Abstract

The study seeks to examine allegation of producer exploitation in the marketing systems of selected food crops (cocoyam, plantains, sweet bitter leaf, maize, cassava and banana) in the Buea Municipality. The study specifically assessed the marketing cost and marketing margins of producers, wholesalers and retailers, examine the price spread and producers share of ultimate consumer francs and assess the efficiency of the market. To achieve this, the study adopted a cross- sectional descriptive survey design, whereby structured questionnaires were distributed to 246 conveniently selected farmers, wholesalers and retailers.

The quantitative data were analyzed using descriptive statistics such as counts, frequency, mean and standard deviation using SPSS 20 software. Standards techniques were used to assess the marketing cost, margins and price spread while the Acharya’s model of was used to assess marketing efficiency. The study found out that wholesalers as compared to producers and retailers have the lowest cost ratio and high profit margin for invariably all the selected food crops. The study also found out that price spread was high for all the products and producers received 56.8%, 32.7%, 47.7%, 40.24%, 53.5% and 36.43% of the consumer francs for cocoyam, plantains, sweet bitter leaf, maize, cassava and banana respectively.

Finally, the study indicated the marketing efficiency was moderate for cocoyam (60.7%), maize (62.1%), and cassava (60.9%), almost moderate for sweet bitter leaf (49.3%) and low for plantains (35.1%) banana (41%). The study concluded that there an empirical base for allegations of producer exploitation in the marketing of selected food crops given that producers as compared to wholesalers receive a small share of consumer francs which are further eroded by high cost incurred in marketing the produce. The study recommended that to increase producers share in the consumer price, the government should take proactive steps to reduce various cost streams along the food production and marketing chain.

 CHAPTER ONE

INTRODUCTION

1.1 Background to the study

Agriculture production and marketing constitute the lifeblood of most economies in the developed and developing world ((Balgah and Buchehenrieder, 2011; Abass et al., 2013; United States Department of Agriculture, 2017). This is particularly so in Sub-Saharan Africa, where agriculture provides the primary source of food, income and employment for the majority of the populations.

According to FAO (2000), 67% of the populace are involved in agriculture, which accounts for 39.4% of the GDP and 43% of all exports. Over the years, agricultural commodity marketing value chains in developing and transition countries have undergone tremendous changes (Swinnen and Maertens, 2006). In the 1960s, the marketing chains for agricultural and food commodities of a vast share of poor and middle-income countries, covering a large percentage of the world’s agricultural areas and farmers, were state-controlled (Swinnen and Maertens, 2006).

This was most extreme in the Communist world, spreading from Central Europe to East Asia, where the entire agro-food system was under strict control of the state. This was equally the case in African, Latin American, and South Asian countries. In many of these countries, the state played an important role in agricultural production and marketing in the decades after independence from the colonial power. Governments in Sub-saharan African and South Asia were heavily involved in agricultural marketing and food processing through the creation of marketing boards, government-controlled cooperation and parastatal processing units. These monopolistic institutions determined the price for most basic food and essential cash crops (Swinnen and Maertens, 2006).

However, this system of state intervention and control underwent tremendous changes in the 1980s and 1990s following the liberalization process that swept through most of these countries, (International Fund for Agricultural Development, 2003). These reforms led to the privatization of the state enterprises and the emergence of private sector entities in food production and commercialization, with profound implications for local level operations. This new dispensation contributed to changing the locus of trade and exchange and facilitated the emergence of the middlemen (Birthal et al., 2005). With the quasi-abolition of the marketing board, farmers were no longer required to aggregate their produce at the local cooperatives for inspections and purchase by the agent of the marketing board.

Increasingly middlemen, acting as buying agents for larger corporations met farmers at their farms. This eventually led to the emergence of farmgate or farm- markets in the produce commodity marketing chains in most African countries. Within this liberalized dispensation, price fixing for commodities was supposedly left to the whims and caprices of Adam Smith’s invisible hands. But in most states, price fixing became the preserve of powerful buying agents or middlemen of wealthy multi-national corporations with detrimental effects on the producers and low-income farmers.

In Cameroon, agriculture and the exploitation of natural resources are the driving force for the country’s economic development (Lambi and Molua, 2009). The sector employs 70 percent of the workforce while providing 42 percent of its GDP and 30 percent of its export revenue. Before the liberalization process in the 1980s and 90s, the government played a dominant role in agricultural markets in Cameroon (Dewbre and De Battisti, 2008).

