By Taiwo FAROTIMI

THE postponement of the deadline for the enforcement of the European Union Deforestation Regulation (EUDR) came as a relief to Nigeria and other affected countries. However, not a few cocoa farmers in Nigeria are still in panic mode. Read the first part of this report HERE

State governments step up investments amid extension

Findings show that despite the threat, state governments and other stakeholders in the industry continue to invest in the sector. For instance, the Osun State government is putting together a funding scheme that will involve the Bank of Industry, among others, to assist cocoa farmers and project the contribution of the state to the sector.

In terms of investment in cocoa production, the Cross River State appears to stand out as one sub-national government that has taken bold steps in improving participation. Though not totally unmindful of the EUDR threat, the state government recently kick-started a process of establishing new cocoa estates.

On June 13, 2024, Johnson Ebokpo, the commissioner for agriculture and irrigation in Cross River State, hosted a meeting of stakeholders in the cocoa industry in Calabar, to brief them about the plan of the government to establish cocoa estates in six local government areas of the state.

The commissioner listed the areas earmarked for the proposed estates as: Akamkpa, Akpabuyo, Bekwara, Odukpani, Obubra, and Ikom local government areas. These, according to him, are places where land suitability tests, community engagements and other procedures had been done.

He said the government was anticipating a public-private partnership model, where government would collaborate with the communities and private sector investors to develop the proposed estates.

He said, the current administration in the state deserves commendation in this regard, as it is continuing with the programme started by those before it.

Hurdles

However, it appears the state government may also have to do more to encourage the farmers.

The administrative secretary of Cocoa Association of Nigeria (CAN) Egim Etta Tawo, said, “There are no roads leading into the farms. The government has about four cocoa estates in this place which it leases out. But there are some years that farms were abandoned because of inability to manage them.”

The fear is that if the challenges are not addressed holistically, whatever investment that is put in the sector may end up in the drain. The challenges of a dearth of government support and logistics would have been compounded by the rejection of the produce had the EU not extended the initial deadline.

Yet, the looming danger then did not discourage efforts for the increase of cocoa production and new converts into the trade, even as there appears to be healthy competition between Cross River and Ondo States over which of them is the highest producer of cocoa in the country. Cocoa farmers in Cross River claim that because the produce is taken out of the state to Ondo and Lagos for processing before being exported, Cross River loses its cocoa identity, and the production gets unfairly attributed to Ondo.

Their counterparts in Ondo State also claim that they had always been in the forefront in the production of the farm produce. Last December, Bassey Otu, the Cross River State governor, expressed the sentiment that the actual production status of the state was understated.

He was represented at the inauguration of a new executive of the CFAN, where the national president had said that Cross River was on its way to upstaging Ondo as the largest producer of cocoa.

The reason adduced by the CFAN president for his projection was that while Cross River had youths taking up cocoa farming in the state, those in Ondo were between the ages of 55 and 60 years.

Awolumate shared the fears of the CFAN president. He too is concerned about the age of farmers in Ondo State, and more by the fact that majority of them now adopt a method that cedes farming proper to a third party resulting in a sharing formula (one third to those managing the farm, and two-third to the owner) on what the farm manager declares.

He also said that the youths in the southwest geopolitical zone, having become largely urbanised, are too reluctant to take up farming. This is more so as cocoa takes time to yield results, and that in an era when young Nigerians are too focused on getting rich fast.

He lamented that some little efforts by focused political leaders in the zone also met with frustration because of the pervading state of insecurity in the country.

For instance, he said, the 10, 000 hectares of cocoa plantation set up by the administration of late Rotimi Akeredolu, at Jugbere in Owo Local government area of the state, had to be abandoned because of insecurity.

Unfortunately, the youth who were persuaded by the former governor to return to the farm had to run for their lives when bandits and kidnappers took over the forests in the state.  Awolumate fears that it would be difficult to get them to return to the farm, notwithstanding the soaring prices of cocoa in the market.

