Country Report Cameroon May 2011

Economic policy: Cotton is illustrative of the challenges facing agriculture

Cotton remains Cameroon's fifth-largest export earner, but cotton receipts fell from more than 4% of total exports in 2005 to slightly above 2% in 2009. In stark contrast to the prevailing trend, the government's ten-year economic strategy, Document de stratégie pour la croissance et l'emploi (DSCE), published in 2009, envisages cotton production increasing to 400,000 tonnes in 2015-a 170% increase from estimated production in 2010. Meanwhile, the government's efforts to increase production appear self-defeating. In an effort to halt the decline in official production, the government has instructed regional governors to enforce the export ban on cotton and started to subsidise fertiliser for cotton producers in 2010. The government provided CFAfr6.8bn (US$14m) in 2010- the first such subsidy since 1974, according to local media-and is expected to provide CFAfr8.5bn in subsidies in 2011. However, some farmers are using loans from Sodecoton, and possibly even fertiliser subsidies, to cultivate other crops. The experience of the cotton sector is illustrative of the issues facing the agricultural sector in Cameroon. The government's reliance on subsidies, price ceilings and export bans will continue to encourage black market activities and do little to stabilise (let alone increase) cotton production in the medium term. Although the World Bank, the IMF and some members of the government advocate for the privatisation of the sector to increase productivity, fears of political and social costs related to free-market competition have so far prevented it.

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