34 Land suitability and feasibility study for oil palm and rubber plantations in south-wést Cameroon Volume Main report (LSKKo) (Ê3â@đQflôĐ@â ââWSft^pMKMtở ^ đ W â â a S [5)âwâ0đ(poỹDâửOQ: tọOỹửftjOfigaTStửficM) Land Resources DevelopmerftCnentre Land suitability and feasibility study for oil palm and rubber plantations in south-west Cameroon Volume Main report E A Wyrley-Birch, I P Anderson, W J R Cox, M Errington and S H Walker Land Resource Study 34 Land Resources Development Centre, Overseas Development Administration, Tolworth Tower, Surbiton, Surrey, England KT6 7DY 1982 43>5 Scanned from original by ISRIC - World Soil Information, as ICSU World Data Centre for Soils The purpose is to make a safe depository for endangered documents and to make the accrued information available for consultation, following Fair Use Guidelines Every effort is taken to respect Copyright of the materials within the archives where the identification of the Copyright holder is clear and, where feasible, to contact the originators For questions please contact soil.isric@wur.nl indicating the item reference number concerned LAND RESOURCES DEVELOPMENT CENTRE The Land Resources Development Centre, one of the scientific units of the Overseas Development Administration, assists developing countries in mapping, investigating and assessing land resources, and makes recommendations on the use of these resources for the development of agriculture, livestock husbandry and forestry; it also gives advice on related subjects to overseas governments and organisations, makes scientific personnel available for appointment abroad and provides lectures and training courses in the basic techniques of resource appraisal and development The Centre works in close cooperation with government departments, research institutes, universities and international organisations concerned with land resources assessment and development planning CENTRE DE DÉVELOPPEMENT DES RESSOURCES DE LA TERRE Le Centre de Développement des Ressources de la Terre (l'un des organismes scientifiques de l'Administration Britannique de Développement Outremer) apporte son aide aux pays en voie de développement en matière de cartographie, recherche et evaluation des ressources de la terre et fournit des recommandations quant ä l'exploitation de ces ressources pour le développement de l'agriculture, l'élevage et la sylviculture Le Centre offre également des conseilles techniques aux gouvernements et organismes outremer, se charge de trouver du personnel scientifique pour les postes a pourvoir ä l'étranger et organise des conférences et des stages de formation sur les techniques de base relatives a revaluation et ä la mise en valeur des ressources Le Centre travail Ie en étroite cooperation avec services gouvernementaux, instituts de recherche, universités et organismes internationaux s'occupant devaluation des ressources de la terre et de plans de développement ISSN 0305-6554 ISBN 0-86182-001-0 Contents VOLUME page LIST OF MICROFICHE DOCUMENTS viii LIST OF FIGURES viii LIST OF TEXT MAPS viii LIST OF SEPARATE MAPS ix ABSTRACT AND SUMMARY xi RESUME ET SOMMAIRE PART 1.1 1.2 1.3 1.4 1.5 1.6 1.7 PART2 2.1 2.2 2.3 2.4 2.5 INTRODUCTION Preface Objectives Team composition Methods Selection of areas for survey and study Acknowledgements The structure of the report 1 9 THE N A T I O N A L A N D REGIONAL SETTING 11 The country and its characteristics Current economic situation Agriculture in the economy National rural development strategy: the Minep Five-Year Plan Institutions and development in South-West Province 11 11 12 14 15 PART THE BOA PLAIN DEVELOPMENT AREA 3.1 v xxiii Physical features 3.1.1 Geomorphology 3.1.2 Soil and land suitability 3.1.2.1 The soils and their drainage 3.1.2.2 Soil characteristics 17 17 17 18 18 19 3.1.3 3.1.4 3.1.5 3.1.6 Land suitability classification Climate 3.1.4.1 Rainfall 3.1.4.2 Temperature 3.1.4.3 Relative humidity 3.1.4.4 Sunshine and incoming radiation 3.1.4.5 Wind 3.1.4.6 Dry season water deficits Hydrology 1.5.1 Drainage pattern 1.5.2 Estimation of runoff from rainfall 1.5.3 Minimum dry season flow and domestic and industrial water supplies 1.5.4 Flood estimation from maximum rainfall data 1.5.5 Drainage requirement and strategy Vegetation 20 27 27 27 27 27 28 28 31 31 32 32 34 36 43 3.2 Agroeconomic and social features 3.2.1 Agriculture and other rural activities 3.2.1.1 Crops and farming practices 3.2.1.2 Livestock 3.2.1.3 Income 3.2.1.4 Hunting 3.2.1.5 Forestry 3.2.1.6 Fishing 3.2.2 Land tenure 3.2.3 Population and employment 44 44 44 44 45 45 45 45 45 46 3.3 Infrastructure and services 3.3.1 Roads and transport 3.3.2 Marketing 3.3.3 Social and other services 47 48 48 48 MARKET PROSPECTS FOR OIL PALM PRODUCTS AND RUBBER 51 4.1 Oil palm products 4.1.1 The market for fats and oils 4.1.2 Palm oil 4.1.3 Palm kernels 4.1.4 Palm kernel oil 4.1.5 Palm kernel meal 51 51 52 52 52 52 4.2 Rubbe r 4.2.1 Demand 4.2.2 Production 4.2.3 Prices 55 55 55 55 PROPOSALS FOR DEVELOPMENT 57 5.1 Introduction 5.1.1 Objectives 5.1.2 Methods of site selection 57 57 57 5.2 Allocation of land for development in the Boa Plain 5.2.1 Elimination of unsuitable land 5.2.2 Designation of land for estate development and settlement reserves 5.2.2.1 The settlement reserves 5.2.2.2 Land for camps and gardens 5.2.2.3 Forestry and roads 58 58 PART PART VI 61 61 62 63 5.3 Proposals: forest utilisation 5.3.1 The inventory of timber resources 5.3.1.1 Method 5.3.1.2 Results 5.3.2 Exploitation options 5.3.3 Marketing 5.3.4 Revenue estimates 5.3.5 Conclusions 63 63 63 63 66 68 68 69 5.4 Proposals: estate oil palm 5.4.1 Introduction 5.4.2 Organisation, management and staff 5.4.3 Roads and drains 5.4.4 Buildings and services 5.4.5 Vehicles and heavy equipment 5.4.6 Seed and nurseries 5.4.7 Land clearing 5.4.8 Field maintenance 5.4.9 Production, harvesting and processing 5.4.10 Sales 5.4.11 Operating account 5.4.12 Financial cash flow 5.4.13 Total costs and rates of return 5.4.14 Economic cash flow and rates of return 69 69 71 71 72 73 74 74 75 75 78 78 79 79 80 5.5 Proposals: estate rubber 5.5.1 Introduction 5.5.2 Organisation, management and staff 5.5.3 Roads and drains 5.5.4 Buildings and services 5.5.5 Vehicles and heavy equipment 5.5.6 Planting materials and nurseries 5.5.7 Land clearing and planting 5.5.8 Field maintenance 5.5.9 Production and processing 5.5.10 Sales 5.5.11 Operating account 5.5.12 Financial cash flow 5.5.13 Total costs and rates of return 5.5.14 Economic cash flow and rates of return 81 81 81 82 82 82 83 83 83 84 85 85 85 86 86 5.6 Proposals: smallholder oil palm