FOOD PRICE VOLATILITY IN CAMEROON: determinants, transmission and consequences

Gilles Quentin Kane

Working Papers from African Economic Research Consortium

Abstract: This thesis analyzes food price volatility in Cameroon. First, we examine the determinants of food price volatility in Cameroon. Second, we analyse the transmission of food price volatility in Cameroonian markets. Third, we analyse the supply response to price and volatility for some major staple crops grown by agricultural households in Cameroon. Fourth, we analyse the welfare effects of food price volatility on Cameroonian households. Using diverse econometric methods, results show that food price volatility in Cameroon is determined by the volatility of the price of other local agricultural crops, and not by factors coming from international markets such as volatility of crude oil price and price volatility of import of cereals. This result is confirmed in the case of rice, where there is no price volatility transmission between the world market and Cameroonian markets. Furthermore, results also indicate that producers respond to price volatility by principally increasing their surface area for cultivation and reducing investment in agricultural inputs to improve yield. Finally, poor households are the most affected by food price volatility, with welfare losses from food price volatility depending on the extent of the price hikes. Two main policy lessons are drawn from this thesis. Firstly, it may be important to implement more specific development projects based on commodities such as local cereals, roots and tubers and find ways to improve the efficiency of existing development programs in the agricultural sector. Secondly, knowledge capacity on how household structure and spatial repartitioning of households are affected by changes in food prices, and the responsiveness, can be necessary to implement efficient policies to fight against hunger and poverty

Date: 2018-09-10
Note: African Economic Research Consortium
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