Adoption Potential of Land Use Systems

Adoption Potential of Land Use Systems

“Best bet” Land-use Systems

Country reports

Alternatives to Slash-and-Burn in Cameroon

Unique id: IDAD2J5E

Source file: D:\Projects\ASB\ASB Country and Thematic reports\Cameroom Final Report\Final Report&Synthesis of PhaseII-Cameroon.xml

Authors: J. Kotto-Same, A. Moukam, R. Njomgang, T. Tiki-Manga, J. Tonye, C. Diaw, J. Gockowski, S. Hauser, S. Weise, D. Nwaga, L. Zapfack, C. Palm, P. Woomer, , Andy Gillison, D. Bignell, J. Tondoh

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No matter how wonderful the parameters concerning agronomic sustainability or the environment may be for a particular land use system, small scale farmers are only likely to undertake these systems if the systems promise to improve farmer livelihoods without requiring them to assume an extraordinary amount of risk. Livelihoods in the forest margins of Cameroon are sustained by a complex set of productive and social activities conducted within the context of a risk-reducing kinship network of social relationships. A particular land use can contribute to livelihoods in numerous fashions: the two most obvious and important are through the generation of revenues and subsistence food production. Other secondary contributions include maintenance of clan patrimony and land tenure rights, medicinal products (e.g. medicinal herbs and barks which are often collected in cocoa agroforests), accommodation needs, and as a source of ancestral continuity and beliefs (e.g. certain trees are considered magical sources of ancestral essence). Additionally, the adoption of some land- use systems has high requirements in terms of institutional development and support services, which can limit uptake in institutionally underdeveloped areas. In ASB, we attempted to capture certain aspects of these dimensions for various land use systems by evaluating measures of system profitability, labor requirements, household food security and institutional requirements for the eight land-use systems discussed above. (Vosti, S. et al. 1998)

Profitability

The most important criterion for adoption in a commercialized agricultural economy is arguably the profitability to the farmer of the proposed system or system intervention. Two measures of profitability were estimated by using two sets of prices—financial and social. Financial prices are those actually paid by farmers and include any distortions from the competitive market norm (i.e., taxes, subsidies, trade quotas, misaligned exchange rates, other non-tariff barriers and market power). These are the prices most relevant for technology adoption. In contrast, social prices are a first order estimate of what prices would be in the absence of economic distortions. From a policy perspective, the divergence between financial and social prices is an important indicator of the degree of distortion in a given market and the opportunities for improving economic incentives.

Since six of the systems were perennial, with yields varying as a function of age, profitability was evaluated over a 30 year period using the discounted net present value (NPV) accounting approach and a discount rate of 10%. The opportunity cost of household labor was evaluated at a value of $1.21 per day.

When social profitability was measured on an annual, per hectare basis, the more lucrative perennial crop systems tended to strongly dominate the two slash-and-burn systems (Table 16).[1] The social NPVs per hectare were $288 and $644 for long and short fallow intercropped food systems, versus $1,755 and $1,654 for the shaded intensive cocoa/mixed fruit tree system and thehybrid oil palm system in forested land. Among the perennial crop systems, the extensive cocoa system was least profitable, at $616 ha^-1.

In the relatively land surplus economies characteristic of much of the Congo basin, adoption potential is more appropriately measured by the estimated financial returns to labor. On this basis, the enterprises were clustered as follows:

relatively high profit medium profit low profit

1) intensive cocoa w/fruit 1) extensive cocoa w/fruit 1) mixed groundnut

2) oil palm in forest fallow 2) intensive cocoa w/o fruit 2) oil palm in short fallow

3) Cucumeropsis/plantain

4) extensive cocoa w/o fruit

Differences among enterprises are compared to the official minimum wage of $2.17 per day for unskilled manual labor. The highest returns to labor were for the oil palm system planted in forested land ($2.44) and the intensive cocoa system with fruit trees ($2.36 per day) (Table 16). Earnings in intensive cocoa with no fruit and extensive cocoa with fruit were similar to the official minimum wage ($1.95 and $2.13 per day). Returns tended to lie below the official minimum wage for the mixed groundnut ($1.79 per day), Cucumeropsis/plantain ($1.70), the extensive cocoa system without fruit ($1.63 per day), and the short fallow oil palm system ($1.78). Although the absolute differences in labor returns do not seem to be very large, the relative difference between the highest and the lowest returns is 40%.