development scheme 5.6.1 Introduction 5.6.2 Conditions for smallholder participation 5.6.3 Development 5.6.4 Production 5.6.5 Inputs and benefits 5.6.6 Loan requirements and financing 5.6.7 Economic and financial cash flows and rates of return 87 87 87 89 89 90 90 91 5.7 Consolidated estate project costs and returns: oil palm and rubber 5.7.1 Consolidated project cost estimates 5.7.2 Finance 5.7.3 Prices 5.7.4 Inflation 5.7.5 Rates of return 91 91 92 92 92 92 5.8 Consolidated project costs and returns, including smallholders g2 5.9 Conclusion 93 REFERENCES 95 PART VII VOLUME APPENDIXES Soils: methods, profiles, classification, mapping units Climatic records and proposed estate drainage Estimate of commodity prices and costs of inputs Estate oil palm: costs, labour requirements and yields Estate rubber: costs and labour requirements Smallholder oil palm: yields, costs and returns Financial tables Economic tables LIST OF MICROFICHE DOCUMENTS Microfiche of the following documents are inserted inside the rear cover of Volume All three were issued as Appendixes in Wyrley-Birch et al (1981) A n inventory of the forest resources of the Boa Plains Report prepared by N.P.Woods (1980) Road construction proposals and costs Report by D M Brooks and J W F Dowling Transport and Road Research Laboratory, (1980) Infrastructure quantities and costs: roads and bridges, drainage works, river improvements and water supplies Appendix 6, Section I I , in Wyrley-Birch et al (1981) LIST OF FIGURES 3.1 Relationship between rainfall and runoff at selected stations in Cameroon 33 3.2 Depth/duration frequency curves for rainfall on the Boa Plain 37 LIST OF TEXT MAPS 1.1 Location of Camdev III soil and land suitability survey area 1.2 Block A (including Camdev II development areas) 3.1 Land drainage subdivisions of the Boa Plain development area 21 3.2 Mean annual rainfall 29 3.3 Forest types of the Boa Plain development area 41 5* Proposed layout of estates and settlement reserves viii 59 LIST OF SEPARATE MAPS (inside rear cover of Volume 1) Soil associations and land suitability Proposed drainage Forest resources ix Abstract and k e y w o r d s ABSTRACT At the request of the Government of the United Republic of Cameroon the Land Resources Development Centre of the UK Overseas Development Administration was appointed to a preparatory study for the Cameroon Development Corporation Camdev III development programme The project included soil and land suitability studies for large-scale estate development of two blocks of land and a feasibility study of land which was found to be suitable One block, covering 600 k m , was rejected because the land was either already farmed or topographically unsuitable In the other block, only the flat, sparsely populated 177 km Boa coastal plain north-west of Cameroon Mountain provided sufficient unoccupied land for a feasibility study This area is subject to a heavy annual rainfall of up to 500 mm, mainly falling in months from May to October The plan proposed includes the establishment, over a period of years, of 000 of rubber as an extension to an existing rubber estate, 000 of oil palm in three 000 estates, and 000 of smallholder oil palm, at a total cost* of CFAF 31 497 million (USS 146.5 million) for the estate development and CFAF 692 million (USS 3.2 million) for the smallholder development In view of the high rainfall, flatness of the land and numerous rivers, the provision of adequate drainage will be crucial to the success of the estate development; appropriate drainage plans are described in the report In addition to details of the proposals, the report contains a discussion of market prospects for rubber and oil palm and financial and economic analyses of the proposed developments The estimated financial and economic percentage rates of return, in constant 1980 terms, are respectively: 7.88 and 14.17 for estate rubber; 9.49 and 13.19 for estate oil palm; 18.15 and 20.16 for smallholder oil palm; and 8.63 and 13.68 for the total project KEYWORDS Environment, land capability, soil survey, agricultural development, planning, plantation agriculture, smallholding, surface drainage, oil palm, coconuts, rubber, economics, finance, cost, cost benefit analysis, profitability, marketing, Cameroon * xi In current terms i.e with provision for future inflation In the report, costs are also indicated in constant 1980 terms Summary INTRODUCTION At the request of the Government of the United Republic of Cameroon, the Land Resources Development Centre of the UK Overseas Development Administration was appointed to a preparatory study for the Cameroon Development Corporation's Camdev III development programme It was to include first a soil and land suitability appraisal (Phase I) and second — if suitable land for coconut, oil palm and rubber could be found — a project feasibility study (Phase II) for the establishment of these crops on estates and smallholdings The first report to the Cameroon Development Corporation (Wyrley-Birch et al., 1981) described the results of the investigations and made detailed proposals for developments over a period of years The present Land Resource Study, published with the permission of the General Manager of the Cameroon Development Corporation (CAMDEV), is intended for a wider readership in Cameroon and elsewhere Parts of the original text have been condensed while others have been amended to clarify the procedures used in determining land suitability and in planning profitable developments In addition all maps have been improved NATIONAL SETTING Cameroon has an area of about 470 000 km and in 1976 a population of 7.66 million with 602 515 in S W Province There are extensive areas of tropical forest, deposits of oil (now being exploited), natural gas, bauxite and iron ore as well as smaller amounts of other minerals and a considerable potential for hydro-electricity production — already used for processing alumina from Guinea Population density varies from 3.4 persons per km in East Province to 74.5 in West Province, with 24.9 in S W Province Forty-three per cent of the population is under 15 years old With Littoral Province, South-West Province receives the largest number of immigrants, equalling 30% of the natural increase in the population The immigrants originate mainly from North-West Province and the border zones Only in South-West Province are the increases in urban and rural populations the same, emphasising the greater need there for the provision of social facilities in the rural areas Agriculture is the mainstay of the economy, providing a livelihood for 75% of