Safeguarding forests from smallholder oil palm expansion by more intensive production? The case of Ngwei forest (Cameroon)

Cameroon currently produces 230,000 tons/year of palm oil making it the 3rd largest African and 13th largest global palm oil producer. The country's 193,860 ha of mostly non-industrial oil palm plantations, which are often characterized by archaic production methods, will likely expand significantly along with the anticipated increase of the annual palm oil production by 2025. Their continued expansion represents a threat to forest landscapes, wildlife biodiversity and the environment. Using the example of the Ngwei forest area, one of the hot spots of oil palm growing in Cameroon, this study evaluates the social welfare created by undertaking this activity and the land area that could be spared from deforestation through increasing productivity of non-industrial oil palm plantations. The field survey results indicated that, small-scale non-industrial producers used only between 1 and 30 percent of the inputs used by large-scale producers (skilled labour, mineral fertilizer, high-yield variety seedling, pesticide) and recorded only a quarter oil palm yield (5 tons of fresh fruit bunches per ha as compared to 19.3 tons/ha). The Cobb-Douglas production function showed a higher factor productivity for small-scale plantations. The baseline results from the non-linear programming model indicated a negative social welfare and revealed land and patch of traditional forest trees retained on farms as the most important production factors. Using the counterfactual of land sparing through non-industrial oil palm intensification as a reference scenario, the social welfare became positive and 75% of oil palm area could be reforested. The results also showed that a positive social welfare would be generated if a modest rebound effect occurred. However, as private and social benefits of intensified non-industrial oil palm cultivation exceeded the opportunity cost of forest conversion, improving the adoption of more productive inputs by farmers could prove to further increase pressure on the remaining primary forest areas. Hence, effective environmental governance and complementary policies will be essential in enforcing a reduction of oil palm area and the afforestation of abandoned lands.