Adoption of improved cocoa technologies in Cameroon
This thesis evaluates the short run profitability and the long run sustainability of improved cocoa production technologies in Cameroon. The proposed new technology combines shade reduction, fertilization and improved pest control. The simulations consider two main assumptions, a moderate increase of farm gate prices, and the availability of the new technology. ^ The analysis is developed in three stages. First, a static mathematical programming model based on an econometrically estimated production function examines the adoption and the profitability of the new technologies. In a second stage, the long run sustainability of farmers' incomes with the new technologies is evaluated under three price scenarios (pessimistic, cyclical, and optimistic). Finally the third stage focuses on the impact of introducing the new technology on the choice between intensive and extensive (deforestation) development. ^ The main findings of the study are summarized as follows. First, at the current low price, neither improved pest control nor the new technologies above are profitable. With long run falling real prices, farmers have been decreasing their pest control. Second, there are externalities associated with pest control. The returns to insecticide increase with the application of insecticides in surrounding fields. Third, if price increases, fertilization is adopted, and pest control intensifies across all the farms. As a result, farmers' incomes increase. Fourth the new technology is financially sustainable in the long run. Under reasonable price regime, farmers' incomes remain above a minimum income level with the new technologies. Moreover, with new technologies, replanting rates increase thereby slightly reducing the deforestation process. ^ In sum, the current low input-low output technology results from the current low farm gate prices and previous state interventions. The findings indicate that farmers can move out of this position if cocoa price recovers moderately so that improved technology will be adopted. The results indicate that there are high payoffs from the new technology. Failure to improve soil fertility while other countries do so may well lead to loss of future market share. The large externalities associated with pest control also indicate the importance of encouraging community adoption, including a potential public sector role. ^
Major Professor: John H. Sanders, Purdue University.