This static view of profitability masks the volatility that characterizes agricultural and world commodity markets. The recent episode of low cocoa prices (1988 to 1996) had a significant impact on the profitability of the sector. In 1997, the average price received in southern Cameroon varied from 600 to 700 FCFA, whereas in 1996, producers were receiving 350 to 400 FCFA. At a producer price of 400 FCFA for cocoa, the return to labor for the intensive cocoa system with fruit falls to $1.58 day^-1 and the social profitability per hectare drops to $785 ha^-1.

Although economies of scale are not assumed for any of the above systems, they are likely to exist in oil palm systems, based on the observation that worldwide, most production tends to occur on large plantations. The converse seems true of cocoa systems, for which most large plantation schemes have failed.[2]

Table 16. Profitability of ASB land use systems in Cameroon

Land use system		Returns to land		Returns to labor (wage NPV=0)		Establishment costs		Years to positive cash flow
	scale (ha)	Fin.	Social	Fin.	Social	Fin.	Social
		$ ha^-1		$ day^-1		$ ha^-1		years
SF-annual food crop	0.25	623	644	1.79	1.80	n.a.	n.a.	n.a.
LF-forest crop field	0.25	283	288	1.70	1.72	n.a.	n.a.	n.a.
SF-intensive cocoa w/ fruit	1.30	1,409	1,755	2.36	2.64	1,198	1,177	7
SF-intensive cocoa w/o fruit	1.30	889	1,236	1.95	2.23	1,304	1,277	8
FOR-extensive cocoa w/ fruit	1.30	943	1,136	2.13	2.32	1,188	1,172	7
FOR-extensive cocoa w/o fruit	1.30	424	616	1.63	1.82	1,247	1,227	8
SF-oil palm	1.00	736	982	1.81	2.01	1,264	1,257	5
FOR-oil palm	1	1 471	1 654	2.44	2.67	1,150	1,142	5
Community-based forest	5 000.00	Valuation issues still to be resolved.

Labor Requirements

In labor scarce, rural economies, or where labor markets are institutionally underdeveloped (both pertinent to southern Cameroon), labor intensity is an important determinant of the extent to which a given system will be adopted. On the basis of annual person days required for operations, the most labor-extensive systems are the Cucumeropsis/plantain field, and the extensive cocoa systems, at 44, 46, and 43 person days’ ha^-1 yr^-1, respectively (Table 17).In the case of the Cucumeropsis/plantain field, the figure is deceptive because of the long fallow period (15 years) over which the system requires no labor input. In fact, to actually bring a hectare of Cucumeropsis/plantain into production requires an estimated input of 731 person days of labor, which explains its small average size in the farming systems of the region

(2, 500 m^-2). A similar situation confronts adoption of the mixed groundnut field system which requires an annual input of 690 person days, which, when averaged over the 6 years of the fallow-production cycle, lowers the figure to 115 person days. This is still the highest annual labor intensity of any of the systems.

Table 17. Labor requirements and food entitlements for best bet land uses

		Labor		Food entitlements during productive stage			Source of food security		Risk
	Scale	estab-lishment	operat-ing	calories	protein	micro-nutrient	during establish	during operation
	ha	days ha^-1 yr^-1		000 kcal ha^-1yr^-1	kg ha^-1 yr^-1
SF-food intercrop	0.25	n.a.	115	3,803	54.8	yes	--	op & cash	?
LF-food intercrop	0.25	n.a.	44	780	10.9	yes	--	op & cash	?
SF-intensive cocoa w/ fruit	1.3	148	97	1,463	19.8	yes	op	op & cash	?
SF-intensive cocoa w/o fruit	1.3	135	95	762	11	yes	op	op & cash	?
FOR-extensive cocoa w/ fruit	1.3	136	46	1,143	15	yes	op	op & cash	?
FOR-extensive cocoa w/o fruit	1.3	123	43	442	6.2	no	op	cash only	?
SF-oil palm	1	209	71	762	11	yes	op	op & cash	?
FOR-oil palm	1	196	73	442	6.2	yes	op	op & cash	?
Community-based forest	5,000								?

