President, Cocoa Farmers Association of Nigeria (CFAN), Mr Adeola Adegoke, says Nigeria loses N60 billion annually due to the non-collection of Living Income Differential (LID) for cocoa producers in the country.
Mr Adegoke stated this recently in Abuja at a workshop organised by the Agricultural Policy Research in Africa, in collaboration with the Department of Agricultural Economics, University of Ibadan, with the theme: ‘Cocoa commercialisation in Nigeria: Issues, prospects and policy requirements.’
He said that “there is a need for the government to follow international best practices that support the production of cocoa in the world.”
Speaking further, he bemoaned the fact that many producers of cocoa in the country receive a very low share of the cocoa revenues due to the global oversupply of cocoa; hence, the reason why they live in extreme poverty.
According to him, the cocoa sectors in Ghana and in Côte d’Ivoire establish a fixed ‘floor’ price of cocoa annually and applies a ‘differential’ of US$400/tonne above the floor price to increase income for cocoa producers to help them achieve a living income.
“As of today, Ivory Coast is producing about 2.5 million metric tonnes of cocoa. Ghana is producing about 800,000 – 1million tonnes of cocoa. But when you look at what Nigeria is producing side-by-side with our land resources and the number of cocoa farmers that we have, it is clear that we can surpass what these two countries are producing. That is why, as smallholder farmers, we have been able to analyse the challenges responsible for our low productivity.
“In Ivory Coast, they produce nothing less than 800 – 1000kg of cocoa per hectare; but in Nigeria, it is an average of 350 – 400kg per hectare. This is unacceptable because it makes Nigerian cocoa farmers poorer.
“In Ghana today, each farmer collects $400 on each tonne of cocoa after the falling price. Same in Ivory Coast and that’s why we believe that Nigeria must begin to collect Living Income Differential (LID). The refusal to collect it makes us lose N60 billion annually,” he said.
He noted that LID is a cocoa-pricing agreement first launched in Côte d’Ivoire and Ghana to help cocoa farmers escape from poverty by adding a premium to the prevailing market price.
Adegoke observed the foreign-exchange deficit being experienced at the moment could only be solved by the cocoa economy.
He stated that there must be certifications, traceability to all cocoa farmers and the number of hectares of land on which they farm as well as the type of cocoa crops they produce.
While speaking on the rationale behind putting up a workshop, he noted that it was meant to review cocoa production policies and strengthen the production of cocoa in the country.
Adegoke said that the CFAN was poised to lead the country to regain its lost glory among cocoa-producing countries in the world, noting that in the 1960s, Nigeria was producing 590,000 metric tonnes of cocoa and was adjudged the second in the world.
Also speaking at the event, the chairman of the House Committee on Agricultural Colleges, Universities and Institutions of Agriculture, Munil Uba-Danabundi, said cocoa farming is one of the most sustainable investments that will give employment to the teeming Nigerian youths.
“There are about 22 states in the country that can farm cocoa and the potentials are enormous for the country,” he said.
He, however, suggested that policies that had been formulated on the production and sustainability of the cocoa economy should be backed by legislation, adding that the problem with remarkable policies has been the issue of implementation.
“Policies have been very good in this country, but implementation has been something else. We are not going to leave policies at the ministry level anymore without being backed by law,” he added.
In her remarks, the country lead and principal investigator of APRA (Nigeria), Dr Adeola Olajide, called on the government to create a cocoa utilisation and consumption policy, saying that “we must consume our locally-produced cocoa.”
While she called for a cocoa-web development policy and money-value chains in terms of beverages and cosmetics, she stressed the need for processing zones, agricultural logistics and services for the cocoa sector.
“We need processing zones and we need agricultural logistics and services for the cocoa sector. With the role that cocoa plays in income generation, it should be given priority,” she said.
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