Livelihood Diversification and Cocoa Farmers’ Wellbeing in Rural Cameroon; an Empirical Analysis

Abstract

Cocoa farming is a key livelihood strategy for farmers in rural Cameroon, as studies have significantly revealed its contribution to the wellbeing of rural dwellers. Yet, the wellbeing outcomes of livelihood diversification for cocoa remains relatively less understood. This study analyzes the effects of livelihood diversification on the wellbeing of cocoa farmers in rural Cameroon using household data (N = 430) from six cocoa producing divisions in the South West Region. With the use of the Path Regression and the Principal Component Analysis (PCA), the study identified; access to credit, government assistance, temperature and rainfall, the use of chemical spray and fertilizers, and support from Non-Governmental Organisations (NGO) as welfare determinants. Climate variability (temperature and rainfall) has a significant negative effect on cocoa production, while the use of fertilizers and chemical spray has a positive effect on cocoa production and thus household income (welfare). The study revealed that diversification has a positive effect on cocoa production and a negative effect on household income. The study therefore recommends the initiation of a policy that will enable the establishment of a “risk management scheme” (insurance scheme) for cocoa farmers which would include the following: Production Insurance, which compensates cocoa farmers for lower yield due to adverse climate, wildlife, pest infestation or disease and other disasters; Agristability, which will compensate cocoa farmers for significant drops in their prices and farm income.