n.b.: op = food security from consumption of own production

Among the perennial crop systems, where comparisons are more relevant, the most labor-intensive systems were intensive cocoa with and without fruit trees, at 109 and 106 person day’s ha^-1 yr^-1, respectively. Extrapolation domains for these relatively labor-intensive systems are those locales where labor markets function and/or where rural population densities are high. Examples of relatively intensive cocoa systems in Cameroon are to be found in the Moungo, Fako, and Meme divisions of the Southwest province and the Lekie division of the south-central portion of the state. All of these divisions have relatively high population densities. The extensive cocoa systems were the least labor demanding, at roughly two-thirds the labor requirement of the intensive systems, while the oil palm systems were intermediate between the two types of cocoa systems.

Food Security

The capacity of the systems under examination to contribute to both national and household food security is a concern of both household and national decision-makers. At the household level, food production may be directly consumed, or alternatively, export crops and food production may be sold and the revenues used to ensure food security. The latter option requires the existence of secure and reliable food markets in rural areas. At the national level, the foreign exchange earned by export crops can be used to finance rice and wheat imports which are a growing component of the urban food basket. At the national level, the food surpluses generated from the mixed groundnut, oil palm, and Cucumeropsis/plantain systems contribute more significantly to urban food supply than do cocoa systems.

In many areas of the Congo basin, rural food markets either don’t exist or, if they exist, are often periodic and access is limited. As a consequence, most households rely on their own production for the vast bulk of their food intake. Under such conditions, the contribution of a system to household food subsistence goals becomes important. In essence, the mixed food crop field is the household granary and is usually planted in the benchmark. Subsistence objectives are paramount, and commercial objectives are secondary. The same is largely true of the Cucumeropsis/plantain field, although in some areas this field is planted by farmers with primarily commercial objectives in mind.

Potential caloric and protein supply from each system was estimated. Again, the assumption problem of zero production during the fallow period reduces the per hectare figures significantly for the two slash-and-burn systems.[3] Nonetheless the caloric and protein output of the mixed groundnut field was the highest of all the systems (Table 17). Among the perennial crop systems, cocoa with fruit had the highest values, due largely to the significant contribution of avocados and African prunes, which have high fat contents. This system, with an estimated annual provision of 1.5 million kilocalories, would provide sufficient calories for 585 person-days at a rate of 2,500 calories consumed per day. This is more than double the caloric value of the other systems.

The production from oil palm systems plays a key role in national food security. The importance of palm oil in the typical Cameroon diet is high, a fact which is recognized by government trade policy prohibiting oil palm exports during the dry season when production declines to ensure urban supply at low prices (lowering producer price and profitability). Oil palm is also the major source of cooking oil among forest dwellers in the Congo basin, and many producers who have adopted small holdings of hybrid oil palm often cite meeting household oil demand as a factor in their adoption decision.

Institutional Requirements

In conjunction with the above factors, the adoption potential of a given land use system is conditioned by the level of institutional and organizational development, as well as infrastructure. In a liberalized economy, the functioning of market institutions is a key determinant in whether a household will be able to adopt an intensive system of production. Cameroon producers are still adapting to the new economic reality of liberalized input markets that came about in the early 1990s. The intensification gradient in the Forest Margins Benchmark is also a function of the level of institutional development. In the more densely populated portions of the benchmark and the Congo basin, markets and communication infrastructure tend to be better developed. As a result, agriculture is more commercially oriented and diversified. Better functioning, more competitive markets in conjunction with better infrastructure, result in significantly lower marketing margins and consequently, higher producer prices and lower input prices. However, a major handicap for producers across the benchmark in areas of both well-developed and underdeveloped market institutions is the near nonexistence of capital markets in rural areas. When an unexpected financial crisis arrives (e.g. illness, death, etc.), liquid assets that might have been set aside for purchasing agrochemicals are spent, and production suffers. The abandonment of tomato fields in mid season because of “manque de moyen” is not an uncommon occurrence.

