October 10, 2020

Reviving the bleak future of cocoa, palm oil production

Pre-discovery of oil in Nigeria, cocoa and palm oil production was an important part of the economy of Nigeria. Cocoa used to be the leading agricultural export of Nigeria being a major foreign exchange earner.

Women in an Eku (pit) making palm oil the old way.

By Jimoh Babatunde

Pre-discovery of oil in Nigeria, cocoa and palm oil production was an important part of the economy of Nigeria.

Cocoa used to be the leading agricultural export of Nigeria being a major foreign exchange earner.

In the 1950s, 1960s and in 1970 the country was the second-largest producer in the world but following investments in the oil sector in the 1970s and 1980s, Nigeria’s share of world output declined.

According to the International Cocoa and Confectionary Organization, Nigeria has dropped to the 7th position, a major concern among stakeholders involved in cocoa production.

International cocoa production data puts Ghana and Côte d’Ivoire ahead of Nigeria per hectare in several folds.

Ghana Cocoa Board (COCOBOD) reported a total purchase of 742,725 tonnes for the 2019/2020 cocoa season as of June 4, 2020, according to the International Cocoa Organisation (ICCO).

Côte d’Ivoire’s cumulative cocoa records, since the 2019/20 season started, established 2.043 million tonnes, down by 5.4 per cent from the 2.160 million tonnes reached during the same period in the previous season.

But in Nigeria yearly production has been nose diving. On what could be responsible for the decline?

The Board Chairman, Cocoa Research Institute of Nigeria (CRIN), Ibadan, Alhaji Abdulahi Jao, said the World Bank’s advice to scrap the cocoa coordinating body in the mid-70s and Nigeria’s compliance was the genesis of the cocoa production challenges.

“But Cote d’Ivoire was said not to have complied fully. Ghana rejected the neo-colonial advice. The results are there for all to see today.

“Those countries that refused the egregious notion are in the millionaire group of global cocoa production today,” Jao said.

Also , Professor Adegeye a retired don, who  taught and extensively researched cocoa, among other things, for close to four decades in an interview, said: “We are still not far from the traditional methods adopted by our great-grandfathers in growing cocoa and that there is a large margin between where we are and where we ought to be.”

He noted that most of our local farmers do believe that cocoa fruiting is seasonal, based on their knowledge and experience gained from old practices over the years, without updating their knowledge and practice.

ALSO READ: Oil Palm industry deserves more attention for greater productivity — Iyang

Professor Adegeye advised that the old cocoa trees should be replaced with new ones, which should have been well-groomed at the nursery.

“Cocoa seedlings should be grown in nutrient-rich soil (use of local manure is encouraged), they should be well shaded and kept insect-free, so as to have a healthy tree.

Professor Adegeye’s account of a healthy tree is one that gives, on average, three kilograms of cocoa beans, which means 1,000 cocoa trees will give an average of three tons of cocoa beans, compared to what is obtainable on most old cocoa trees.

He said  the future of cocoa farming in Nigeria is dependent on discarding old production practices and embrace new technology, encouraging younger generations into the cocoa enterprise and the promotion of cocoa value addition at its grass root.

President, Cocoa Framers Association of Nigeria (CFAN), Mr Adeola Adegoke, admitted that challenges include lack of access to improved cocoa seedlings, finance, manpower and cocoa agro-chemicals.

“Smallholders farmers are affected…. the kind of sustainability assistance which smallholders enjoy in Cote D’Ivoire, Cameroon and Ghana is not forthcoming here.”

He disclosed that each farmer in Nigeria is left to source for cocoa production inputs, such as quality seedlings, fungicide, insecticide and fertilizer.

Way out

Successive governments in the country since the advent of democracy knowing the importance of this cash crop to the economy, continued to roll out plans to restore the old glory of cocoa.

Olusegun Obasanjo led government sent the Cocoa Rebirth Bill to the National Assembly. Its promulgation into law led to the setting up of the National Cocoa Development Committee (NCDC) whose preoccupation was the development of the produce through the provision of an enabling environment for its production, processing, packaging and export.

Under the Jonathan’s administration, the then Minister of Agriculture, who is now the President of the African Development bank, Akinwumi Adesina, came up with the Cocoa Transformation Agenda.

Today, the government through the Central Bank of Nigeria has come up with another program meant to  transform cocoa production in the country and make it  a leading exporter of the product in the world.