the population and accounting for 30% of the Gross Domestic Product (GDP) and over 60% of the value of exports Smallholder agriculture accounts for over 90% of the agricultural output with plantation agriculture accounting for only 10% Smallholder crops including cocoa, coffee, cotton, tobacco and groundnuts are important exports Together, cocoa and coffee account for about 45% of total agricultural exports while rubber, palm oil and palm kernels provide only 4.5% xiii 5.5.6 Planting materials and nurseries The clones PB 235, 260, 310 and 311 are well adapted to producing high yields at low intensities of tapping with stimulation They are further said to be tolerant of high watertables and not have dense and heavy crowns These characteristics make these clones particularly suitable for planting on the Boa Plain where, even with drainage, a certain amount of waterlogging is to be expected in the wet season In this situation too, light crowns may help to reduce wind damage Tapping intensities are likely to be low because of the large number of days lost due to wet weather GT clonal seed would be suitable for rootstocks The procedures to be adopted in laying out and maintaining rubber seedling nurseries are well documented and need not be repeated here except to indicate that the area to be planted is subject to flooding in the wet season and precautions should be taken against prolonged inundation and water logging by choosing a high ground site and putting the polythene planting bags (polybags), in which the seedlings are grown and budded, on raised beds above the general ground level A mixture of topsoil, rock phosphate and sand is used for filling the polybags and regular applications of granular fertiliser, foliar nutrient and fungicidal sprays are applied Regular thinning and roguing are necessary to produce the healthiest possible polybag budded stumps for planting in the field at two per planting point A cost per polybag budded stump of around 50 CFAF is normally aimed at For the final stand of 450 trees per ha, 000 seed or 800 germinated seed in 400 polybags will be required per of planting This implies about of nursery for the 200 to be planted each year 5.5.7 Land clearing and planting It has been assumed in the cost estimates that the land clearing will be done by mechanical means This involves felling with bulldozers equipped with tree pushers, windrowing the felled materials using bulldozers equipped with rakes rather than blades to reduce the movement of topsoil, and finally burning the windrows as completely as possible Note that an excess of soil in windrows impairs burning and that buried roots and stumps could become foci of rubber root disease As a further precaution against root disease infection, rippers are used to remove as many as possible of the roots remaining in the soil Possible difficulties in achieving a good burn have already been discussed in connection with oil palm in Section 5.4.7 A good burn t o remove 90% or more of the forest debris will make all subsequent development operations, such as drain excavation, very much easier and time spent developing a successful technique for doing this will be worthwhile Planting cover crops and spraying with pre-emergent herbicides follows immediately after windrowing and burning, so that a complete cover is established with a minimum of hand weeding Planting is normally done from April to June A spacing of x 2.8 m or 510 points per has been suggested Two budded plants would be planted per point, one being thinned out when the rainy season starts at the beginning of the second year A further thinning to reduce the stand to 450 trees per would be done early in the third year Costs are shown in section 5.5.1, Appendix 5, Table A5.2, and Appendix 7, Table A7.15 5.5.8 Field maintenance Maintenance procedures for rubber are well documented and in general are similar for all estates but vary in detail according to climatic and other physical conditions of the site, management procedures, etc They are aimed at obtaining a strongly growing, uniform, healthy stand of trees which will produce maximum yields This is achieved 83 by eliminating weed competition, establishing a dense inter-row blanket of leguminous cover crop, regular fertiliser applications, careful pruning, and most important, systematic inspection for and treatment of root diseases Costs are given in Appendix 5, Table A5.2 and Appendix 7, Table A7.18 5.5.9 Production and processing Yield estimates are based on a maximum of 290 working days per annum for tappers and a daily out-turn of 80%, for all seasons In addition, it is estimated that on the Boa Plain up to 30 tapping days could be lost due to rain and to the loss of latex when rain falls during tapping, so diluting the latex that it cannot be processed (a 'washout') The yield estimates given in Table 5.12 were obtained from CAMDEV sources T A B L E 5.12 Estimated rubber yield from proposed Camdev 111 plantings Years after planting Dry rubber kg/ha 10 11 12-16 17-20 21-30 500 900 200 400 600 800 000 900 700 Tapping systems are varied to meet the specific needs of an estate: for example at CAMDEV a system has been devised to mitigate the effects of the shortage of tappers, their low outturn and the effects of the heavy rainfall in the wet season The basic r system is a half spiral every third day (50% intensity) with stimulation which is steadily increased from stimulations per year in the first years t o per year in years to 14 After 10 or more years depending on yield, % spiral upward tapping with stimulation is introduced to supplement the downward tapping With washouts and when morning tapping is prevented, afternoon recovery tapping is practised If the shortage of tappers makes it unavoidable, 4th and 5th day systems are introduced to bring as much as possible of the planted area into production With these measures it is estimated that the tapping intensity can be increased to over 75% The build-up in the requirement of tappers for the 000 development will be as follows: Tapping year No of tappers 58 115 172 229 286 A new factory on an existing estate will have excess capacity to handle the production from the 000 Camdev 111 development and consequently no separate provision has been made for a factory in the cost estimates but a processing cost has been allowed for (See Appendix 7, Table A7.18) The predicted build-up and decline in production from this area during the course of the project is shown in Table 5.13 TABLE 5.13 Project year 10 11 12 13 14 15 16 17 18 19 84 Predicted production of rubber from the proposed