In August last year, Akin Olotu, senior special adviser on agriculture and agribusiness to former Governor Akeredolu, expressed the concerns of the state government on this. Speaking on the importance of cocoa to the economy, for revenue and job creation, and canvassing for state police, he said, “If farmers are secured today, I can tell you that we will be self-sufficient in food in Ondo State. The security architecture of this country is not working at all, and the problem is from the national assembly.”

He said that the development of cocoa, among other crops, will bring “tremendous impact on the economy.”

So, who produces more cocoa, Ondo or Cross River state?  The executive director and CEO, Cocoa Research Institute of Nigeria (CRIN), Patrick Olusanmi Adebola, whose institute should know the true position, said, “The rivalry is always there and luckily for us both states are in Nigeria. So, for us, as a research institute, we are not really bothered about which state produces more but we know that these two states are the ones at the forefront of cocoa production in the country, so it doesn’t really matter.”

The level of official commitment in Cross River indicates that even if Ondo is leading, it is getting fierce competition from the south-south state. That vigour is not visible in Akure, the capital of Ondo State.

The commissioner for agriculture, Olayato Aribo, could not be reached for comments on what the state is doing to respond to the EUDR issue. His Cross River State counterpart, Ebokpo, also did not respond to several efforts made by our reporter to speak with him on the issue.

The efforts included a letter requesting an interview, which officials of the ministry said had to be done. He did not return several calls made to his mobile telephone line. He only responded to a short message service saying he would not be at a designated place he was earlier scheduled to be where he could have given an interview to the reporter.

The commissioner did speak on the response of his government to the EUDR threat, during the meeting with stakeholders in June. He promised that the government initiative on the six cocoa estates would comply with the regulation, which emphasises traceability of the cocoa source, avoidance of the use of child, and forced labour and the preservation of the forest.

He also said steps will be taken to restore degraded areas through sustainable agro-forestry programmes “by inter-cropping such areas with shade trees to balance the ecosystem and preserve biodiversity, hence the ministry’s collaboration with the state forestry commission.”

Cross River may be following the example of Edo State in this regard.  Ebokpo also disclosed that in the new estates, cocoa farms and allottees would be digitally enumerated, identified and deemed suitable, so that they can be traced and monitored to operate the farms.

By the time Ebokpo was addressing that meeting, the initial deadline was six months away, and aside from some uncoordinated individual or corporate efforts by exporters, there was virtually no strong movement from the government to address the challenge.

The extension may have given the government the opportunity to put its house in order and apply speed in what is being done to stave off the ban. For this to be realised the authorities must not relax now, believing that the extension allows much time to foot drag on what needs to be done.

In Delta State,  the special adviser to the state governor on trade and investment, Love Shimite, said the government, upon learning about the EU threat, wrote to the stakeholders, who include the ministries of agriculture, environment, budget and planning, the CBN, Bank of Industry, Bank of Agriculture, Koko Free Trade Zone, National Agency for Food and Drug Administration and Control (NAFDAC); Nigerian Immigration Service, (NIS), Delta Chambers of Commerce, Industry, Mines and Agriculture, as well as the Nigerian Ports Authority (NPA).

She said, “They put together their positions on what has been done, what is being done and what their responses are. We are still waiting for a few other stakeholders to send in their papers, and we are compiling them. By September 30, 2024, our policy document would be ready, and we will take it to the EU.”

We could not confirm at press time if that submission was made, but observers say the state need not go to the EU to explain the level of preparation. Rather, it should collaborate with other stakeholders, at the federal and state levels, look at the EU document and get down to work on what should be done right.

The appeal by the national the cocoa management committee and the CFAN, whose leader,  Adegoke, said Nigeria’s $770 million industry would be in jeopardy if the government fails to address the problem, may not have done the magic on the extension of deadline.

Awolumate said Nigeria’s contribution to cocoa production at the international level was not strong enough to persuade the EU to reconsider its decision. Rather, Nigeria is merely benefiting from the pressures mounted by countries like the United States and the moves by Russia to capitalise on the situation to hijack the West African cocoa market.

