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Cameroon Agribusiness Report Q3 2009Published by: Business Monitor International Published: Jul. 1, 2009 - 41 Pages Table of Contents
AbstractUnder the right conditions, Cameroon could be a notable agricultural producer, as well as food selfsufficient.The country has varied terrain, a mix of climatic conditions and good quality soil. Yet, despiteits potential as a breadbasket of West Africa, historically, a series of limiting factors have harmed thedomestic farming outlook. Corruption, a lack of government prioritisation, unregulated trade andinadequate infrastructure can all take some blame for the slow pace of agricultural development in theregion. Having said that, as a number of globally important - and locally produced - cash crops haveattracted the attention of private investors to the area, this has had a much needed effect in boostingindustry fundamentals, as well as augmenting the state's recently strengthened resolve in furthering thepositive outlook for export commodities such as coffee, cocoa and sugar. BMI's latest CameroonAgribusiness Report regards these developments against the country's need to improve domestic capacityin basic household staples. Coffee is among the country's most lucrative cash crops. Having decided to harness the export potentialof local beans, due to its perceived high quality among robusta varieties, the government has implementedvarious measures intended to support the industry. Tax exemption on input import duties has enabledeasier access to the relevant seeds and fertilisers needed to improve fundamentals. In addition, the statebudget is being utilised to facilitate financing schemes whereby farmers can reclaim unused plantations inorder to boost output and improve economies of scale. Such incentives are forecast to be complimentedby the emergence of a growing band of small-scale farms merging together to form co-operatives andimproving access to credit, which has often been a major stumbling block to growth. We see coffeeproduction benefitting immensely from such measures, expanding by just over 12% throughout theoutlook. There have been strong efforts of late by both the local government and private investors to focus onstronger domestic supply chain links for African cocoa production. A record harvest of 187,000 tonneswas posted in 2008, while the fundamentals for the current crop seem equally positive, as supplyproblems in neighbouring producers has been supportive to prices. We predict output to expand by almost85% between 2009 and 2013, which is by far the largest production growth predicted in the currentoutlook. West Africa is the hub of global cocoa production and, while the lion's share of interest frommultinational companies and private investors is likely to be directed towards the Ivory Coast and Ghana(the world's top two producers), Cameroon can expect to attract a fair portion of attention among thoseseeking to more closely integrate supply/value chain processes. Meanwhile, cocoa sustainability programmes, initiated by the likes of Cadbury's, are making theprospect of cocoa farming increasingly attractive to locals. Similarly, the production of sugar is forecastto benefit from the privatisation of state-run enterprises, enabling a greater degree of profit-makingpotential for plucky entrepreneurs. Despite the positive outlook for the country's main agricultural cash crops, there remains a degree ofconcern that imports will comprise a larger share of the domestic consumption outlook through to 2013.As a larger percentage of the population becomes less poor, the demand for rice, corn and meat will rise,yet very little attention seems to have been directed towards improving production in these categories,which is worrying in a time of volatile global food supplies. Going forward, it is imperative to addresssuch issues. Finally, as the country attempts to rid itself of a generally undesirable reputation for graft and corruption,we believe such efforts will do much to improve the business environment ratings of the country, thuslaying the foundation for a greater degree of investment growth. Get Full Details About This Report >> |
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