Does investment in palm oil trade alleviate smallholders from poverty in Africa? Investigating profitability from a biodiversity hotspot, Cameroon.

In this study we investigate whether the increasing investment in smallholder oil palm plantations that contributes to deforestation is motivated by financial gains or other factors. We evaluate the financial viability of smallholder farmers selling fresh fruit bunches (FFBs) to intermediaries or ag...

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Autores principales:	Lacour M Ayompe, Raymond N Nkongho, Cargele Masso, Benis N Egoh
Formato:	article
Lenguaje:	EN
Publicado:	Public Library of Science (PLoS) 2021
Materias:	Medicine R Science Q
Acceso en línea:	https://doaj.org/article/621b5eb098124694900a2dc7c8203f30
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spelling	oai:doaj.org-article:621b5eb098124694900a2dc7c8203f302021-12-02T20:08:41ZDoes investment in palm oil trade alleviate smallholders from poverty in Africa? Investigating profitability from a biodiversity hotspot, Cameroon.1932-620310.1371/journal.pone.0256498https://doaj.org/article/621b5eb098124694900a2dc7c8203f302021-01-01T00:00:00Zhttps://doi.org/10.1371/journal.pone.0256498https://doaj.org/toc/1932-6203In this study we investigate whether the increasing investment in smallholder oil palm plantations that contributes to deforestation is motivated by financial gains or other factors. We evaluate the financial viability of smallholder farmers selling fresh fruit bunches (FFBs) to intermediaries or agro-industrial companies with mills, or processing the FFBs in artisanal mills to produce palm oil. We use data collected in four oil palm production basins in Cameroon and carried out a life cycle assessment of oil palm cultivation and CPO production to understand financial gains. We use payback period (PBP), internal rate of return (IRR), benefit cost ratio (BCR) and net present value (NPV) for 1 ha of oil palm plantation over 28 years at a base discount rate of 8% to asses viability. Our results show that smallholders make more money processing their FFBs in artisanal mills to produce CPO than selling FFBs to intermediaries or agro-industrial companies with mills. The sensitivity analysis show that land ownership is the single most important parameter in the profitability of investment in palm oil cultivation and trade. In addition to land cost, smallholders suffer from borrowing at high interest rates, high field management costs, while recording low on-farm FFB/processing yields. To improve the financial viability of smallholders investing in oil palm cultivation, measures are needed to encourage them to access land, get loans at reduced interest rates, reduce the cost of field management, adopt good agricultural practices to improve on-farm FFB/processing yields, as well as to generate additional revenue from the sale of other products.Lacour M AyompeRaymond N NkonghoCargele MassoBenis N EgohPublic Library of Science (PLoS)articleMedicineRScienceQENPLoS ONE, Vol 16, Iss 9, p e0256498 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	Medicine R Science Q
spellingShingle	Medicine R Science Q Lacour M Ayompe Raymond N Nkongho Cargele Masso Benis N Egoh Does investment in palm oil trade alleviate smallholders from poverty in Africa? Investigating profitability from a biodiversity hotspot, Cameroon.
description	In this study we investigate whether the increasing investment in smallholder oil palm plantations that contributes to deforestation is motivated by financial gains or other factors. We evaluate the financial viability of smallholder farmers selling fresh fruit bunches (FFBs) to intermediaries or agro-industrial companies with mills, or processing the FFBs in artisanal mills to produce palm oil. We use data collected in four oil palm production basins in Cameroon and carried out a life cycle assessment of oil palm cultivation and CPO production to understand financial gains. We use payback period (PBP), internal rate of return (IRR), benefit cost ratio (BCR) and net present value (NPV) for 1 ha of oil palm plantation over 28 years at a base discount rate of 8% to asses viability. Our results show that smallholders make more money processing their FFBs in artisanal mills to produce CPO than selling FFBs to intermediaries or agro-industrial companies with mills. The sensitivity analysis show that land ownership is the single most important parameter in the profitability of investment in palm oil cultivation and trade. In addition to land cost, smallholders suffer from borrowing at high interest rates, high field management costs, while recording low on-farm FFB/processing yields. To improve the financial viability of smallholders investing in oil palm cultivation, measures are needed to encourage them to access land, get loans at reduced interest rates, reduce the cost of field management, adopt good agricultural practices to improve on-farm FFB/processing yields, as well as to generate additional revenue from the sale of other products.
format	article
author	Lacour M Ayompe Raymond N Nkongho Cargele Masso Benis N Egoh
author_facet	Lacour M Ayompe Raymond N Nkongho Cargele Masso Benis N Egoh
author_sort	Lacour M Ayompe
title	Does investment in palm oil trade alleviate smallholders from poverty in Africa? Investigating profitability from a biodiversity hotspot, Cameroon.
title_short	Does investment in palm oil trade alleviate smallholders from poverty in Africa? Investigating profitability from a biodiversity hotspot, Cameroon.
title_full	Does investment in palm oil trade alleviate smallholders from poverty in Africa? Investigating profitability from a biodiversity hotspot, Cameroon.
title_fullStr	Does investment in palm oil trade alleviate smallholders from poverty in Africa? Investigating profitability from a biodiversity hotspot, Cameroon.
title_full_unstemmed	Does investment in palm oil trade alleviate smallholders from poverty in Africa? Investigating profitability from a biodiversity hotspot, Cameroon.
title_sort	does investment in palm oil trade alleviate smallholders from poverty in africa? investigating profitability from a biodiversity hotspot, cameroon.
publisher	Public Library of Science (PLoS)
publishDate	2021
url	https://doaj.org/article/621b5eb098124694900a2dc7c8203f30
work_keys_str_mv	AT lacourmayompe doesinvestmentinpalmoiltradealleviatesmallholdersfrompovertyinafricainvestigatingprofitabilityfromabiodiversityhotspotcameroon AT raymondnnkongho doesinvestmentinpalmoiltradealleviatesmallholdersfrompovertyinafricainvestigatingprofitabilityfromabiodiversityhotspotcameroon AT cargelemasso doesinvestmentinpalmoiltradealleviatesmallholdersfrompovertyinafricainvestigatingprofitabilityfromabiodiversityhotspotcameroon AT benisnegoh doesinvestmentinpalmoiltradealleviatesmallholdersfrompovertyinafricainvestigatingprofitabilityfromabiodiversityhotspotcameroon
_version_	1718375185328898048

Does investment in palm oil trade alleviate smallholders from poverty in Africa? Investigating profitability from a biodiversity hotspot, Cameroon.

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