Besides that, corporate bodies in Europe who use cocoa for production of chocolate and other products were apprehensive that the decision by the EU may deny them the product for use in the factories. While there have been efforts to introduce alternatives to cocoa like carrots, it has been discovered that they would not get the same aroma that cocoa gives to chocolate.

Adegoke, however, said already there were training sessions organised for farmers and that the pressure on the government is now yielding good results.

That optimism is supported by  the director of trade information at the NEPC, Joe Itah, who said the authorities are already addressing the issues, including tree planting and deliberate attempts at discouraging deforestation. In April this year, the NCMC and the International Finance Corporation had a hybrid round-table discussion involving over 100 stakeholders and value chain actors in the cocoa industry.

The takeaways from that discussion were debated at a meeting of the NCMC in Abuja in June.  They include the urgent need for Nigeria to prepare for the EUDR assessment check. The EU representative at the meeting also pledged support for the assessment check, as done for Ghana, Cameroon and Ivory Coast. That meeting affirmed the need for the federal government to weigh in on the matter.

It also asked for a central cocoa database, comprising registration of all farms, farmers, processors, exporters, intermediation services providers and buying agents, as well as relevant MDAs across the 22 cocoa producing states.

This database will be necessary for ease of traceability/certification, forest maps, legality and due diligence. The meeting was told that the available limited traceability/certification is used by export and processing companies for their certification protocols.

The NCMC was mandated to facilitate the encouragement of private sector operators with the traceability/certification, deforestation-free and legality compliance records to pool them together for the country. It was disclosed that the mapping of cocoa small-scale holders may have reached 60 per cent.

While the meeting agreed on capacity building for staff of ministries, departments and agencies and research institutes and other relevant agencies, it also said that cocoa-specific protocol officers will have desks at the ministries, research institutes and other agencies.

The June meeting, the fourth by the NCMC, since it was set up in 2022, resolved that the committee will metamorphose into national cocoa board, as it is in Ghana and Ivory Coast. However, Nigeria’s cocoa board will undertake partial regulation aimed at ensuring quality control, transparency, traceability and sustainability.

These resolutions must have influenced the positive outlook espoused by Adebola, who incidentally was a signatory to the communique at the meeting.

“The national cocoa management committee has been saddled with the responsibilities to implement the Nigerian national cocoa development plan, which was put together and approved by the federal executive council (FEC). All these things are there and once the implementation starts, it includes a holistic approach to addressing all the problems across all the cocoa value chain,” Adebola stated.

Though it may have started late, some analysts point out that it is apparent that the government is no longer taking things for granted in efforts to save the cocoa industry from crisis.

On October 8, 2024, the minister, who will chair the task-force, told members, “We are facing a critical and urgent task. We must work to meet these (EUDR) standards and secure Nigeria’s position in the global market.”

It is certain that the country is not alone in the dilemma. Those who are in the same boat joined the federal government, on the eve of the release of the new EU document, to re-echo the plea for extension of deadline.

Ecuador, Argentina, Indonesia, Paraguay, Brazil, Honduras, Columbia and Peru added their voices to the call for extension of deadline, claiming, among other things, that the EU needed to provide clarity on some of the conditions specified in the EUDR document. Out of the eight countries, only Ecuador and Indonesia are leading Nigeria in the production of cocoa. Brazil, Peru and Columbia are trailing behind.

However, Indonesia, being world’s leader in oil palm production and the fourth highest exporter of coffee, has a stake, perhaps even more than Nigeria. What is important now is that the federal government, which has been accused of being slow on this issue, is currently taking steps to give the impression that it is lighting the way for solutions.

While the NCMC was spearheading efforts at addressing the demands of the EU, other agencies were also looking at the area of quality control for the agricultural products that would be packaged for export in Nigeria.

