CHAPTER ONE: INTRODUCTION

1.1 Background of the study

In most African countries, agriculture is the engine of economic growth which is considered as the cornerstone of poverty reduction (Grewal and Grunfeld, 2012; FAO, 2012). Approximately 65 % of African countries rely on agriculture as a primary source of livelihood, agriculture accounts for 30 to 40 % of Africa’s total gross domestic product (GDP), and almost 60 % of its total export earnings. Moreover, it employs 175 million people directly. (AGRA, 2015).

In Cameroon, agriculture remains the backbone of its economy; it contributes to more than 20 % of its GDP and its export revenue employing up to 60 % of its active population 75 % of which are women. The agricultural sector equally provided 323 billion FCFA of added value in the third quarter of 2019 to the Cameroon economy. The Cameroon government ‘s “Growth and employment strategy of 2009-2019” identifies the agriculture sector as the engine for economic growth, job creation and recognizes the need for agricultural diversification, increased productivity, and large-scale investments in the sector (GAFSP, 2019: TE, 2020).

Cameroon has a lot of agricultural potential because of its location, which provides an ideal climate for the cultivation of both cash and food crops (World Bank, 2012; GAFSP, 2019). Despite these potentials, the country still spends huge sums of money to import foodstuff. In 2011, the Ministry of Finance estimated that the government spent close to 500 billion FCFA (approximately one billion dollars) on the importation of foodstuff such as flour, rice, millet, sorghum, and fish. The dependence of the country on the importation of large quantities of food has made the economy very vulnerable to external price shocks as was the case in 2008 (World Bank, 2012). The situation may even be worse as a result of the COVID 19 pandemic which broke out in China in December 2019 as the World Bank estimates that the pandemic will drive Sub-Saharan Africa towards a first recession in 25 years (World Bank, 2020).  As such, there is need for the government to resolve the problems faced by the sector for agricultural growth because growth in the agricultural sector contributes immensely to poverty reduction (Gallup et al., 1997; Thirtle et al., 2001; Devkota and Upadhyay, 2013; Dzanku, 2015).

Despite the progress made to reduce poverty over the past decades, the number of people living in extreme poverty remains unacceptably high in the world (World Bank, 2017). In 1990, the World Bank estimated that 1.1 billion people in the world lived below $1 a day poverty line. When the poverty line was revised to $1.25 a day, Chen and Ravallion (2008) indicated that in 2005 worldwide, there were 1.4 billion people who lived on less than $1.25 a day. More so, progress towards poverty reduction has been slower with higher poverty lines.  There were 2.2 billion people in the world living on $ 2 per day in 2011 with a slight decline from 2.7 billion in 2001 and 2.59 billion in 1981 (World Bank, 2013a). When the new international poverty line was revised in October 2015 to 1.90 $ purchasing power parity (PPP) adjusted dollar a day per person, the (World Bank, 2015) estimated that 767 million people in the world lived on less than US $1.90 a day in 2013 that is (10.7 %) down from 881 million in 2012 (12.4 %) and 1.85 billion in 1990 (35 %).

Considering the poverty line of $1.25 per day in developing countries, Chen and Ravallion (2008) indicated that in 2005, about 4.09 billion people lived above $1.25 per day while about 1376.7 million people (25.2 %) lived below $1.25 per day. According to the World Bank (2008), the number of people living below $1.25 a day in Sub-Saharan Africa (SSA) increased significantly from 204.9 million in 1981 to 386 million people in 2008 (that is an increase of over 88 %).  With the new revised international poverty line of 1.90 $ purchasing power parity in developing countries there were 896 million poor people who lived on $1.90 a day in 2013 compared to 1.95 billion people in 1990 and 1.99 billion in 1981indicating that there was a considerable decrease in the number of poor people over time using the $1.90 per day poverty line (World Bank, 2017).