planted area Dry rubber t 100 280 520 800 120 380 600 760 880 960 000 Project year 20 21 22 23 24 25 26 27 28 29 30 Dry rubber t 1 1 1 1 1 980 960 940 920 860 820 780 740 700 700 700 5.5.10 Sales It is assumed that all the rubber produced will be baled and transported to a central collection point, packed in containers and exported through Douala Sheet is packed into bales each of 111.1 kg; crumb into blocks each of 33.33 kg, which are then packed into wooden pallets so that each pallet weighs tonne, ie contains 30 blocks Sixteen pallets or about 160 bales are loaded into each container 5.5.11 Operating account (Appendix 7, Table A7.18) The operating account reflects deficits for the first years after which operating surpluses are a constant feature Commencing at CFAF 16.65 million in project year 11 (1994), they rapidly build up to CFAF 427 million in project year 17 (2000) and level off at around CFAF 500 million from project year 22 (2005) onwards All these figures are expressed in 1980 constant terms and are before depreciation interest and taxation A contingency item of 10% is included on all costs It is estimated that peak production will be reached in project year 19 (2002) at 000 t dry rubber; the estimated costs of production are summarised below: Dry rubber C F A F / , 2002 Maintenance Tapping Latex/polybag transport Processing Packing Dispatch General charges Export entries and taxes Handling and port charges 14 27 500 000 000 500 000 600 480 655 Total Contingencies 142 685 14 268 Grand total cost FOB Douala, in constant 1980 terms 156 953 The above costs have been expressed in 1980 constant terms only, but the operating account reflects the position in current terms, taking into account future trends in rubber prices (reflecting world inflation) and also the impact of future inflation on costs, both capital and recurrent The estimated trends in future world rubber prices are detailed in Appendix 7, Table A7.21 (constant terms) and Table A7.22 (current terms) Estimated cost inflation factors are detailed in Appendix 7, Table A7.27 As in the case of the oil palm project, no provision is included for any Head Office charges 5.5.12 Financial cash flow (Appendix 7, Table A7.19) For the first years, 1986—94, there are cash deficits, because in the first years capital inputs have to be financed without any revenue from operations and in the next years because of a combination of capital inputs and operating deficits The cash flows are expressed in constant 1980 terms and in current terms, but the figures quoted in this paragraph are in current terms During the period project years to 11 (1986—94), it is estimated that cumulative annual deficits will total CFAF 285.93 million which will have to be financed from external sources to the extent that finance is not available from self-generated funds The first annual surplus is expected in project year 12 (1995) 85 5.5.13 Total costs and rates of return (Appendix 7, Table A7.20) The project investment period for rubber covers an 11 -year period (project years to 13, 1986 to 1996) Total costs are summarised below under main headings: Million CFAF Development: Field Drainage Roads and bridges General charges Buildings: Housing Others Ancillary services Equipment and furniture Vehicles and he avy equipment 511.01 14.70 86.75 411.29 213.55 47.34 59.00 121.97 234.98 Total developm jnt and fixed assets costs Working capital 700.59 100.00 Contingencies 800.59 180.02 Total costs in 1980 constant terms Operating deficits 1992 and 1993 Inflation adjustment 980.61 169.04 1508.23 Total cost in current terms Less Revenue from timber 657.88 85.00 Total net cost in current terms 572.88 Of the total investment cost, it is estimated that the foreign exchange component will be about 34%, equivalent to about US $5,701 million at an exchange rate of CFAF 215 Proposals for the financing of the investment costs are made in Section 5.7.2 The rubber project rates of return are given at the foot of the cash flow (Appendix 7, Table A7.19) These are based on the assumptions used in the financial projections, and result in rates of 9.49% in constant 1980 terms and 17.05% in current terms The rates of return have also been tested by sensitivity analysis against variations in prices, costs and yields; results are detailed in Appendix 7, Tables A7.23 and A7.24 and tabulated below: Constant 1980 terms, % Project prices, costs and yield assumptions s Project prices increased by 10% reduced " " Project costs increased by 10% " " reduced Project yields increased by 10% " " reduced 9.49 10.72 8.14 8.14 10.89 10.46 8.43 Current terms, % 17.05 18.27 15.71 15.87 18.64 18.26 16.00 All rates are before company taxation As in the case of the oil palm proposals, the rates of return are more sensitive to variations in costs than to those in prices and yields 5.5.14 Economic cash flow and rates of return Appendix 8, Table A8.1 gives the economic cash flow for estate rubber It is derived from and essentially follows the same format as the equivalent financial tables (Appendix 7, Tables A7.15 to A7.19) In arriving at Table A , Appendix 8, the same adjustments were made as those for oil palm given in section 5.4.14 The economic internal rate of return for estate rubber is 13.19% based on the assumptions used in this study (or 12.07% when costs are increased by 10% or 10.85% when benefits are reduced by 10%) Though somewhat low in economic terms this level of return is high enough to justify the development proposed 86 5.6 5.6.1 PROPOSALS: THE SMALLHOLDER DEVELOPMENT SCHEME - OIL PALM General The proposals cover the development of 000 of oil palm smallholdings in the settlement reserves under the existing CAMDEV Smallholders' Development Scheme which was set up for the Camdev 11 Development Project and is expected, under the proposals made in this report, to be continued as part of the Camdev 111 Project The planned rate of planting is 125 annually over a period of eight years from 1986 to 1993 or project years to 10 All aspects of the existing scheme which covers the development of both rubber and oil palm, are dealt with in detail in the World Bank report on the appraisal of the Camdev II Project (World Bank, 1977b) The financing of the present scheme is covered by agreements between the financing institutions, including the World Bank, CCCE and COMDEV, and the Government of the United Republic of Cameroon The funds are channelled to CAMDEV through FONADER and there are separate agreements for this between the Government and FONADER, and FONADER and CAMDEV Government extension services usually have