BASED on the volume of cocoa output from the Niger Delta region and the number of cocoa farmers there, a new report says the future of Nigerian cocoa production lies in the region.
The output of Nigerian cocoa beans for three years, between 2014/15 and 2016/17 was 620,000 metric tons and Niger Delta Delta states accounted for 546, 822 metric tons of the total output, revealed Cocoa Value Chain Assessment Report.
In the report unveiled by the Foundation for Partnership Initiative in the Niger Delta (PIND), 88 per cent of the total cocoa output for those years was produced by the Niger Delta states.
“There are 120, 000 active cocoa farmers in the Niger Delta and 66 per cent of them have plantations with size ranging from one to five hectare of land,” says Executive Director of PIND, Dara Akala, while presenting the report at a Cocoa Stakeholders’ round-table held in Akure, Ondo State capital.
According to him, the report was the result of a study carried out by the Foundation to provide a detailed scoping and value chain analyses of the cocoa sector in the Niger Delta.
He explained that PIND is already implementing interventions in aquaculture, cassava, poultry and palm oil sectors adding that with some of the interventions attaining full maturity and reaching scale, the Foundation is now expanding into the cocoa sector.
“The cocoa sector has growth potential and ability to increase income and employment,” he said.
He said the Foundation’s vision, within five years, is that the cocoa industry in the Niger Delta will be characterised by improved linkages and communications between smallholder farmers and the processors and exporters, with mutual incentives.
Akala who was represented by PIND’s Market Systems Development Manager, James Elekwachi added that cocoa accounted for more than 30 percent of Nigeria’s agricultural export and generated a total of $774.6million in 2016 out of which $83.6million came from exportation of cocoa derivatives including cocoa butter and cocoa paste.
In 2016, the report said agriculture accounted for 24.2 per cent of Nigeria’s Gross Domestic Product (GDP), noting that the sector is highly concentrated on crop production which accounts for 90 per cent output.
“Fishery, forestry and livestock, account for remaining 10 per cent,” the report said, insisting that the country’s agricultural potential is still high because Nigeria 82million hectares of arable land, out of which only 34million hectares have been cultivated.
It remarked that Nigeria cocoa production in the past 17 years has witnessed some volatility, noting that production has been fairly flat, “with peaks and valleys due to the cyclicality of cocoa tree production and weather conditions.”
“It was discovered from the study that for one hectare of a cocoa farm in Ondo State, the 7th year is the break-even point.”
On the cocoa processing industry, the report disclosed that the industry is divided between the processing industry (intermediate processors and finished good processors) and exporters.
While noting that local immediate processing companies produce cocoa liquor, cocoa butter and cocoa cake, it said a number of them are already grappling for survival and some have closed down the operation.
“Of the 17 intermediate processing companies, only five are functional with combined capacity utilisation of 50, 000 metric ton and four of them are in Ondo State,” the report said.
However, it stressed, that an estimated 90 per cent of these cocoa derivatives are exported, not including cocoa powder.
It further stated that there were 123 firms in cocoa business in Nigeria including processors and exporters, and that there are 20 regular exporters operating in the sector out of which only three of them control 50 per cent of cocoa beans export.
Small scale farmers, the report said, have no direct contact with the processors and exporters, lamenting that the awareness of sustainable production or certification to motivate better producer price among farmers in is limited to about 10 per cent of farmers in the Niger Delta region.
“If Nigerian exporters can incentivise farmers to produce more cocoa, they can sell it, so the challenge is on increasing production through increased productivity and greater area under production,” the report suggested.
“An integrated markets approach, considering economic, social and environmental dimensions is needed to improve cocoa sector competitiveness.”