In Cameroon, according to the International Monetary Fund (IMF) Country Report No. 14/213 of July 2014, despite a decade of economic growth, poverty rates have remained almost unchanged. After a large decline between 1996 and 2001 from 53.5 to 40.2 %, poverty incidence remained broadly constant with the poverty threshold in absolute value increasing slightly during the period 2004 and 2007 from 460 to US$ 520. Although, poverty rate decreased from 39.9 % in 2007 to 38.7 % in 2011 then to 37.5 % in 2014, this rate of decline was not commensurate with the pace of increases in population growth thus the number of poor persons has instead increased. The rural areas mostly witnessed increase in the poor population as the percentage of the poor population increased from 55 in 2007 to 59.2 % in 2011, accounting for more than one million additional rural poor. According to Reginos investigate (2015), the incidence of poverty level in the North West region of Cameroon has also remained high with a slight decrease from 52.5 % in 2001 to 51 % in 2011. Eighty per cent of the population of the North West region live in the rural areas and depend solely on agriculture as a means of livelihood.  A majority of foodstuff in the region comes from smallholder farmers and the unemployment rate in the region is 1.90 (Reginos investigate, 2015).

 In most developing countries, rural households depend on agriculture for their development and poverty reduction. There is evidence that agricultural growth is highly effective in reducing poverty (Devkota and Upadhyay, 2013; Dzanku, 2015). Gallup et al. (1997) reported that everyone per cent increase in per capita agricultural output led to a 1.61 % increase in the incomes of the poorest that make 20 % of the world’s population. Thirtle et al., (2001) from a major cross-country analysis of 40 countries in the world concluded that, an average of every one per cent increase in agricultural yields reduced the number of people living on less than US$1 a day by 0.83 %. Therefore, the agricultural sector stands in achieving economic growth, poverty reduction and posses’ potentials to meet the increasing demand for food and this can depend largely on the productivity of farm produce of smallholder farmers[1]. It is worth mentioning that smallholder farmers carry out most of the agricultural production in many developing countries on small farms as they account for more than 90 % of Africa’s agricultural production with about 90 % of these smallholder farmers having agriculture as their primary source of income (ADR, 2015). In addition, Africa has estimated 33 million smallholder farmers (AGRA, 2015; IFC, 2013) and approximately 80 % of Sub-Saharan African (SSA) farmers are smallholder farmers that contribute up to 80 % of Sub-Saharan Africa’s food supply (FAO, 2012). Consequently, Africa’s poor depend largely on agriculture for their livelihoods (IFAD, 2010) and therefore improving the profitability, productivity, and sustainability of the agricultural sector is argued to be the main pathway out of poverty in Africa (Christiaensen et al., 2011; Asfaw et al., 2012; Dawson et al., 2016).

Despite the great potential in agriculture to overcome poverty in Africa, the sector faces many challenges to develop, through the lack of agricultural inputs, improved technical knowledge, lack of capital to modernise the sector by farmers among many others. The lack of agricultural production inputs by smallholder farmers instigates them to look for various ways to guarantee household food security and maximize income from agriculture. Thus, in trying to find schemes for survival and in seeking growth, smallholder farmers gather resources from wherever available, whether through formal or informal systems (Tolno, et al., 2015). As a result, these farmers have resorted to a number of alternatives to boost up their farm production and improve their well-being. One of these options is by coming together and pooling their resources to work together as members of a farmer organization (FO). The justification arises from their potential in realizing pro-poor economic growth and sustainably empowering smallholder farmers. (Fischer and Qaim, 2012a, 2013). Olwande and Mathenge, (2012) indicated that the forming of FOs among smallholder farmers has proven to be one of the means for smallholder farmers to overcome market imperfections. Strong and dynamic FOs can provide opportunities to farmers to play their role effectively in a market economy and benefit from it (Millie et al., 2006).