about one field assistant to 300 farmers For the CAMDEV scheme it is felt that, during the development phase, the ratio should be 1:50 (particularly for the unfamiliar crop, rubber), rising to 1:100—150 in the mature phase CAMDEV will manage the scheme and provide an extension service through its smallholder department The costs are shown in detail in Appendix 6, Tables A6.1 and A6.2 5.6.2 Conditions for smallholder participation Smallholders take part in the scheme under an agreement which they are required to make with CAMDEV The land they wish to develop must fulfil four conditions: It must be within 30 km of one of CAMDEV's rubber estates or oil palm mills, depending on the crop to be planted It must be within 250—500 m of a motorable road or track The land and soils must be suitable for the crop The land must be covered by a land use right of a minimum of 24 years This presumably precludes the right of CAMDEV to take over the land before development starts Participating smallholders are designated planters and for this the qualifications are: They must be Cameroon nationals and receive 75% of their income from farming They must be between 25 and 40 years old — physically f i t to stand the arduous work of plantation establishment Older persons who have young family members to cope with the work can qualify They must pledge themselves to carry out the necessary development, maintenance and harvesting operations specified by CAMDEV They must have land for development which meets the conditions of the agreement They must have full user rights to the land to be developed and a guarantee of having used it for at least 20 years They must have their status of planter approved by CAMDEV The CAMDEV Smallholder Department is expected to inspect the land proposed for development, confirm its suitability for this purpose and confirm the applicant's ability to carry out the necessary development programme 87 Groups of closely situated smallholders are preferred as applicant planters Each planter is allowed to develop to in the first year and, depending on his performance, increments of a year up to a total of for oil palm and for rubber To offset the loss of earnings from other agricultural activities, the planter receives a grant of CFAF 56 960* for oil palm and CFAF 108 160 for rubber, over periods of and years respectively, on satisfactory completion of specified phases of the development programmes In the case of oil palm, intercropping with food crops is encouraged for years, after which the planting of leguminous cover crop is recommended However, this does not allow the cover crop much time to establish and perform its useful function before it is shaded out Planting materials, fertilisers, chemicals and cover crop seed* are provided to the planters in the form of a loan which, in the case of oil palms, is capitalised up to the 5th year after planting and is repaid from the 7th to the 13th years, in increasing instalments starting with 5.5% and ending up with 19.5% Repayment is deducted from sales of FFB The planter is obliged, under the terms of his agreement, to sell these to CAMDEV, who are required to keep a register of planters, maintain individual accounts and provide monthly statements supported by receipts, etc The loan for rubber differs from that for oil palm because the period to maturity is longer It continues to the 8th year and is repaid from the 10th to 19th years from sales of latex coagulum (polybag) to CAMDEV CAMDEV have A and B category planters The A category includes planters who need grants while the B category planters have sufficient financial resources of their own to pay for the labour to develop their plots, but make use of the loans to acquire the necessary planting materials, technical assistance, etc., for planting up their land A limit of 5% of the total number of planters has been set for the B category When the crops start bearing, CAMDEV will arrange convenient roadside collection points to which the planters will bring their fresh fruit bunches (FFB) or polybag for collection on specified days The FFB will be expected to be ready for collection less than 24 hours after harvesting Problems of a general kind have been encountered with the existing scheme, and the two following illustrate the difficult decisions that have to be made First, some of the smallholdings selected have been more than the stipulated distance of 250 to 500 m from a motorable road or track so that in future the evacuation of produce will be much more difficult Second, as a result of the poor standard of husbandry on many of the farmers' plots, the growth of the permanent crops is being retarded by excessive competition from weeds and food crops like cassava The first problem has an obvious solution which could retard progress and eliminate some keen participants The second is very common in schemes of this kind where the controlling organisation has no real authority over the participants Although there is the sanction of withholding the smallholder's maintenance grant, it is difficult to apply in practice and can defeat the objective of the scheme The problem can be minimised by careful selection of the participant smallholders (which could lead to disappointing rates of expansion for the scheme) and by the employment of very capable and dedicated field staff (which is likely to be seen as a waste of talent for the small amount of progress made) Such staff are required to visit the farmers frequently and persuade them that it is in their best interests to maintain their smallholdings well and bring them into production as quickly as possible A slow process of education is involved After a time, this process will gather momentum when those who have followed instructions bring crops into production and are seen to prosper It is only at this stage that the benefits of the careful selection process and the quality of the field staff will be revealed In this con- *The grants paid for oil palm are to be jointly reviewed in October 1980 by F O N A D E R , C A M D E V and SOCAPALM so that a standard, statewide system can be devised "PThe cost of management and technical assistance is borne by the Government and is not charged to the planter 88 nection, successful examples of smallholder schemes of this kind in other countries should be studied 5.6.3 Development Land clearing will be done by hand and the labour will be derived from the smallholders' own family resources For the first years, all material inputs would be provided by CAMDEV on credit and financed by FONADER Development costs per hectare are