AN EMPIRICAL INVESTIGATION INTO THE DRIVERS OF AGRICULTURAL PRODUCTIVITY IN CAMEROON

Abstract

Agriculture is considered as an investment when its outputs have the ability not only to take care of today’s needs, but that of those of the future. Cameroon for about some decades ago has been famous in the production of cash crops, food crops, animal farming, fishery among others, so much that more than 60% of its Gross Domestic Product was obtained from agricultural export. Today the story seems to be different. The import of Cameroon on agricultural outputs is above 50% of its Gross Domestic Product. It is on this note that this study is designed to empirically evaluate on the drivers of agricultural outputs on the ground of whether agriculture in Cameroon is for consumption or for investment. Agriculture is seen as consumption when it is meant for short term benefits and for investment when its extraction and usage is beneficiary to economies goes beyond 10 years. In this case its value chain is multiple not only in volume but also in cash returns. In this paper, agricultural productivity is designed as a function of physical capital formation, human capital formation, climatic variability (temperature and rainfall), credit to farmers, credit to government, trade openness, population growth rate, tertiary school enrolment for the training of agricultural experts, rural urban migration, infrastructural investment by the government, among others. To achieve the objective of this study the Autoregressive Distributive Lagged (ARDL) model fitted on a time series data spanning from 1990 to 2021 is adopted for data analysis. The study shows that in the short run, agricultural productivity (consumption) positively influenced physical capital formation, human capital formation, rainfall variability, domestic credit to farmers, population growth rate, while health spending as reflected on agricultural productivity, temperature, credit by the public sector, population growth rate and tertiary school enrolment are agricultural retarding argents. The long-run findings reveals that gross capital formation, health expenditure, rainfall, and credit to the private sector enhance agricultural sector productivity while temperature, trade openness, population growth rate and tertiary school enrolment rate retard agricultural productivity(investment) in Cameroon. Since the interest of this study is to evaluate the drivers of agricultural investment in Cameroon and beyond; we hereby recommend that more than 30% of the current investment budget of Cameroon should be directed to  physical capital formation, agricultural health expenditure, climate control, agricultural loan by the public sector, agricultural technology and technological innovation, encouragement of moral suasion from Commercial banks, integrated educational system for nation building, guided exchange rates between Cameroon and it trading partners under minimum exchange rate legislation or exchange rate floor, and morally acceptable level of financial discipline.