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Cameroon Agribusiness Report Q2 2010
Market |
Agriculture, Farming & Raw Materials |
Report Type |
Market Research |
Country |
Cameroon |
Published |
10 February 2010 |
Number of Pages |
45 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
In our Cameroon Agribusiness Report for Q2 2010 we take a closer look at the prospects for the country's major cash crops in the coming decade. Growth in production of cocoa and coffee stalled in the late 1980s as farmers switched to production of staple consumption crops such as grain. This was partly a result of low world prices and the poor competitiveness of production in Cameroon. Export taxes also suppressed the returns to farmers producing these commodities.
Export taxes have been gradually lifted since and were finally abolished in 2000. Combined with the rise in agricultural commodity prices over the past decade, this has helped re-engage interest in export crops in Cameroon from the government and farmers.
Production growth has been particularly impressive, for cocoa at least, over the past three years. From 2005/2006 to 2008/2009, production grew by an average annual rate of 7.7% year-on-year (y-o-y). While favourable weather conditions obviously played a part, much of the credit for the rise in production is due to increased efforts of government agencies and producer associations to improve production. Farmers have also been helped by a rise in the season average price from XAF787 per kg in 2007/2008 to XAF835/kg in 2008/2009. In 2009/2010, we expect another year of rapid growth. We forecast production to rise by 8.2% this year to a record 221,790 tonnes, overshooting the National Cocoa and Coffee Board (NCCB)'s target of reaching annual production of 210,000 tonnes in 2010.
Farmers have benefited from programmes to provide high-yielding seedlings for free or at subsidised rates, as well as subsidised access to inputs such as fertiliser and pesticides. After almost 20 years of decline and stagnation, the area harvested for cocoa rose by 35% in 2003-2008. The new area will also help yields improve as younger, higher yielding trees begin production. At present, many plantations are well past their peak.
One factor holding back the rapid growth in cocoa, and all agricultural production, is Cameroon's woeful infrastructure. Poor transport links make it difficult for farmers to get their products to market. The cost of transporting produce from the production site to ports for export means farmers receive only a small fraction of the world price of their produce. For farmers in east Cameroon, away from the coast, the problem is particularly bad. Hundreds of kilometres from the west coast ports, cocoa farmers in the east often receive little more than 50% of the price paid to farmers nearer the coast. This works against investing in expanding production. Work on improving the country's major highways is now underway but many farmers will still struggle to get their goods to the nearest major roads. It will take years to improve the infrastructure, leaving smallholder farmers at the mercy of traders and transport companies.
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