Will Cameroon's next coffee crop get a lift from its new, smartphone-enabled subsidy program? Last year in July, President Paul Biya launched a five-year, $76 million plan that will empower the government itself to purchase and distribute agricultural inputs like fertilizers and pesticides instead of giving financing directly to farmers.
Backed by the European Union, the plan is taking effect this year, in time for the 2022/2023 crop. The Arabica growing year will begin on October 1 while the Robusta season starts on December 1. Producers hope for an increase of at least 20% to 450,000 60kg bags, following two straight years of decline. Between 2001 and 2015, the nation's crop suffered a devastating slump of 5.3% per year, according to the Global Coffee Platform.
The nation ranked 8th in production among African countries during 2018–2020 and 7th among the continent's coffee exporters in the 2020/2021 marketing year, according to the International Coffee Organization. Its output of 375,000 bags for 2020/2021 was estimated at 0.38% of the global crop. Production today comprises 89% Robusta and 11% Arabica.
The subsidy plan will be run by the Cocoa and Coffee Sector Development Fund (FODECC), a government agency under both the Ministry of Trade and the Ministry of Agriculture. Edenred, a payment solutions company formerly known as Accor Services, will provide systems to manage the subsidy program, which covers growers of cocoa as well as coffee. A farmer with a smartphone can access the FODECC subsidies online by uploading an e-voucher via a mobile application.
“Cameroon’s government is setting up a digital earmarked payment system to easily, quickly, and securely grant agricultural subsidies,” said Daniel Ibrahim, Edenred’s director of business development for Africa
Apart from the subsidy, Cameroon will invest $28 million in training of farmers and $10 million in modernization of farms, according to Global Coffee Platform, over the next ten years.
The government expects to generate funds for the coffee subsidy scheme from the export duties and taxes levied on local coffee processing operations. Cameroon's GDP grew 3.5% in 2021 according to the World Bank, with an inflation rate of 2.27%, as reported by WorldData.info
The introduction of subsidy schemes to support coffee farmers not only in Cameroon but also Kenya and other African countries comes at a time when the International Monetary Fund (IMF) is pushing governments in the continent to undertake economic and structural reforms, including in the agricultural sector. The IMF says that agricultural subsidies should be phased out because they impose “a high fiscal cost.”
“Country experiences from the region suggest that the contribution of agricultural subsidies to improving food security and reducing poverty has only been weak,” said Deputy Managing Director Antoinette M. Sayeh in a statement.