Rice Production Response to Trade Liberalization in Cameroon

Agriculture remains the mainstay of Cameroonʹs economy, and rice an important cereal crop for producers and consumers. Significant proportions of the population depend on rice production for their livelihood. Cameroon deregulated its economy and liberalised its trading system including agricultural trade in the 1990s. This study estimates supply response coefficients, and establishes the importance of policy schemes over the years. Relative world price to producer price and substitute crop price combine with variations in weather and government expenditure on agriculture to significantly account for 61.7% of the variation in production. In the short-run, the elasticities of world price to domestic price ratio on production range from 0.235 to 0.287. The significant positive relationships suggest that world market price for rice has complementary direct relationship with local rice production in Cameroon. Governmentʹs incentive schemes for investments in agriculture and export activities encourage supply development. For rice production to remain relevant in the socioeconomic development of Cameroon, the sub-sector must take advantage of local and international demand.