Cameroon Agribusiness Report

BMI's Cameroon Agribusiness Report Q409 continues on the themes touched upon in previous publications, as the country - potentially a 'breadbasket' of West Africa - continues in earnest its attempts to improve its food sovereignty rating.

Local coffee and cocoa farmers are set to benefit from a new system disbursing up-to-the-minute market information. The modern market information system - named Infoshare - was part developed by the United Nations Conference on Trade and Development (UNCTAD) and is seen as being a very useful tool in helping local farmers to realise greater profits by way of limiting the potential for intermediary profiteering. UNCTAD estimates that Infoshare may help farmers increase revenues by as much as 15% in the world's fifth largest cocoa producer, while a successful adoption of the scheme could lead to the concept being replicated across the continent.

Infoshare has been in the pipeline for a while, having first been conceptualised in 2005. The system will enable users to access information relating to quality of produce and prices - international as well as local
- from a variety of mediums including the internet, local radio stations and mobile phones. It is hoped that a network comprising up to 65 community radio stations will be built, broadcasting in various regional dialects so as to maximise the percentage of farmers benefitting from the scheme.

BMI has predicted coffee and cooca production growth of 10.36% and 86.70% (the latter from a much lower production base) respectively to 2013, due to investments by companies such as Barry Callebaut and Mars aimed at developing sustainable industries; the Infoshare scheme can be viewed as a welcome complement to such efforts.

Such positive sentiment is in danger of disappearing from the vital corn industry as a corruption scandal threatens to undermine strong efforts at achieving self-sufficiency. According to a Reuters report published in the second week of August, around CFA2bn of proposed corn subsidies was embezzled by corrupt officials via fake farmer groups, as told by Cameroon's National Anti-Corruption Commission (NACC). According to the report, 47 members of the ministry are to be prosecuted, which, on one hand is a positive sign of Cameroon's determination to rid the country of the negative image associated with corruption and graft. Such efforts are commendable, although the fact that the story made the news will do little to quell the underlying fears of many potential investors in Cameroon, thus serving to limit their appetite for risk in a country possessing an already dubious reputation for business malpractice.

Nevertheless, we foresee corn production rising by 6.97% through to 2013, keeping on a similar trajectory to the forecasting period from 2003 to 2008; not least because the government appears more committed in its efforts to improve fundamentals, with irrigation likely to be a particular focus, while access to better quality inputs, such as higher yielding seeds and fertiliser, will provide optimism.

However, we expect the deficit to expand to 2013, as growing household consumption and use of corn as a feedstock will outpace productivity gains.

The government has announced it will be reducing the price of staple goods such as rice, salt and fish from July 1 by 25% and we believe this will have a significant impact on overall consumption. At the same time, a government programme to distribute free pesticides and seeds to farmers' organisations should help boost subsistence agriculture, further raising income across a wide swath of the population, especially in 2010.