In Cameroon, the existence of farmer organizations [2]dates as far back as the colonial period [3](Prod-Homme, 1995). According to Achancho (2012), during that period, farmer organizations were in charge of the collection, sale of goods for exportation and consumption, assisting of poor farmers by providing loans for the realisation of infrastructures and purchase of farm tools for FOs which were affiliated to savings and loan schemes. After independence in the 1960s, the state created cooperatives as alternative organizations for agricultural production and as principal source of foreign currencies through the exportation of agricultural product produced by cooperatives, necessary for economic and social development (MINADER, 2015).   From the 1980s, due to the economic crisis that set in, the state could no more handle the cooperatives and there was the transfer of responsibilities to the farmers.  Thus, farmers were encouraged to create many farmer groups (Common initiative groups (CIG) and  farmer cooperatives) to ease transfer of responsibilities (Mercoiret, 1996).  This was done by use of new laws that were put in place to regulate the sector notably Law No. 90/053 of 19 December 1990 on freedom of association, and Law No. 92/006 of 14 August 1992 on cooperative societies /common initiative groups (CIG) and programs or projects to work with them. The Ministry in charge of agriculture and rural development was in control of these farmer organizations according to the 1992 law. Since then the aim of the government has been to encourage the creation of a large number of farmer organisations to enable the farmers to work together to increase agricultural production and ameliorate their revenue. Thus, according to Oyono and Temple, (2008), this objective has been attained by the government as 1, 23,305 registered farmer organizations were created in 2012. Out of this number, 95 % had the status of CIGs, and 1.5 % cooperatives (Fongang, 2012) 

In this context, the North West region was not left out, according to 2015 statistics there were 16,425 registered Farmer organizations in the region (MINADER, 2015) that have to play both social and economic roles for the benefit of the farmers. Expected benefits to farmers include the provision of farm inputs, market outlets, technical knowledge, as well as social motives and finance (North West Farmers organisation (NOWEFOR) annual report, 2015). These are the motivations for smallholder farmers to join these farmers’ groups. However, scanty literature exists on the performance of such farmer groups in increasing agricultural development in general and poverty reduction among members in the North West region in particular. This study will attempt to assess the contributions of these farmer organizations on poverty alleviations for smallholder farmers in the North West region of Cameroon. The understanding of their contribution will lay a framework to the amelioration of the organisation of the sector and how these FO can better play the role expected of them.           

1.2. Statement of the Problem

FOs such as farmer unions, farmer cooperatives, farmer groups and commodity associations, as well as rural finance institutions, can play a key role in the development of rural areas in developing countries as well as in fighting poverty. According to Pinto (2009) for instance, the role of agricultural cooperatives in rural development means the role of agriculture in development.

In the same light Bachke, (2009) holds that FOs is a key tool to improve the living conditions of resource-poor farmers in developing countries and that belonging to a FOs has positive effect on smallholder farmers’ income. FOs essentially exists to offer services and inputs to their members (Vilas-boas, and Goldey, 2005). Membership to these FOs tends to increase the level of agricultural production and yield economic benefit to farmers as well as promote their general welfare (Oyeyinka et al., 2009; Mwaura, 2014). Smallholder farmers who are generally poor, use labour intensive systems in their production, and do not have access to expensive inputs like fertilizers, chemicals and machinery. It becomes easy for them to have access to these inputs if they come together in groups (VanZyl and Vink, 2000).  For   the International Fund for Agricultural Development (IFAD, 2012) farmers find it difficult to ensure household food security or income given the constraints of farm size of less than two hectares and access to technical modes of production for 85 % of all farms in the world. Therefore, the establishment of cooperative groups or FOs is a step towards creating a reliable local enterprise that may have more bargaining and purchasing power for its members. Another benefit from FOs by smallholder farmers is that, they can generate more income in a number of ways such as, using improved cultivation techniques and improved seed, reducing postharvest losses, and having good access to markets. As individual entrepreneurs, they may not have the knowledge or capital to change the way they operate. The collective strength of an organization can help the individual members to become more competent, if the FOs services match the members’ needs (Moumouni et al, 2009)

According to Karim (1999) FOs are always effective in providing their members with better access to research for innovations, extension, inputs and marketing of their products and are also, key organizations in shaping livelihood opportunities and outcomes for their members.  Bijman and Ton, (2008) stated that FOs like producer organizations can give smallholder farmers a political voice, by engaging policy makers in policy implementation. These farmer groups may lobby local, regional and national policy makers on behalf of their members.  In addition, such organizations, particularly those at community level frequently combine economic, political and social functions. These FOs can provide farm inputs and credit to members, market their products, offer services to their community and carry out advocacy activities.

