Public Expenditures And Agricultural Growth In Cameroon

The objective of this study is to evaluate the impact of public financing of the agriculturalsectorinCameroononagriculturalproductgrowth.Agriculture was the main source of growth and foreign exchange until 1978 when oil production replaced it as the cornerstone of growth for the formal economy.In 2004,agriculture contributed 44 percent to GDP.Agricultural development and productivity declined from neglect during the oil boom years of the early 1980 s.Agriculture was the principal occupation of 56 percent of the economically active population in 2003,although only about 15.4 percent of the land was arable.The most important cash crops are cocoa,coffee,cotton,bananas,rubber,palm oil and kernels,and peanuts.The main food crops are plantains,cassava,corn,millet,and sugarcane.Prior to the economic crisis of the late 1980 s,Cameroon’s development strategy efforts were managed through a series of five-year Development Plans.In these,agriculture was described as the priority sector and the government intervened massively in rural development,both directly through the establishment of state-owned agro-industries,rural corporations and settlements,and also indirectly through various support programs.First,the statistical analysis showed a positive relationship overtime between the public spending allocated to the agricultural sector and the growth of agricultural production in Cameroon.Indeed,an increasing in public agricultural expenditure is followed by an increase in the level of production,the following periods.In addition,autocorrelation tests shows a relationship between output and its past values and a relationship between public spending and their past values.Second,this correlation was tested using an error correction model(ECM)from the 1974 to 2016 data.Ordinary least squares(OLS)estimates,showed that the increasing of public expenditure results in an increasing in agricultural production in the next period,although less than proportionally(around 0.3% for a 1% increase in public expenditure).This effect spreads over two years before fading.Thus,public financing of the agricultural sector seems to contribute to the growth of agricultural production inCameroon.