A panel of experts familiar with rural institutions in southern Cameroon evaluated the institutional constraints facing the spread and/or improvement of specific land use systems. The panel ranked these constraints on a scale of no constraint, possible constraint under certain conditions, or clear constraint. There were a total of 10 market and non-market institutions evaluated: input supply, output, labor, and capital markets; information requirements; regulatory issues; local environmental impacts; property rights; equity biases; and social cooperation requirements.

The market institutional requirements (inputs, outputs, labor and capital) of each of the 9 land use systems were evaluated in terms of three criteria—dependence on a particular market (e.g. input-intensive systems require credit markets), the current state of market development in southern Cameroon, and the possibility of using social cooperation as a substitute for market imperfections or failures (e.g. cooperative marketing). The LUSs vary with regard to purchased input intensity and, thus, adoption domains are likely to differ according to input market development (Tables 18 and 19).

The intensive cocoa systems are the most dependent on the reliable supply of agrochemicals. Intensive cocoa systems with fruit trees also presume good access to urban fruit markets. The oil palm systems are dependent on fertilizer inputs and the multiplication and distribution of hybrid palm varieties. Oil palm production also requires further transformation. The types of post-harvest processing technology available include artisanal methods requiring almost no capital investment, small scale oil presses requiring intermediate levels of capital investment, and large scale industrial processing with high capital requirements. The development of this industry using a smallholder approach will require cost effective methods of transforming the oil.

Land tenure is still largely by customary right, although there is an evolution towards more individualistic ownership patterns and away from communal control of land, along the gradient from low to high population areas. There is a much higher incidence of official land disputes in areas of high population. There is, however, little official titling of land due, in part, to the high transaction costs of doing so (estimated at over $500 at current prices). Commercial rights to timber belong to the state, with the exception of timber cut for the landholder’s own use. The minimal economic incentives faced by farmers for maintaining timber species on the landscape do not provide a competitive alternative to slash-and-burn agricultural use.[4] However, the 1994 forestry law has established a statutory framework through which a village can gain communal commercial rights to timber within “community forests” of 5,000 ha. Land tenure and property rights raise issues for systems requiring access to new forest lands for planting perennial tree crops. In certain parts of the benchmark this land has not been appropriated at the household level but instead remains within the domain of the larger family clan and requires negotiation within the clan unit. These issues do not affect the implantation of perennial systems on existing fallow lands for which customary tenure rights at the household level are relatively robust.

Knowledge gaps and diffusion are probably most critical for the oil palm systems, as the production of commercial hybrid oil palm is just in the process of being introduced at the household level (Tables 18 and 19). There is currently a World Bank-sponsored training and visit extension program being implemented in Cameroon (as well as in many other African countries) that will hopefully reinvigorate a moribund extension service. The encouraging development of local farmer groups, farmer federations, and grassroots NGOs throughout southern Cameroon offers an additional avenue for interfacing the knowledge generated by agricultural research and rural development.

Equity Biases

There are two major types of equity issues surrounding these systems which we evaluated qualitatively. The first is the issue of an increasing concentration of wealth and land holding. Among the systems evaluated, this is mainly a concern for oil palm systems, where economies of scale in both production and transformation seem to exist (Table 19). Hybrid oil palm is a crop that grows uniformly and can, therefore, benefit from specialization in time and task among work crews. There are also significant economies in processing that are beyond the reach of small farmers. In the long-run, there is a question as to whether smallholder, production, which is typically reliant on family labor, can remain competitive with large, scale plantations. To the extent that these systems are also meeting subsistence needs, the issue of economics-to-scale is less likely to be an impediment to the continued adoption of these systems.