**1. Introduction**

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376 Aflatoxins - Recent Advances and Future Prospects

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1, 1-9.

Aflatoxins (AFs) are naturally occurring mycotoxins and they are produced by species of *Aspergillus fungi*, namely *A. flavus* and *A. parasiicus*. AF contamination of peanut affects the quantity and quality produced and marketed. AF contaminated peanut is tainted and can‐ not be marketed and must be thrown away. Awuah et al. (2009) stated that about 5 to 15 percent of peanut in Ghana was discarded during sorting. This reduces the supply of peanut marketed at the farm level. Lower quality peanut is less attractive to buyers who offer a low‐ er price for AF contaminated peanut. Hence it is expected that AF will lower farmer revenue and increase production and marketing risks.

The toxic effects of AF on human and animal health constitute one of the major factors for establishing regulations regarding acceptable levels of AFs in food. These regulations re‐ quire pre-harvest and post-harvest control, such as appropriate drying, sorting and storage structures. Therefore, implementing food safety standards can be costly. According to Mitchell (2003), government regulations increase production costs which generally cause the supply curve of a firm to shift to the left: from S0 to S1 (Figure 1). Hence, if consumers are aware of the AF problem and its consequences, they will be willing to pay a higher price for a safer food supply.

Although, consumers throughout the world desire a safe food supply, not all consumers are willing to pay a higher price for safer foods. Furthermore, if they perceive the product as unsafe they may be willing to buy less of the product. This will lead to the following conclu‐ sion: Risk of AF negatively affects demand. Both (cost for sorting peanut and perception of lower quality) result in a decrease of the firm's revenue (Figure 1).

© 2013 N'Dede et al.; licensee InTech. This is an open access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. © 2013 N'Dede et al.; licensee InTech. This is a paper distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Since AF contamination of peanut is both a pre-harvest and a post-harvest problem, factors that affect production of the mycotoxin will also be discussed along these lines. AF produc‐ tion may occur during pre-harvest. In tropical countries, humidity, high temperature and rainfall are some of the factors encouraging fungal growth and AF production. Moisture content exceeding a safe range of 8 to 12% may contribute to fungal growth (Schatzki and Haddon, 2002; Diener and Davis, 1967). At harvest, moisture content in peanut is generally high and can lead to development of aflatoxigenic fungi. ICRISAT (2008) recommended dry‐ ing of peanut immediately after harvest down to 8% moisture in order to avoid the produc‐ tion of AF when the crop is stored. In Benin, the most commonly used drying method for peanut is sun drying. Farmers spread the nuts on a wooden or concrete floor usually for one to three days. Paz et al. (1989) reported that delayed drying could lead to a rapid increase in AF from 14.0 ppb at harvest to 93.8 ppb, if maize is not dried for 5 days after harvest. This was confirmed by Hell et al. (2003) who found that post-harvest contamination with AF in Benin increased when harvesting took more than 5 days and drying was delayed.

tity marketed. Based on survey answers and visual observations peanut were sorted. We ex‐ amined the peanut that were discolored, broken, punctured and discarded them. The removal of bad peanut from the lot leaves us with lower quality of marketable peanut. The second hypothesis is that AF contamination of peanut influences selling price; we examined buyers' responses to test the influence of AF on selling price. Our third hypothesis is that AF contamination influences labor costs and reduces net returns from peanut. We examined sorting, labor requirement, labor costs from survey data, and enterprise budgets. We also examined how sorting affects financial and marketing risks with capital budgets and risk

Aflatoxin and Peanut Production Risk and Net Incomes

http://dx.doi.org/10.5772/51913

379

analysis.

**Figure 1.** Market impact of food safety regulation

S1 and D1 are supply and demand respectively,

θ1 and θ2 represent both risk factors of AF.

P represents the market price,

We can further represent the market equilibrium by these equations:

S1 = α + β1 P – θ<sup>1</sup> (1)

D1 = α – β1 P – θ<sup>2</sup> (2)

Another important post-harvest factor affecting AF contamination is storage condition. Grain crops may be attacked by fungi in the field which can then develop rapidly during storage when conditions are suitable for producing mycotoxins (Turner et al., 2005). During the survey, it was reported that the most common storage system for unshelled peanuts used by farmers across all regions was polyester bags in storage houses or rooms. In addi‐ tion, farmers were questioned about the time of storage of their products. Most of them re‐ ported that they can store peanut for up to six months depending on market conditions. However, this time can be expanded to 8 to 12 months for other market participants. The relationship between the length of storage and the level of AF was, therefore, examined to assess the risk associated with storage time. Sorting of peanuts includes the elimination of broken, shriveled, discolored nuts or nuts burrowed by insect. The removal of contaminated nuts from a pile of nuts can reduce contamination level to less than 4ppb. In larger house‐ holds the young children usually are assigned the tasks for sorting the nuts (Awuah et al., 2009). The risk of contamination by AF is an important food safety hazard for field crops (Dolman, 2003). In order to protect consumers from health risks, regulatory limits have been imposed on field crops intended for use as food and feed, and have significant impacts on world export market. The World Health Organization (WHO) has set a maximum level for AF at 20 ppb in human foods and 100 ppb in animal feed (WHO, 1998). Likewise, the Food and Drug Administration (F.D.A) set a tolerance limit for peanut at 15 ppb for human (FDA, 1978). The European Union (E.U) has set stricter standards: any food products for human consumption with a concentration of AF greater than 4 ppb cannot be marketed. These standards are bound to affect the production and marketing of peanut as efforts to reduce contamination result in lower grain supply at a higher cost. This means that decisions lo re‐ duce levels of AF in peanut may affect producers net income.