At a forum earlier this year in Lagos, NAFDAC met with the Cocoa Processors Association of Nigeria (CPAN), the Network of Practising Non-oil Exporters of Nigeria, Lagos Chamber of Commerce, Industry, Mines and Agriculture, on the NAFDAC Export Regulations 2024.

NAFDAC had posted a draft regulation on cocoa on its website, asking for comments from the public. That, sort of, put the processors on edge, necessitating the meeting. A professor and director-general of NAFDAC, Mojisola Adeyeye, told the stakeholders that the regulations were designed to ensure the standardisation of goods exported from Nigeria, so that we can minimise the occurrences of rejection of cocoa, as well as other products being exported to other countries.

She said, “As you are all aware, often our regulated products, which are packaged and, for most of the time, exported without NAFDAC certification, failed at the entry borders and reports have accumulated to put Nigeria at a disadvantage in international commerce.”

The investment by the states and federal government with the purpose of expanding production is a welcome development. However, there is one area that continues to suffer neglect. That is the area of value addition.

Adegoke, when asked what percentage of the cocoa beans is being used by processors in Nigeria, if farmers meet with rejection in Europe and there is no credible alternative to take the volume that the country produces, said, “Not up to 10 per cent of what we churn out.”

Rejection, therefore, will be a national disaster, as farmers who rushed into cocoa farming because of the increase in the price of cocoa will not only lose lots of investment, but also be too disappointed to return to the trade.

Moribund cocoa factories

Cocoa processing factories established before the oil boom have become moribund. The Ede cocoa processing plant, which was revamped during the administration of governor Rauf Aregbesola has become moribund once again. It was reported that the plant was attacked during the #EndSARS protest in 2020. Governor Ademola Adeleke promised recently that he would bring it back to operation.

The Ile Oluji cocoa processing plant in Ondo State, said to be the oldest, is also producing at low capacity.  The late Governor Olusegun Agagu of Ondo State established a Cocoa processing factory in Idanre, but it is now comatose.

A similar one established by a professor Ben Ayade, former governor of Cross River State, is yet to take off. The current administration in the state may need to look at making it a reality, so that value addition to cocoa beans in Nigeria will ensure that there will be ready off takers for the crop at home.

That will reduce the heavy dependence on foreign buyers of this all-important agricultural produce and also promote local production of most of the consumable imports like chocolate, cocoa butter, cocoa cake and powder.

The collapse of these industries or lack of follow up supports the belief that it is not for dearth of policy decisions to pursue value addition that Nigeria is unable to develop its products before export. The president of CALCCIMA is of the opinion that the problem is that officials do not follow up policies.

“In terms of the policy using our value addition to drive industrialisation, government officials parrot it. But when you go to the issue of actual actions, you would find that a policy exists but who is implementing that policy?” With all these factories in comatose, and hardly any other to process cocoa beans, a blockade of the agricultural product on the international market will spell doom for both farmers and the government.

There will be losses, even likely loss of human lives, of revenue at the personal and national level, and the cocoa trade may never recover from that shock. What that means is that the government must do everything at its disposal to remedy the situation.

Had the EU not backed down on the deadline, what would have been the fate of the poor farmers, who even at four months to the initial deadline were ignorant of the EUDR and so were still working hard to prepare products for the international market at the end of the year?

Faseru, a pastor, said there would have been a way out. He said, “But just to also let you know that EU is not the only one buying our cocoa, the United State’s market is there for us, the Asian market is there for us, our cocoa goes to Malaysia, Indonesia and China, beyond EU, because Nigerian cocoa has the best aroma in the world.”

With the increased production of cocoa and the interest being shown by the youth these other markets should be additions, rather than alternatives, particularly for a country where little is in place to do value addition. Besides, the loss of Nigeria may be the gain of Ghana and Ivory Coast, the two countries that now produce over two million metric tonnes of cocoa respectively.

This report, the second and concluding part, is a collaboration between the International Centre for Investigative Reporting, ICIR and Bushlink. It was supported with funds from the National Endowment for Democracy.