estimated below: CFAF/ha Cover crop Planting material Wire Fertilisers Chemicals 55 30 852 024 320 435 000 Contingencies 10% 92 631 263 101 894 There is no provision for the value of the smallholders' labour in these costs, Fertilisers are included for years although years will be financed by credit 5.6.4 Production Yield assumptions are lower than those for estate oil palms and smallholder production of FFB is expected to progress as indicated in Table 5.14 T A B L E 5.14 Smallholder oil palm Yield assumptions and production (a) Y I E L D S Crop year 9-15 16-20 21-25 26-30 FFB t/ha Oil Oil t/ha Kerne s % % Kernels t/ha 2.25 5.00 7.25 10.00 12.00 13.00 12.0C 11.50 11.00 14.0 15.0 17.0 18.5 21.0 21.0 21.0 21.0 21.0 0.32 0.75 1.23 1.85 2.52 2.73 2.52 2.42 2.31 4.00 4.10 4.20 4.35 4.50 4.50 4.50 4.50 4.50 0.09 0.21 0.30 0.44 0.54 0.59 0.54 0.52 0.50 (b) PRODU C T I O N , T O N N E S Project year 10 11 12 13 14 15 16 17 18 FFB Oil Kernels Project year 281 906 812 062 562 187 7812 437 10 781 11 781 12 500 12 875 40 134 288 519 834 175 516 857 2158 405 592 702 11 37 75 130 198 272 346 420 483 531 567 586 19 20 21 22 23 24 25 26 27 28 29 30 Oil FFB 12 12 12 12 12 12 12 11 11 11 11 11 875 750 625 500 375 188 001 814 752 690 565 440 2 2 2 2 2 2 702 676 650 624 598 560 522 484 472 460 434 408 Kernels 586 579 573 566 560 551 542 533 530 528 522 518 Smallholders' fruit will be sold to the CAMDEV oil mill for processing The price paid for the fruit will depend on the price of palm oil on local and export markets and the price of kernels Based on the price assumptions made in the financial projects, the fruit prices to be paid are given in Appendix 3, Table A3.6 The detailed deductions and costs are set out in the same table 89 5.6.5 Inputs and benefits Total costs and benefits are given in detail in Appendix 6, Tables A6.2 and A6.3, the cash flow in Appendix 7, Table A7.31 and the costs and benefits per hectare in Appendix 7, Table A7.32 During the first years there is no income, but FONADER makes cash grants to smallholders on the basis of paying 80% of the basic labourer's wage for each manday requirement per hectare Net income per hectare, after loan repayments, is summarised in Table 5.15 Loan repayments are in the same proportion to the total loan as one year's output is to the total output over the repayment period Interest payments are 9% of the principal outstanding at the beginning of each period Net income per rises from CFAF 40 000 in the first year of harvesting to CFAF 194 000 in the ninth year from planting and is stabilised between CFAF 240 000 and 250 000 from the thirteenth year onwards All figures are in 1980 constant terms T A B L E 5.15 Year after planting 14 19 24 Smallholder oil palm: income per and manday in each fifth year of the project (1980) terms CFAF 12 17 22 27 Income per manday* Annual income/ha Project year 40 194 251 247 254 252 300 408 595 166 USS 187 904 169 152 182 CFAF 5 USS 088 886 028 952 083 18 23 23 24 * Manday s per for maintenance and harvesting labour required during the relevant year The incomes shown in Table 5.15 compare favourably with wage levels of skilled and unskilled estate workers used in this report (at an annual rate of CFAF 240 000 (US$ 1116) and CFAF 180 000 (US$ 837) respectively) However, workers receive free housing and medical facilities Indications also are that the smallholders' income levels in Table 5.15 will be significantly higher than those earned from oil palm in the two smallholder schemes existing at lloani and Mbongo (see Section 3.2.1.3) Smallholders joining the CAM DE V Smallholders' Development Scheme will of course retain their existing food crop plots, the earnings from which are expected to be minimally affected by the labour requirements for oil palm 5.6.6 Loan requirements and financing The total loan requirements are CFAF 253.13 million in current terms, to be drawn and repaid as shown below: Year 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 12.44 15.25 18.37 22.86 29.72 31.49 33.38 35.37 17.67 15.45 12.88 8.25 Total 90 Loan requirements, million CFAF 253.13 Year Loan repayments, million CFAF 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 8.97 20.39 33.91 48.92 64.68 81.22 98.44 104.35 9632 84.75 70.24 53.78 36.58 18.59 821.14 Credit loans to the smallholder of CFAF 124.939 each, would be for 12 years, with a moratorium for the first years on repayments of principal and interest During the crop development period, FONADER provides a cash grant based on the manday inputs as explained in Section 5.6.5 The cost of management and supervision are also paid by Government as a grant during the development period but a charge for this is made thereafter to the smallholder 5.6.7 Economic and financial cash flows and rates of return Economic cash flows per hectare and in total are presented in Appendix 8, Tables A8.3 and A8.4 respectively Cash grants (Table A8.3) have been based on a shadow wage rate of CFAF 377 per manday (see Appendix 3, Section A3.3.2) Field costs borne by smallholders have been adjusted to economic terms and include the cost of smallholder labour Management and supervision costs have also been adjusted to economic terms using the standard conversion factor of 0.77 Appendix 7, Table A7.33, reflects the financial inputs by the Government and the financial benefits it derives from the smallholder sector of the Camdev 111 project During the first years, the total net cost to Government is estimated at CFAF 691.55 million However, from the 10th year onwards, there is an increasing and substantial cost inflow in the form of credit repayments, plus interest, sales and export taxes and the recovery of management and supervision costs The initial outlay is recovered by the 16th year and the aggregate inflow from that year to the 29th year is estimated at CFAF 746 million The financial internal rate of return to Government in financing the smallholder sector of the project is 11.81% In economic terms it is 20.16% (see Appendix 8, Table A8.4; 16.37% given a 10% increase in costs or 16.4% given a 10% reduction in benefits) which is a very favourable return and easily justifies this component of the project 5.7 5.7.1 CONSOLIDATED ESTATE PROJECT COSTS AND RETURNS: OIL PALM AND RUBBER Consolidated project cost estimates (Appendix 7, Table A7.26) The following summary is derived from Table A7.26 and indicates the total amount of investment required to implement the estate oil palm and rubber component of the Camdev III project: Million CFAF Field development costs: Oil palm Rubber Oil palm Rubber Oil palm Rubber 761.55 