Economic Risks of Aflatoxin Contamination in the Production and Marketing of Peanut in Benin

Abstract

Aflatoxins are naturally occurring mycotoxins that are produced by species of fungus: Aspergillus flavus and parasiticus. Aflatoxins occur in many agricultural products, in particular peanut (Arachis Hypogea L.). Many developing countries are affected by aflatoxin problem. The focus of this thesis is on farmers and market participants of peanut in Benin. We examine the risk of aflatoxin contamination on producing and marketing peanut in Benin. We, therefore, use enterprise budget and risk analysis to evaluate the effects of aflatoxin contamination on production and marketing of peanut. Data were collected in 2007 through a personal survey in three agro-ecological zones. A total of 90 farmers, 45 traders, 90 processors and 45 stockers were interviewed. Laboratory analyses show that samples collected from processors had high levels of

aflatoxin of up to 980 ppb, followed by the stockers with a maximum level of 610 ppb. Highest level for farmers was 230 ppb while for the traders, it was lower (7.3 ppb); these levels exceed the regulatory limits set by the WHO. Further, results show a decrease in net returns when farmers and market participants sort their products in an attempt to reduce aflatoxin levels. It is more profitable for producers and market participants to sell unsorted peanut immediately after harvest than to sort it before selling. Sorting peanut affects both labor cost and net returns. Unless they sell sorted peanut at a higher price there is no incentive to sort the peanut. In addition, findings indicate that aflatoxin production increases with storage length and this affects product quality and market prices. After 6 months of storage, net revenues from sale of peanut decrease due to lower peanut quality. Unless there is a policy in place for price increases for a better quality and safe product, market participants are likely to engage in cost shifting. Overall, results from enterprise budgets and risk analysis describe drying, sorting, and storage as the most important factors affecting costs and net returns. The results also show that the sorting of peanut may increase market risks of participants. Understanding the economic impacts of aflatoxin contamination may help farmers and market participants to improve product quality in the peanut sector in Benin.