Efforts to revive cocoa production in Nigeria are hobbled by policy inconsistency and poor coordination, among other factors. In this report across three states in the country’s cocoa producing belt, ABIOSE ADELAJA ADAMS unveils the plight of cocoa growers.

Wearing a nose mask, Mukaila Yinusa painstakingly sprayed Ridomin, an agro-chemical used to fight black pod disease, on each cocoa tree at his two-hectare farm in Ikire, Osun State in South western Nigeria.

It is one of the steps he must take to have a good yield this year. Should he neglect to do so, he stands no chance of earning enough from his farm to take care of himself and his family – the dream of every cocoa farmer.

But this dream has not exactly come true for this 62-year-old, who inherited the farm from his father over three decades ago. Yinusa has always fallen short of his target at increasing his yield. Much of this, he explained, is due to lack of financial resources and the age of the cocoa trees.

“Cocoa farming is profitable, but the challenge facing us is that most of the trees we inherited are old and do not bear fruit as before. Secondly, we have to borrow money to buy chemicals, which are very expensive. We don’t have money. And if we don’t buy chemicals, the black pod disease can destroy our whole plantation,” he said ruefully in Yoruba.

There are approximately 300,000 cocoa farmers in Nigeria. Two-thirds of these live in the South west.

Yinusa’s experience confirms the UN Food and Agricultural Organization, FAO’s, view that cocoa trees see a drop in output after 25 years.

Pausing briefly from his spraying to explain further, Yinusa said 15 litres of Ridomin cost N450 in the market. The government, he explained, once sold to farmers at N130. “But they have not been supplying us, so we buy it at a higher price elsewhere,” he said.

According to him, the 15 litres of Ridomin, used to prevent the notorious black pod disease that can cause a permanent loss of up to 70 per cent of cocoa yield, are only enough for between 15 and  20 trees.

He is required to spray the trees twice monthly during the farming season. With the 105 trees on his plantation, he will need to spend over N100,000 monthly on Ridomin alone. It is a cost he cannot afford.

Given the country’s climate, cocoa is planted around March – April when the rains start, and harvested about 5-6 months later, depending on the onset of rainfall for that year. In other words, a farmer is expected to spray the chemicals fortnightly for a period of six months to prevent black pod disease.

When the cost of Ridomin is added to what is paid to labourers who help with weeding, mulching, pruning, watering, there is little left at the end of the season.

“We have almost nothing left because our creditors, who are also the ones who buy the cocoa from us, buy it at a very low price,” he said.

According to him, the local cocoa produce buyers pay N20,000 for a 50kg of cocoa instead of the standard price of N50,000.

Yinusa and his colleagues are just being cheated because it is those who lend them money that eventually queue up to buy the produce from them.

“We cannot raise the price. It is from them that we get loans to buy the chemicals,” he lamented.

Black pod disease infects the bark, flower, and trees with cankers, which exude a reddish gum that reduces the life of the tree and in turn, reducing the yield of the plant.

Aside from dealing with inadequate resources for chemicals and poor produce prices, cocoa farmers are also yoked with low-yielding and late-fruiting varieties of cocoa pods. This complaint challenges the claim of Minister of Agriculture, Akinwunmi Adesina, that his ministry gave out 18 million high-yielding and early-fruiting hybrid varieties of cocoa pods to farmers countrywide.

Yinusa, who is the secretary of the Cocoa Association of Nigeria in Irewole Local Government Area of Osun State, said only 20 of such high-yielding varieties reached his local chapter of the body and that this was shared by 83 farmers. “We plant 105 on a hectare. If they give 20 pods (and in a pod, you can find up to 20 seeds, out of which not all will grow), it becomes insignificant,” he lamented.

Yinusa was critical of the distribution model employed by the Agriculture Ministry, which he said gave the pods to the All Farmers Association of Nigeria, AFAN, rather than directly to the cocoa growers.

The three main cocoa growing states in the country are Osun, Ondo and Cross River and they contribute about 68 per cent of Nigeria’s total yearly output of between 250,000-350,000 metric tonnes.

Compared to Ghana which produces between 850,000 to one million tonnes and Cote d’Ivoire, which produces between 1.2 million and 1.4 million tonnes, current estimates show that in Nigeria the 350,000 metric tonnes produced in 2014, though an improvement, may not be repeated or exceeded soon.

The consistent figure has been 250,000 metric tons, but Adesina said that Nigeria aims at doubling this figure by producing 500,000 metric tonnes by 2018.

Another cocoa farmer, Kasali Ogundele, who is not sure of his age but looks slightly over 60, alleged that the government does not consider them important the way governments in other cocoa-producing countries consider their colleagues. “In Ghana”, he said, “Ridomin and Gamalin are free.”