023.75 837.74 676.84 600.00 100.00 Contingencies: Oil palm Rubber 14 9 9 319.34 180.02 Operating deficits: Oil palm Rubber 16 499.25 110.93 169.04 Inflation adjustment: Oil palm Rubber 16 779.22 14 047.46 508.23 Less sundry revenue: Oil palm Rubber Fixed assets costs: Working capital: 32 334.91 Net total investment cost 91 753.00 85.00 31 496.91 Of these total costs it is estimated that the foreign exchange component will be 38%, equivalent to US S 55.450 million at an exchange rate of CFAF 215 5.7.2 Finance (Appendix 7, Table A7.25) Of the total investment cost for the oil palm and rubber estate sector, CFAF 31 497 million, it is estimated that CFAF 500 million will be available from self-generated funds between 1992 and 1996 from Camdev I I I , leaving a balance of about CFAF 25 000 million to be obtained from other sources If Camdev 111 were to be considered in isolation and the total requirement of CFAF 25 376 million were borrowed at say 8% per annum the loan period involved would be 19 years A moratorium on repayment of principal of 12 years and on payment of interest of 11 years, would be needed — this would almost certainly be unacceptable to lenders and in any case, would be an unsuitable method of financing long-term tree crop development The alternatives are that it should be financed by surplus funds available from CAMDEV's ongoing operations plus an injection of loan capital, or that part of the requirement should be financed by further equity capital subscription from Government plus an injection of loan capital 5.7.3 Prices (Appendix 7, Tables A7.8 to 7.11, 7.21 and 7.22) Marketing and prices generally are dealt with in Part of this report and are detailed in the above mentioned schedules The prices for palm oil, palm kernels and rubber are based on the Price prospects for major primary commodities dated January 1980 and issued by the International Bank for Reconstruction and Development: in this publication, price trends are forecast in both 1980 constant dollar terms and in current terms for the period 1980—90 The prices used in the financial projections in this report follow the trends forecast to 1990 The mean annual trend during this period has then been extrapolated in determining prices to the year 2010 For local palm oil sales which are expected to constitute 60% of total palm oil sales, the price in constant 1980 terms has been retained at its present level throughout The price in current terms is based on the estimated rate of inflation in the country, but the price in any one year is related to the previous year's rate of inflation 5.7.4 Inflation (Appendix 7, Table A7.27) Over the past decade in particular, the rates of inflation in some countries have been extremely difficult to predict and constitute a major problem in financial forecasting This is a particular problem during the capital investment and development period of long-term tree crops when there is little or no crop revenue Failure to make adequate provision for inflation during this period would result in a shortfall in the financing arrangements Inflation in the Cameroon appears to vary substantially not only between provinces but also between towns and rural areas It has been suggested that the national rate at present is running at about 15% annually but attempts are being made to reduce it In the circumstances, it has been assumed that the annual rate in 1981 will be 10%, falling to 8% in 1982 and to 6% from 1983 onwards All rates are compounded Since the financial projections are expressed in both constant 1980 terms and in current terms, the impact of the assumed rates of inflation is readily discernible 5.7.5 Rates of return (Appendix 7, Table A7.28) The consolidated internal rates of return for oil palm and rubber estates are estimated to be 8.14% in constant 1980 terms and 14.26% in current terms 5.8 CONSOLIDATED PROJECT COSTS AND RETURNS INCLUDING SMALLHOLDERS Consolidated net economic cash flow for the total project is shown in Appendix 8, Table A8.5 and includes the adjustments made to the financial tables for oil palm and rubber mentioned in Sections 5.4.14 and 5.5.14 The overall economic rate of return 92 for the whole project is 13.68%, an acceptable level bearing in mind the considerable capital and infrastructural costs required Consolidated financial cash flows and internal rates of return in constant 1980 and current terms are presented in Appendix 7, Tables A7.34 and 7.35 respectively In constant 1980 terms the internal rate of return is 8.63% while in current terms it is 14.69% 5.9 CONCLUSION The Boa Plain has been an isolated forested area, completely inaccessible to motor vehicles during the wet season and hardly accessible at other times Services — education, health, transport, postal, agricultural extension and trading — have been very basic or non-existent To the local people the most significant benefit resulting from the proposed project will be the development of all-weather motorable roads throughout the Boa Plain linking the existing villages with Mbonge and beyond As has already happened at Penda Mboko (a Camdev II development), road access will encourage local entrepreneurs to provide transport services, so removing one of the more arduous burdens borne by the people of the area Moreover, an improved road system will make the movement of commodities much easier and encourage better trading facilities Any developments are bound to lead to the destruction of yet another small part of the world's tropical forest resource Social benefits resulting from the project may be offset by dietary losses if the clearing of the forest reduces the animal population and lessens the availability of "bush meat", a currently important source of protein However, the proximity of the coastal creeks and the nearby coastal fishermen, together with the improved transport network, should lead to greater availability and trading of fish and help to compensate for any protein loss in the diet By making available the new estate medical facilities to the local people (even at a cost) CAMDEV will contribute to a general improvement in the living standards of the people Several hundred smallholder families will have their incomes increased by participation in the smallholder development scheme On a wider scale employment will be provided for 000 mainly imported estate staff and workers Given the traditional structure of family ties in Cameroon, the project will have a direct multiplier effect in that there is a transfer of income by workers to their homelands Improvement of the proposed evacuation route via