Controlling agricultural product price volatility: An empirical analysis from Cameroon

Motivated by a significant impact of price volatility on food security and economic stability in Cameroon, this study aims to understand the factors influencing agricultural product price volatility (APPV) and formulate effective policies for mitigating its negative impact and promoting sustainable economic growth. Specifically, this research used the autoregressive distributed lag-error correction model (ARDL-ECM) to analyse the impact of agricultural productivity, agricultural product imports, population, temperature variation, gross domestic product (GDP) per capita, and government expenditure on APPV based on the annual data from 2000 to 2021. The ARDL-ECM estimation results revealed that agricultural productivity (β=4.901), agricultural product imports (β=1.012), population (β=13.635), and GDP per capita (β=2.794) were positively related to APPV, while temperature variation (β= –0.990) and government expenditure (β= –8.585) were negatively related to APPV in the long term. However, temperature variation had a positive relationship with APPV in the short term. Moreover, the Granger causality test showed that there were bidirectional causality of APPV with agricultural productivity and agricultural product imports, and unidirectional causality of APPV with population, temperature variation, GDP per capita, and government expenditure. The findings highlight the importance of public policies in stabilizing agricultural product prices by investing in agricultural research, improving access to agricultural inputs, strengthening farmer capacities, implementing climate adaptation measures, and enhancing rural infrastructure. These policies can reduce APPV, improve food security, and promote inclusive economic growth in Cameroon.