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The study analyses the impact of agricultural price policy on agricultural production and its composition, agricultural incomes, rural income distribution and the labour economy. The analysis focuses on the cotton sector in Benin where a price stabilisation policy is pursued in combination with a package of services such as extension, input and credit supply, marketing and innovation development. Macro-economic data in Benin are often not available or so unreliable that a micro-economic approach with primary data collection has been chosen. This approach also permits to analyse intra- and inter-household distributional effects of price policy, differentiated by agro-ecological zone, household size, ethnic group and gender.