Mundongo, Munyange and Idenau and the upgraded west coast road to Bota will have benefits for both the local villages and for the CAMDEV estates at Idenau and Debundscha, by linking these estates directly to the food-growing area around Munyange The palm oil produced on the oil palm estates will help to maintain supplies to the local market Any surplus will be exported and thereby augment the country's foreign exchange earnings as will the export of all the rubber that is produced 93 Part References Part References ANDERSON I P 1979 Camdev III Surveys (land suitability) Report for the First Quarter 1979 Land Resources Development Centre, UK Overseas Development Administration, London BLAAK 1979 A village palm oil mill Oil Palm News, TPI, No 23 * BROOKS D M and DOWLING J W F 1980 Road construction for agricultural development in SW Cameroon Working Paper, Overseas Unit, Transport and Road Research Laboratory, Crowthorne, no 89 CAMDEV 1976 CDC Development Programme, General presentation Cameroon Development Corporation and Ministry of Economics and Planning CAMDEV 1976 CAMDEV Development Programme Part V, Smallholders oil palm project Cameroon Development Corporation, Ministry of Economic Affairs and Planning, Yaoundé, Cameroon, October, 1976 CAMDEV 1979 Cameroon Development Corporation annual report and accounts for the 12 months ended 30th June 1979 Cameroon Development Corporation, Bota, Victoria, Cameroon CARROLL D M and HILLI D 1968 Draft recommendations for soil profile descriptions Miscellaneous Report, Land Resources Development Centre, UK Overseas Development Administration, no COX W J R MULHOLLAND J S FOSTER L J and GRANT G L 1979 Cross River Rubber Estates Ltd feasibility study London: Commonwealth Development Corporation DUMORTJC 1968 Notice explicative sur la feuille Douala-Ouest, carte géologique de reconnaissance pour le Cameroun Yaoundé, Cameroon: Bureau of Geology and Mines •Report issued as Microfiche Document in this Land Resource Study 95 FAO 1974 Soil survey in irrigation investigations Draft Soils Bulletin, FAO FAO 1976 A framework for land evaluation, Soils Bulletin, FAO no 32 FAO 1979 FAO production yearbook, Vol 33 FAO-UNDPSOIL SCIENCE PROJECT 1977 Soil surveys and land evaluations for the second development programme of the Cameroon Development Corporation (CDC) summary report Technical Report no Soil Science Department, Iraf-Oharest, Ekona, Cameroon FOSTER L J GULLAN L C GERRARDPWand GRANT G L 1977 Appraisal of Cameroon Development Corporation's Second Development Programme (Camdevll) London: Commonwealth Development Corporation HARTLEYCWS 1977 The oil palm 2nd Edition London: Longman HAWKINS Pand BRUNTM 1965 Report to the Government of Cameroon on the soils and ecology of West Cameroon Vols I and II Report No 2083 Rome: FAO HUNTING TECHNICAL SERVICES and HARRISON FLEMING ADVISORY SERVICES 1979 Republic of Indonesia and UK transmigration project: site investigations along the TransSumatra Highway Phase I I I Study of the Kuamang Kuning Transmigration Development Area London: Hunting Technical Services Ltd JENKIN R N 1978 Proposals for soil and land suitability surveys for Camdev I I I , United Republic of Cameroon Project Report, Land Resources Development Centre, UK Ministry of Overseas Development, No 43 LETOUZEY R 1959 Phytogéographie Camerounaise In: Atlas du Cameroun Imprimerie Nationale, Paris MINEP 1976a IV e Plan quinquennal de développment économique, social etculturel, 1976—1981 (Fourth Five-Year Plan, 1976-81) Ministère de l'Economie et du Plan, Yaoundé, Cameroon MINEP 1976b Main results of the April 1976 General Population and Housing Census Department of Statistics and National Accounts, Ministry of Economic Affairs and Planning, Yaoundé, Cameroon MINEP 1977 Note annuelle de statistique, (Annual statistical notes) Ministère de l'Economie et du Plan, Yaoundé, Cameroon MINEP 1978 Comptes Nationaux du Cameroun (Version SCN) Années - , 1975-1976 (Cameroon National Accounts 1974-1975 and 1975-1976) Direction de la Statistique et de la Comptabilité Nationale, Ministère de l'Economie et du Plan, Yaoundé, Cameroon 96 MURDOCHG 1979 Camdev III Surveys (land suitability) Report for the Fourth Quarter of 1978 Land Resources Development Centre, UK Overseas Development Administration, London RIJKE 1977 A preliminary pedological survey within the area proposed for coconut palm development Institut de Recherches des Huiles et Oléagineux, Paris RODIER J A and AUVRAYC 1965 Preliminary studies of floods on experimental and representative catchment areas in tropical Africa In: I ASH Symposium, Budapest V o l , 22-38 TROPICAL PRODUCTS INSTITUTE 1976 Oil Palm News No TROPICAL PRODUCTS INSTITUTE 1979 Oil Palm News No 23 TURNER P Dand GILLBANKS R A 1974 Oil palm cultivation and management The Incorporated Society of Planters, Kuala Lumpur, Malaysia »WOODS N P 1980 A n inventory of the forest resources of the Boa Plains Report prepared for the Cameroon Development Corporation WORLD BANK 1977a Second SOCAPALM appraisal report Report No 1364-CM, March 1977 WORLD BANK 1977b Cameroon: Appraisal of a second CAMDEV project Report No 1676-CM, December 1977 WORLD BANK 1978 Price prospects for major primary commodities Economic Analysis and Projections Department Report 814/78, June 1978 WORLD BANK 1979 Commodity price forecasts May 1979 WYRLEY-BIRCH E A 1979 Camdev III Surveys (land suitability) Report for the Third Quarter 1979 Land Resources Development Centre, UK Overseas Development Administration, London WYRLEY-BIRCH E A ANDERSON I P, C O X W J R, ERRINGTON Mand WALKER S H 1981 Land suitability and feasibility study for the s establishment of oil palm and rubber plantations in south-west Cameroon Project Report, Land Resources Development Centre, UK Ministry of Overseas Development, no 102 'Report issued as Microfiche Document in this Land Resource Study 97 Printed in England for Her Majesty's Stationery Office by Hobbs the Printers of Southampton (1206) Dd8325268 10/82 G3927 ... PRODUCTS AND RUBBER 51 4 .1 Oil palm products 4 .1. 1 The market for fats and oils 4 .1. 2 Palm oil 4 .1. 3 Palm kernels 4 .1. 4 Palm kernel oil 4 .1. 5 Palm kernel meal 51 51 52 52 52 52 4.2 Rubbe r 4.2 .1 Demand... 38 19 690 763 28.9 2.4 1. 3 1. 0 0 .1 1.3 10 3 12 58 503 696 450 080 70 14 910 943 077 (66 4 71 %V 024 15 7 61 305 10 0 17 .9 11 .4 0.5 Q V %V 984 007 10 7 842 10 0 71 783 31 663 10 5 13 74 11 972 065 19 3... 33 51 30 54 28 48 10 0(9) 12 0(9) 14 0(9) 15 0(9) Mechanical analysis Clay (2 *1) % cv% 26 47 24 63 21 71 15 14 12 14 13 11 15 11 2 97 87 51 50 55 71 19 96 20 11 3 Fine sand (50-250 /1) % CV% 25 76 28