Both the prices farmers received for their output and those they paid for purchased inputs were primarily influenced by the parameters of government procurement, subsidy and trade policies (Dewbre and De Battisti, 2008). Under this state control, agricultural production increased steadily from 1961 to 1990s (FAOSTAT 2012) and the country attained an excellent level of food security, even serving as the food basket for some countries in the central African sub-region (Sasson, 2012). But with the advent of the Structural Adjustment Program (SAP) in the 19980s and 90s and the need to downsize government social spending, agriculture production and marketing was liberalized, given way to new participants and pricing dynamics.

While there are divergent opinions, many development observers have opined that this new market dynamics have introduced significant distortions in the food production and marketing chain in the country. Within this current dispensation, it is opined that private traders or middlemen are making excess profits at the expense of rural producers and considerably reducing the efficiency of agricultural marketing systems (Hollier, 1985). They argue that this new pricing dynamics, compounded by other global environmental changes, have constrained the ability of small-holder farmers who constitute 70 % of the farming population in Cameroon (INS 2010) to meet the ever- increasing food need of the burgeoning population (Thornton et al. 2011; Bindraban et al., 2012) and was a critical factor in the 2008 food crisis which led to several weeks of social unrest and civilian casualties in Cameroon’s main cities (Lagi et al. 2011; Tittonell et al., 2012).

It was in an attempt to assess these allegations of producer exploitation that this study on the pricing dynamics and efficiency of markets for some widely produced and consumed food crops in the Buea Municipality was undertaken. The study is predicated on the fact that food crops pass through several agencies before it reaches the final consumer and that each intermediary is bound to incur a cost for his services performed and also expects a profit margin in that transaction. Therefore it is worthwhile to examine as to what the producer and other intermediaries receive a share of the consumer franc paid by the consumer. It is on the bases of the preceding that we can confidently establish grounds for producer exploitation and efficiency of the marketing systems.

1.2 Statement of the problem

As an essential administrative and educational hub in the South West Region of Cameroon, the Buea municipality is confronted with a rapidly rising population (INS, 2010). In spite of her rich volcanic soils, suitable for the cultivation of a variety of food crops (Manga et al, 2014), favourable climatic condition (Kimengsi and Nkwainguh, 2013) and readily available manpower (Business in Cameroon, 2018), ensuring the future food security of this increasingly burgeoning populace from local production constitute a veritable challenge.

If remedial measures are not taken, most households in the area will spiral into the food insecurity zones in the future. While some have linked the inability of local producers to meet the food need of the population to food crops pest and disease (Tandi et al., 2014), technical inefficiency of farmers (Tabe-Ojong and Molua, 2017), poor cultural and rudimentary practices of farmers (Ambebe, 2010), climate change and variability (Mbom, 2009) and rapid conversion of agricultural land to settlements (Kimengsi et al, 2016), very few studies have looked at the price incentives for local farmers and the marketing efficiency for selected food chains. This perspective is worth considering given that attractive farm gate prices for food crops, among other things, have been shown to make farming a lucrative livelihood strategy, increase acreage (farmland under cultivation) and consequentially increased local production in other areas (Hollier, 1985; Abdullahi and Igbekele, 2004).

However, anecdotal evidence opined that in Buea, middle-men absorb a significant portion of income in the food production value chain and leave the farmers with no price incentives to increase or even maintain local production, thereby reducing the efficiency of the market. However, very few empirical studies have been carried out to determine marketing margins, the proportion of the consumer price that various actors in the value chain receive and consequently the effectiveness of the marketing regarding incentives for participation to the different market actors. This price transmission analyses can effectively aid in asserting the (none) veracity of allegations of producer exploitation in the locality.

1.3 Objective of the study

1.3.1 Main Objective

The main objective of the study is to examine allegation of producer exploitation in the marketing systems of selected food crops (cocoyam, plantains, sweet bitter leaf, maize, cassava and banana) in the Buea Municipality.

1.3.2 Specific Objectives

The specific objectives of the study included;

 

1. To estimate the marketing margin of selected food crops (cocoyam, plantains, sweet bitter leaf, maize, cassava and banana) along the producer-wholesaler-retail value chain
2. To analyze the farmgate-wholesale-retail price spread and determinants for selected food crops
3. To evaluate the marketing efficiency for selected food crops

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