  With respect to agricultural development and poverty alleviation, FOs also play a vital role in dealing with the systemic causes of poverty, because they give men and women practicing agriculture the opportunity in shaping pro-poor policies. By articulating farmers,’ interests to public and private institutions, FOs encourage those institutions to shape their strategies, products, and services to farmers’ needs. Due to a supportive policy framework, FOs are well able to drive balanced social and economic development (AgriCord, 2010).  According to the Overseas Cooperative Development Council (OCDC, 2007), the way out of poverty via transformational development has three pathways economic, democratic and social pathway and FOs are unique in addressing the three simultaneously.  Economically, the cooperative business model has helped millions of low-income individuals in developing countries to improve their incomes. Democratically, cooperative members learn first-hand the principles of democratic governance, transparency and member participation. Socially, cooperatives increase trust and solidarity amongst members, leading to social wellbeing and stability; Farmer cooperative organisation or FO play the same role in the agricultural sector.

The World Development Report, (2008) states that FOs like producer organisations are key actors in agricultural development. The report argues that they are a major part of societal re-establishment, one that uses collective action to strengthen the position of smallholder farmers in the markets for farm inputs and outputs. By reducing transaction costs, strengthening bargaining power and giving smallholder farmers a voice in the policy development, as such FOs are essential building block for agricultural development agenda.

Studies carried out in West Iran on the success of agricultural cooperative, it was concluded that farmer cooperative organizations have great potentials in agricultural development in particular and rural development in general. (Verhofstadt and Maertens, 2015) Other studies carried out by Tolno et al (2015) on the economic role of FOs in enhancing smallholder potato farmers’ income in Middle Guinea equally concluded that FOs were indispensable in increasing farm production and incomes of smallholder potato farmers in Guinea and that they had potentials in realizing pro-poor economic growth thus, poverty reduction. Also, in similar studies carried out by Fapojuwo, et al (2012) in their study on the “contribution of cooperative organizations to poverty alleviation in Yewa North Local Government State of Nigeria”, brought to light the fact that members of cooperative organisations have access to cooperative loans which they could use to create employment, improve their business enterprises, generate income and improve their standards of living.  In this regard, cooperative organizations can significantly contribute to poverty alleviation. In addition, different studies carried out by other researchers (e.g. Leistritz, 2004; Wanyama, et al., 2008; Getnet and Anullo, 2012; Ito et al., 2012; Verhofstadt and Maertens, 2015) all confirm the vital role farmer cooperatives play in the reduction of poverty and in ameliorating the livelihood of smallholder farmers in other African countries and the world as a whole.

Due to the positive role FOs play, donor organizations, governments and researchers are more interested in FOs as institutional mediums to improve smallholder farmer’s agricultural performance in the world (Bernard and Spielman, 2009; Fisher and Qaim, 2012a, 2012b).  Most especially, International organizations such as the United Nations (UN), the World Bank and the International Labour Organization (ILO) are persuaded that agricultural cooperatives or organisations can play an important role in achieving sustainable rural development. Yamusa and Adefila, (2014) and ILO (2003) noted that FOs are by nature concerned with democratic and human values as well as caring for the environment. They are also catalysts for social organization and cohesion (Calkins and Ngo, 2005).

In Cameroon, Jiotsa et al (2015) in cooperative movements in the Western Highlands of Cameroon indicated that due to the socio-economic objectives and organizational structure, cooperative organisations in the Western Highlands of Cameroon have contributed and will continue to contribute to the growth of social capital, social integration, fight against poverty and unemployment. 

The large number of FOs in the form of CIGs, cooperatives and federation of cooperatives and CIGs in Cameroon in general and North West region in particular is proof of the government’s success policy in encouraging the creation of FOs for its evident importance to the agricultural sector development (Oyono and Temple, 2008).   By law, these farmers are to provide yearly activity reports to the Ministry of Agriculture and Rural Development (MINADER) as proof of their existence for follow up by agricultural extension agents. According to MINADER (2015) report, out of the 16, 425 FOs registered in the region not up to 1% of these groups submit yearly activity reports. This issue is preoccupying as there is no evidence of activities carried out by these FOs with farmers as such no way to evaluate their impact on the farmers or their role on poverty alleviation. In order to succeed in second-generation agriculture as planned in the rural strategic development document and lead Cameroon to emergence in 2035, there is need to promote and monitor the activities of FOs.  This according to most international organizations like the United Nations (UN), the World Bank and the International Labour Organization (ILO) can play an important role in achieving sustainable rural development through increase agricultural production, which is the backbone of agrarian economy.