The main objective of this paper was to examine the effects of AF on peanut production in Benin. The first hypothesis states that AF contamination of peanut affects quality and quan‐ tity marketed. Based on survey answers and visual observations peanut were sorted. We ex‐ amined the peanut that were discolored, broken, punctured and discarded them. The removal of bad peanut from the lot leaves us with lower quality of marketable peanut. The second hypothesis is that AF contamination of peanut influences selling price; we examined buyers' responses to test the influence of AF on selling price. Our third hypothesis is that AF contamination influences labor costs and reduces net returns from peanut. We examined sorting, labor requirement, labor costs from survey data, and enterprise budgets. We also examined how sorting affects financial and marketing risks with capital budgets and risk analysis.

**Figure 1.** Market impact of food safety regulation

Since AF contamination of peanut is both a pre-harvest and a post-harvest problem, factors that affect production of the mycotoxin will also be discussed along these lines. AF produc‐ tion may occur during pre-harvest. In tropical countries, humidity, high temperature and rainfall are some of the factors encouraging fungal growth and AF production. Moisture content exceeding a safe range of 8 to 12% may contribute to fungal growth (Schatzki and Haddon, 2002; Diener and Davis, 1967). At harvest, moisture content in peanut is generally high and can lead to development of aflatoxigenic fungi. ICRISAT (2008) recommended dry‐ ing of peanut immediately after harvest down to 8% moisture in order to avoid the produc‐ tion of AF when the crop is stored. In Benin, the most commonly used drying method for peanut is sun drying. Farmers spread the nuts on a wooden or concrete floor usually for one to three days. Paz et al. (1989) reported that delayed drying could lead to a rapid increase in AF from 14.0 ppb at harvest to 93.8 ppb, if maize is not dried for 5 days after harvest. This was confirmed by Hell et al. (2003) who found that post-harvest contamination with AF in

378 Aflatoxins - Recent Advances and Future Prospects

Benin increased when harvesting took more than 5 days and drying was delayed.

duce levels of AF in peanut may affect producers net income.

Another important post-harvest factor affecting AF contamination is storage condition. Grain crops may be attacked by fungi in the field which can then develop rapidly during storage when conditions are suitable for producing mycotoxins (Turner et al., 2005). During the survey, it was reported that the most common storage system for unshelled peanuts used by farmers across all regions was polyester bags in storage houses or rooms. In addi‐ tion, farmers were questioned about the time of storage of their products. Most of them re‐ ported that they can store peanut for up to six months depending on market conditions. However, this time can be expanded to 8 to 12 months for other market participants. The relationship between the length of storage and the level of AF was, therefore, examined to assess the risk associated with storage time. Sorting of peanuts includes the elimination of broken, shriveled, discolored nuts or nuts burrowed by insect. The removal of contaminated nuts from a pile of nuts can reduce contamination level to less than 4ppb. In larger house‐ holds the young children usually are assigned the tasks for sorting the nuts (Awuah et al., 2009). The risk of contamination by AF is an important food safety hazard for field crops (Dolman, 2003). In order to protect consumers from health risks, regulatory limits have been imposed on field crops intended for use as food and feed, and have significant impacts on world export market. The World Health Organization (WHO) has set a maximum level for AF at 20 ppb in human foods and 100 ppb in animal feed (WHO, 1998). Likewise, the Food and Drug Administration (F.D.A) set a tolerance limit for peanut at 15 ppb for human (FDA, 1978). The European Union (E.U) has set stricter standards: any food products for human consumption with a concentration of AF greater than 4 ppb cannot be marketed. These standards are bound to affect the production and marketing of peanut as efforts to reduce contamination result in lower grain supply at a higher cost. This means that decisions lo re‐

The main objective of this paper was to examine the effects of AF on peanut production in Benin. The first hypothesis states that AF contamination of peanut affects quality and quan‐ We can further represent the market equilibrium by these equations:

$$\mathbf{S}\_1 = \alpha + \beta\_1 \mathbf{P} - \Theta\_1 \tag{1}$$

$$\mathbf{D}\_1 = \alpha - \beta\_1 \mathbf{P} - \Theta\_2 \tag{2}$$