Even when the government brings chemicals, Kasali alleged, it does so close to the end of the planting season. The implication is that farmers are living in the basement of existence, while other individuals and the government make money from their toil.

For instance, in 2014, Nigeria made $1.3billion from cocoa export, according to the Ministry of Trade, Industry and Investment. This has not reflected in the conditions of farmers, who make about N100, 000 per year.

Farmer’s poor income

Robo Adhuze, director, Cocoa Development Initiative, CDI, in Akure, Ondo State, works with local farmers. He said cocoa is currently not profitable for farmers because they earn poorly from it.

“The arithmetic is clear. Cocoa sells for about $3,000 per tonne. That is approximately N450, 000,” he stated.

“An average small holder farmer owns two hectares of land from which he can produce one tonne.  If he removes money for labour, which may cost him about N15,000 per month/N180,000 per year per person, and he needs at least four workers per hectare, that is N720,000 already spent. If he sells two tonnes, that is N900,000. He is then left with N180,000. From this sum, he is going to buy agro-chemicals, fertilizers, cutlass, watering can, etc.,” he added.

In some cases, Adhuze said, the farmer’s yield may be lower than two tonnes because of yield loss, bad quality cocoa and delay in onset of rains (cocoa is largely rain-dependent).

“As a result, his own personal gain cannot be more than N100,000,” he concluded.

Why so poor?

Adhuze believes that the reason cocoa farmers are so poor is because of poor government policy on cocoa in the country. These poor policies, he said, affect the farmers’ access to loan and government support, which are very important.

The CDI director opined that the fortune of the cocoa industry in the country began to fall when the cocoa board was scrapped.

The Cocoa Marketing Board, he said, was the body responsible for pricing, standardization and training and retraining of farmers in new agricultural techniques.

“Farmers were in co-operatives. So, whatever support the government was channelling at that time went through the cooperatives. There was group marketing and they could do group bargaining, build strong business entities which can go to the bank,” he observed.

He lamented that the demise of the board on account of deregulation threw the market open.

Thus, Nigeria started losing pricing in terms of discounting to bad quality, as there was nobody to regulate it, and importers started going directly to farmers to buy.

Cocoa Economics

Nigeria is currently the world’s fourth largest producer of cocoa, after Ivory Coast, Ghana and Indonesia. The country has about 810,000 hectares dedicated to cocoa cultivation and currently contributes five per cent of global cocoa output. Cote d’Ivoire contributes 40%, Ghana, 21% and Indonesia 10 % respectively.

But Nigeria used to be the second largest in the 1960s. That was before the massive oil revenues of the 1970s led to the neglect of the industry and bred overdependence on oil.

After petroleum, cocoa is Nigeria’s most important export, contributing more than 80 per cent of export earnings, according to the Federal Ministry of Trade, Industry and Investment. A March 2015 report by the ministry shows that the country’s cocoa export earnings come largely from cocoa beans and by-products such as cocoa butter, cocoa powder and cake.

“We are looking at a multibillion dollar sector,” Adhuze said.

It is no exaggeration. Cote d ‘Ivoire earned $5billion, Ghana $3billion and Indonesia, $1.2billion in 2014.

Cocoa value chain

Markets for Africa’s cocoa exist in European countries such as Netherlands, France, Germany, the United Kingdom and the United States of America, where demands for chocolate are huge. Experts therefore believe that the country will earn more than it currently does from cocoa  if certain issues are addressed.

Felix Oladunjoye , Executive Secretary of Cocoa Processors Association of Nigeria, CPAN, said that one of the issues government needs to address is value addition to the cocoa value chain.

Value addition, in this context, refers to processing cocoa into other intermediate forms like cocoa powder, cake, butter and liquor that earn more and can create employment opportunities.

For instance, only 4 per cent of cocoa beans is processed in Nigeria before being exported.

Oladunjoye listed 11 cocoa processing factories in Nigeria. Of these, only four are currently non-functional.

“It is in the grinding and value addition that lies huge opportunity for investment and industrialization, because during value addition cocoa cakes, powder, butter can be derived, which are useful by-products generating employments,” Oladunjoye stated.

But these factories are technically dead, as high cost of production, epileptic power supply, lack of access to credit and policy inconsistency have killed them, he said.

A visit to the Cocoa Industry at Ogba Industrial Estate in Lagos shows this to be true.

What looks like a multimillion dollar factory – N1.5 billion in capital investment with an installed capacity of 15,000 metric tonnes – is in reality dead. Tall exhaust pipes that used to send smoke into the air are now rusty. The factory is overgrown with weeds, while almost every part of the yard has now been turned into parking lot for trailers owned by some other companies.

A manager of the factory, who gave his name simply as Sulaiman, told our reporter that it stopped production in 2008.

