and their economywide effects. We simulate the implementation of two agricultural technological innovations using a customized Computable General Equilibrium (CGE) model. One innovation is an improvement of famers’ efficiency, i.e. operating on the production frontier (typology scenario). The other shifts the frontier itself and involves the introduction of a new cultivar (crop scenario). The model has been made agriculture-focused through the following features: separate agriculture and non-agriculture labor markets, separate urban and rural representative household groups, including welfare analysis and the imperfect integration of land markets, i.e. the land market is split into agroecological zones (AEZs). The CGE model is a single-country, multi-sector, multi-market model and solved for multiple periods in a recursive manner, ten years in the case of Burkina Faso. The CGE model is calibrated using a 2013 Social Accounting Matrix (SAM). The SAM has several interesting features with regards to agricultural modelling and highlights the focus crops for Burkina Faso and particularly maize, which is the focus crop of this study. The results showed prospects of gains for the economy with the introduction of technological innovations in the maize value chain in Burkina Faso. Welfare analyses performed showed welfare gains for all household profiles studied. In other words, the introduction of innovations in the maize value chain seems to be pro-poor. Finally, the study found that a total increase of about 2% of public expenditure in this sector over 10 years is required to achieve the simulated results.
Keywords: agricultural innovation, productivity growth, CGE modelling
JEL Classification: C68, Q16, Q18
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