The Cocoa Farmers Association of Nigeria (CFAN) secured over N700 million through the Central Bank of Nigeria’s (CBN’s) Anchor Borrowers’ scheme with members getting inputs.

The inauguration of the distribution of the inputs took  place during the week  in Akure, Ondo State capital, with payment of cash to the participating farmers through Wema Bank.

President of the association, Comrade Adeola Adegoke, disclosed that each farmer got N592,332 in cash and inputs for maintaining about three hectares of existing cocoa plantations, which translate to over N723,237,372 million to the first batch of 1,221 participating farmers in 10 cocoa producing states.

Each of the participating states would flag off the distribution of the inputs, such as pesticides, insecticides and fungicides, among others.

N197,444 per hectare is allocated per hectare, and three hectares are calculated for each farmer, according to President of CFAN, Adegoke, through the Anchor Borrowers’ scheme.

“They are partnering with us to bring the first batch of beneficiaries into the scheme,” he said.

The loan, Adegoke added, attracts a nine-per cent interest rate payable within 18 months.

It is expected that the loan, for good agricultural practices (GAP), would increase beneficiaries’ productivity from about 350kg of cocoa beans per hectare to about 600kgs.

He believed that such interventions would help to restore Nigeria to path of cocoa productivity.

The participating states are Ondo State (365 cocoa farmers); Edo State (214 farmers); Cross River (74 farmers) Ekiti State (38 farmers); Osun State (193); Kwara State (43); Ogun State (118); Oyo State (156); Delta State (17) and Abia State (4).

He commended the CBN for the loans and the inputs.

Meanwhile, their counterparts in the palm oil sector are not jubilating yet on the Central Bank’s released of fund for the sector.

The Central Bank disclosed recently that as at  April this year that  it had disbursed N34.34b to major oil palm companies, with a plan to plant new 100,000 hectares of Palm trees by 2025, starting with 20,000 hectares in 2020.

The BOT Chairnan, National palm produce Association of Nigeria, Chief  Olatujoye Henry Olugbenga, said “We need to first ask who received the disbursement and what capacity they provide to benefit Nigerians.

“CBN should desist from rolling out billions on paper while the resultant effect is not noticed in the macroeconomy.

ALSO READ: Obaseki restates commitment to economic diversification, food security, others

He added “Personally, I believed only CBN knows what parameters she has used to get to whosoever have benefitted but to us in the industry, we have not seen the impact. If what they proclaimed to have released to the industry is anything to go by,  they should be able to make public what it translate to in plantation addition.

But, Managing Director, Calabar Oil Palm Estate, Mr Muyi Ladoja, said oil palm is capital-intensive, and one hectare of oil palm farm costs between $5,000 and $10,000 to develop. This retards deepening oil palm sector in the absence of uncoordinated financial support.

Major challenges he identified include land clearing, costs of seedlings, inputs such as fertiliser, agro-chemicals and labour.

He said: “With all of those costs, the Federal Government, through the CBN, allows you to borrow at nine per cent, but the tenor of that borrowing is so short that you have not even started producing before you start to pay back.

“You start paying interest from day zero. You need at least a loan that will take 10 years before you start paying, without payment of interest from the start. You can spread the interest with the capital for the next 20 years.

“But here is the problem: when you borrow this money, it does not encourage, as it is now, the development of anything from the scratch. I repeat, it does not encourage starting a farm from the scratch.”

He argued that if Nigeria wants to deepen production and the value chain, oil palm funding must start from zero, not from 50 per cent of the operations, saying, only non-indigenous companies from Malaysia, Thailand, Indonesia and Singapore have cheaper capital at about three per cent.

Ladoja added: “We look at it from a more practical point of view. The CBN loan is available, but the conditions of accessing it are what are very difficult. For you to borrow, you need a big balance sheet. And a lot of smallholders do not have the balance sheets.”

General Manager, Calabar Oil Palm Estate, Anthony Awelewa Rotimi, said  if the government pays attention to farmers, where inputs, land clearing and support are given before returns come in, a lot of farmers would return to cocoa and oil palm farming, and their production would begin to rebound, he advised.

“Our country should not just let foreigners take over the farming industry because they have cheaper resources from their countries, which is an incentive from their governments,” he warns.

“And even when we package incentives of funding in our country, it is often tailored to favour foreigners, because indigenous players, one way or the other, are schemed out because of heavy collaterals and all that.

“Foreigners are still the ones getting agricultural incentives in our own countries. So, we need to actually re-engineer our entire processes, and see that we must survive as a nation.”