Oil palm expansion among non-industrial producers in Cameroon: Potentials for synergy between agro-economic gains and ecological safeguards

Abstract

Regardless of the environmental and socio-ecological implications of oil palm cultivation, oil palm is considered one of the most important oil crops in the world because of its high production efficiency which has seen a marked increase in the area under cultivation. While previous studies have analyzed the implications of this increase in cultivation on various socio-economic and environmental indicators, less is known about the drivers and constraints of production, especially concerning economic and profitability motives. In this study, we used a survey of non-industrial producers in the humid rainforest zone of Cameroon to assess the drivers of oil palm production. We employ a double hurdle model in a two-step regression framework to characterize oil palm production by smallholder farmers, and the extent of oil palm production. For comparison purposes, a Tobit model is also estimated. We find that different socio-economic and institutional factors have a differential relationship with both the likelihood of cultivating oil palm and the area under oil palm cultivation. Key among these are expected profitability measures such as market orientation and access to market information, land tenure security, and access to improved farm inputs. Some aspects of transaction cost and labour availability also come into play in determining oil palm production. Across a range of different farm classifications related to the scale of production, we find that oil palm cultivation is prevalent among all farm groups, although highly predominant in large farms. We also show that our results are robust over several linear specifications such as the linear probability model and the lasso linear model. Our study thus provides evidence of several entry points for improving the oil palm sector for non-industrial producers while safeguarding the environment.