Understanding the Drivers of Farm Investment in Cameroon amidst Climate Variability

Abstract

Purpose: The purpose of this study was to explore the drivers of farm investment amidst climate variability in Cameroon. Methodology: The researchers employed the IV Two Step Tobit and Fractional regression models on time series data spanning from 1990 to 2022 to examine the impacts of temperature, precipitation, human capital, life expectancy, population growth rate, and trade openness on farm investment. Findings: The findings indicate that while temperature has a positive but insignificant effect, precipitation has a negative and significant impact on farm investment. Additionally, human capital and life expectancy in the current year have positive and significant effects on farm investment, while population growth rate and trade openness show negative impacts. Unique Contribution to Theory, Practice and Policy: The unique contribution of this study lies in its comprehensive analysis of the multifaceted drivers of agricultural investment in the context of climate variability in Cameroon. To promote sustainable agricultural investment, the study recommends policies that focus on building human capital through improved education and training for farmers, enhancing access to credit and financial services for the agricultural sector, managing the impact of climate variability, particularly excessive rainfall, through the development of irrigation infrastructure and the promotion of climate smart agricultural practices, and implementing strategies aimed at increasing life expectancy and overall economic development to indirectly support agricultural investment in the long run.