ECONOMY-NIGERIA: Farmers Reject Plans to Increase Cocoa Export

By Toye Olori Reprint | | Print |

Toye Olori

LAGOS, Jan 8 2002 (IPS) - Plans by the Nigerian government to increase cocoa production in a bid to boost export have been rejected by farmers.

Victor Halim Iyama, President of the Cocoa Association of Nigeria (CAN), argues that increased output by cocoa-producing countries of West Africa will weaken the price of cocoa in the international market.

“It is a simple process of demand and supply, when the supply exceeds the demand, the price naturally falls,” he argues.

“We have been meeting with buyers in the international market to have a say in the fixing of prices, but the problem has always been what to do with your cocoa, when you decide not to sell due to low price,” he wonders.

President Olusegun Obasanjo told a delegation of the Cocoa Association of Nigeria in November that the government plans to produce three million cocoa seedlings at subsidised rates to farmers in order to increase output.

According to Iyama, the government’s plans will increase production to 1.3 million tonnes from the current 130,116 tonnes per year.

“It is very easy to increase production but we have to do it gradually so that it won’t be counter-productive. Cote d’Ivoire is regretting their increased production now,” he argues.

The West African nation of Cote d’Ivoire is the largest cocoa producer in the world.

Iyama says the drop in Nigeria’s cocoa production has been a blessing for local farmers. “As of today, Nigerian farmers get 125,000 Naira (1,250 dollars) per tonne; Cote d’Ivoire 55,000 Naira (about 550 dollars) per tonne; Ghana 65,000 Naira (650 dollars) per tonne and Cameroun 71,000 Naira (710 dollars) per tonne,” he says.

Nigeria’s cocoa production has been on the decline for the past 15 years. The decline has been attributed to the problems of bush burning; pests and diseases; smuggling of cocoa beans to neighbouring countries; old age of cocoa trees and urbanisation and construction of infrastructures such as roads, buildings and factories on cocoa plantations.

Nigeria’s cocoa production stood at 130,116 tonnes last year, according to the federal ministry of agriculture. Ondo State, the largest producer in Nigeria, produced 100,000 tonnes of cocoa in 1998.

Under the London-based International Cocoa Organisation (ICO), the Nigerian government approved 1.2 billion Naira (about 12 million dollars) to the National Cocoa Improvement Committee Fund in 2001. Each of the Nigeria’s 13 cocoa-producing states is expected to contribute to the fund.

The committee, comprising the ministry of agriculture, state governors and the private sector, is tasked with the responsibility of rehabilitating old cocoa plantations through replanting programme in all the country’s 13 cocoa-producing states.

Ondo state governor, Adebayo Adefarati, announcing a contribution of 33 million Naira (about 330,000 dollars) to the fund, said: “the state is working … to encourage investors in the local manufacture of cocoa products and local consumption of the products, to reverse the trend of the present low price of cocoa”.

As part of efforts to regulate the cocoa market within the framework of globalisation and maintain a balance between supply and demand, Africa’s Cocoa Producers Alliance (CPA), ordered the destruction of about 250,000 tonnes of cocoa in the 2000/2001 season within the four cocoa-producing countries of West Africa.

The move aimed at raising the price of the commodity – in Nigeria, Ghana, Cote d’Ivoire and Cameroun – to an acceptable level and improving the quality of cocoa supplied to the world market.

Sona Ebai, CPA Secretary General, says he supports the decision of the four countries to withdraw the excess cocoa beans, because of market fundamentals as the world cocoa market had taken a turn for the worse with prices reaching a 20-year low in May 2000.

“All things being equal, the withdrawal and destruction of 250,000 tonnes of cocoa will benefit the members,” Ebai says.

The benefits include the reduction of the end-of season free stocks from 1.3 million tonnes to 913,000 tonnes, the reduction of the stock-to-grinding ratio from the current 45.2 percent to 28.7 per cent and an increase in world prices to a minimum of 924 Pounds (about 1300 dollars) per tonne.