There exists scanty literature on the role played by FOs on poverty alleviation on Smallholder farmers in the Northwest Region or on the impact of their activities on farmers registered under them, therefore the need to carry out this study. From the foregoing, the questions being asked was, do the large number of farmer groups in the region really work with farmers especially smallholder for their interest? Do farmers actually get the expected benefits by belonging to these groups? Are FOs properly managed to be able to achieve the expected benefits? This study titled ‘The role of Farmer Organizations for poverty alleviation amongst Smallholder Farmers in the North West Region of Cameroon’ will attempt to answer these questions and evaluate the contribution of FOs to farmers and their communities and their role in poverty alleviations in the North West region which can lay a framework to the amelioration of the agricultural sector.

From the foregoing, the following research questions are elaborated.  The main research question was; To what extent do FO contribution to poverty alleviation of smallholder farmers in the North West region of Cameroon.

Specifically:

1. What are the different types of FOs, their characteristics and their contribution to poverty alleviation of smallholder farmers in the North West Region of Cameroon?
2. What are the characteristics of the members of these FOs and their influence on the activities of FO for poverty alleviation of smallholder farmers in the North West Region of Cameroon?
3. What are the social contributions of FOs and effect on poverty alleviation of smallholder farmers in the North West Region of Cameroon?
4. What are the economic contributions of FOs and effect on poverty alleviation of smallholder farmers in the North West Region of Cameroon?
5. What are the effects of the activities of FOs on community welfare in the North West Region of Cameroon?

1.3 Research Objectives

The research objective of this work was to:  Evaluate the extent to which FOs contribution to poverty alleviation of smallholder farmers in the North West Region of Cameroon.

Specifically, the research seeks to:

1. Characterize the different types of FOs and their contribution on poverty alleviation of smallholder farmers in the North West Region of Cameroon.
2. Analyse the characteristics of the members of these FOs and their influence on the activities of FOs for poverty alleviation in the North West Region of Cameroon.
3. Assess the social contribution of FOs to poverty alleviation on smallholder farmers in the North West Region of Cameroon.
4. Evaluate the economic contribution of FOs to poverty alleviation on smallholder farmers in the North West Region of Cameroon.
5. Analyse the effect of the activities of FOs on community welfare in the North West Region of Cameroon.

1.4 Research hypothesis

In order to attain these objectives and answer the above questions, the following hypotheses was to be verified; the hypothesis, reads that:  FOs contribute to a certain alleviating poverty of smallholder farmers in the North West Region of Cameroon

H₁:  The different types of FOs contribute of different magnitude to poverty alleviation of smallholder farmers in the North West Region of Cameroon.

H₂:  The characteristics of members influence the activities of FOs for poverty alleviation in the North West Region of Cameroon.

H₃: FOs contributes socially to poverty alleviation of smallholder farmers in the North West Region of Cameroon.

H₄: FOs contributes economically to poverty alleviation of smallholder farmers in the North West Region of Cameroon.

H₅:  The activities of FOs in the North West Region of Cameroon contribute to community welfare and poverty alleviation.

[1] Smallholder farmers are farmers who farm cropland on farm size less than or equal to two hectares. (FAO, 2010; World Bank, 2003). Smallholder farmers are also defined, as having limited resources in relation to other farmers in the agricultural sector (Dixon et al 2003)

[2] Couturier et al. (2006; 2013) defines a FO as “a collective entity of farmers in a village or a number of contiguous villages who have come together with common goals for economic or social benefits related to agricultural activities”

[3] The Colonial period in Cameroon started from 1884 during the German annexation of Cameroon. After the First World War in 1914, when Germany lost her African territories, Cameroon was administered as a trusteeship territory under the League of Nations. Cameroon was partitioned between the French and the British in 1919 with the French taking 80 % and British 20%. The British colonised Southern Cameroon or English Cameroon as part of Nigeria and French colonised Eastern Cameroon or French from 1919 to 1960 when they were granted independence.