Inside the compound, security men loitered or slept on benches under a tree shade.

During its productive years, the company, owned by the Odua Investment Group, produced Vitalo, a popular beverage, as well as cocoa butter, cocoa powder and cake.

A notice on the company’s website says it “is in the business of cocoa butter and cake, while also producing a popular beverage known as Vitalo”.

It goes on to explain, however, that “the company had become moribund due to old and obsolete equipment installed in 1967” and that an attempt “to rejuvenate the company through a Build Operate and Transfer agreement entered into with Multi-Trex Investment Limited, a cocoa processing company, did not yield the desired result and was terminated”.

Ironically, the company to which Cocoa Industries Limited looked for the failed rescue, Muti-Trex Integrated Food Plc, with an installed capacity of 65,000metric tonnes, is also grounded.

Oladunjoye, an accountant who had worked on the Cocoa Desk at the Cadbury Group, said: “This company has a capital investment of N14 billion with an annual turnover in export of $3.48 million. It can directly employ at least 200 people and indirectly 2,000. But it is technically dead now,” he lamented.

More losses

Oladunjoye is convinced that apart from export earnings, Nigeria is losing a lot in terms of foreign direct investments.

“A lot of money is going into cocoa investment in Ghana and others, but we are losing so much because we are not organized,” he reckoned.

For instance, he said, the Federal Ministry of Agriculture has launched a project to train farmers on modern methods, distributed new seedlings and rehabilitated moribund cocoa plantations. The Ondo State government is also doing same.

According to the Agriculture Minister, 10,800 farmers in 270 communities in seven cocoa-producing states were being trained in farm rehabilitation and maintenance among others as at 2014.

Oladunjoye recognises that such efforts are being made, but questions the lack of coordination with other stakeholders.

“It is not that the Agriculture Ministry is not doing these things, but the problem we have is a conflict of effort and lack of coordination. As a matter of fact, if you go to Cross River, you will see what their government is doing. You will see young men, fresh from NYSC going into cocoa farming. Every state is doing their own, but if there is an organization that can harness and harmonize all the international and local support for cocoa the industry will be better,” he reasoned.

Comparing notes

In a comparative analysis with other cocoa exporters, it is clear Nigeria lacks a policy with the vitality for developing cocoa as a main foreign exchange earner. Ivory Coast, for instance, has a Stabilization Fund for cocoa since 1978. The country has well equipped warehouses, a liberalized cocoa market, an aid policy and a centralized body called Consel di CafeCacao, which is responsible for management, regulation, development and price stabilization.

Similarly, Ghana has an existing Cocoa Board, strong quality assurance, a partially liberalized market, improved farming practice and a cocoa Hi-technology programme to promote use of fertilizers on farms.

Indonesia also has a $359million Cocoa Fund, set up in 2009, and a Cocoa Commission.

A policy somersault?

In Nigeria, all these structures and policies are missing.

“What we have in Nigeria is policy inconsistency. I was part of the committee that drafted the proposal for the Cocoa Corporation. But now, all that is jettisoned because they said they could not get the approval of the Federal Executive Council,” Oladunjoye lamented.

In an attempt to revive cocoa farming, a committee was set up to create Cocoa Corporation of Nigeria. The 25-person committee was drawn from cocoa farmers, representatives from the Southwest and South- south, representatives of exporters of cocoa beans, NGOs, United States Agency for International Development, USAID, to chart a path for the operations of the corporation.

The corporation would have performed the role of a marketing board, including price regulation, facilitating access to loans, adding value to the value chain and so on. But that initiative appears dead now.

State efforts

In Akure, Ondo State, however, the chairman of the Cocoa Revolution Project, Jibayo Oyebade spoke on how the government is working to revive cocoa and re-train farmers.

Our reporter visited the 2,000-hectare cocoa plantation of Oda Farms, which is about 15 kilometres from Akure town. Despite the short distance to the state capital, travel time could range between 45-60 minutes because of the bad road.

At this farm, 300 farm workers, mostly wives and daughters of the ageing cocoa farmers, resume daily to tend to the cocoa trees.

The cocoa trees have been outnumbered and dwarfed by luxuriant trees and are no longer fruiting.

As early as 7.00 am, the farm came alive with activities.  The men drove around in tractors, clearing forested farmlands, while the women weeded, watered or applied fertilizers to the soil.

Special Adviser to the Ondo State Governor on Agriculture, Isaac Olorunfemi, told the icirnigeria.org that the objective of the project is to return the state to its position as the country’s leading cocoa producer.

“We are ensuring farmers know the new procedures such as under-brushing, farm maintenance, fermentation, drying, record keeping, so we can produce premium cocoa,” he stated.