Cocoa summit: Stakeholders consider new body to regulate affairs

Agric Minister, chief Audu Ogbeh, Minister of State For industry  and Trade, Aisha Abubakar and CEO NEPC, Mr, Segun Awolowo at the International Cocoa Summit exhibition.

·       *FG regrets set back

Stakeholders in cocoa productivity have decided to move the industry forward by having a central body similar to the Cocoa Board of olden days to govern, regulate and serve as a body to guarantee loans for farmers, among other functions just as the Federal Government (FG) expressed its regret for the neglect of the sub sector that have been a strong engine power of the country in term of foreign earning in the past. Also, Taraba state governor, Arc. Darius Dickson Ishaku announced plans to reenact the semblance of the defunct Cocoa Board very soon.

The stakeholders recalled that the present level of low production capacity of cocoa in Nigeria was due to the abolition of the marketing board during former Military President, Gen. Ibrahim Babagida saying the need to bring back a modified body that would serve in the capacity of control and regulation towards ensuring standard and growth rebirth is inevitable. This was one of the high points of the recently concluded International Cocoa Summit held in Abuja.

 A former executive director of Cocoa Research Institute of Nigeria (CRIN), Prof Malachy Akoroda set the ball rolling by challenging the stakeholders to take the bull by the horn and constitute a body to take charge of the activities of the industry saying they should not expect a government that rakes in just 0.7% of its total foreign exchange earnings from cocoa to effectively make a change for the produce as he explained that the proposed body should include players from the government and different groups making up the stakeholders.

In what looks as affiliation with the above suggestion, already, Governor Ishaku who was represented by the state’s commissioner for commerce and industry, Alhaji Illyasu Ajibu said the task of setting up the necessary mechanism had been given to the deputy governor of the state with technical support coming from the state’s ministries of commerce and industry and agriculture pointed the government is very passionate in the development of the industry for economic creation in the state.

 

 The stakeholders noted various challenges that hinder the output of cocoa produced as  'inconsistency in government policies, inadequate funding of Research and Development, absence of structured and viable cocoa stakeholder groups, lack of synergy between Research institutions and Farmers, problem of identifying the right sector players, lack of synergy among the key regulatory and quality control agencies, stringent measures for accessing finance- for players in the technical' industrial, infrastructure deficit, low and inadequate capacity and technical know-how of the farmers, lack of adequate incentives, lack Of awareness on the provision of Sanitary and –Phyto-sanitory (SP) Measures. In addition to lack of appropriate tools to adhere to SPS regulations,  Short term rather than long term loan with high interest rates; poor postharvest handling and packaging, inadequate agricultural- extension 'services,; tariffs and tariff escalation, operational inefficiency, land tenure system; 'ageing farms and farmers, pest attack: and disease incidence, absence of political and economic will and Subsidies not getting to the real, farmers among others, and thereby called for immediate action to reverse the unfortunate trend.  

President Muahammadu Buhari however expressed regret over the setback in the cocoa sector over the years, saying his administration would work to re-position it along other non-oil commodities and promising that the summit was designed to be part of his administration’s Agricultural Commodity Revolution with cocoa as one of the main drivers to diversify through accelerated production and marketing drive. 

President Buhari who was represented by the agric minister, Chief Audu Ogbeh said it was time for the cocoa industry to open up the Nigerian economy to local and foreign investors while encouraging strategic partnerships necessary for resuscitation of the cocoa sub-sector of our economy after suffering neglect as a result of over reliance on crude oil, which led to decline in the country’s annual production from 420 metric tons in the 60s to 192,000 in 2015. The president noted that the position of the country had dropped from being the 4^th global cocoa producing country to the 7^th.

He said that the summit was initiated to reposition the cocoa sub-sector to regain its lost glory and bring to the fore the strategic importance of cocoa to our national economy in line with the economic diversification policy of this Administration.  

He stressed that the administration believes in the central role of the organized private sectors as the engine of growth of the economy and will therefore work towards strengthening the productive sectors of the economy, developing an outward looking export promotion strategy and ensure a steady progression in the development of the agriculture sector of the economy.

He urged the stakeholders present at the event to join hands with the Federal Government to improve the production and export base of our economy by increasing production, processing, packaging and marketing of our non-oil export commodities adding that stakeholders should support and key into government policy of promotion of non-oil export as an alternative source of revenue as he assured that the FG is committed to restoring the agricultural and industrial sector to its prime position before the discovery of crude oil.

Already, Governor Ishaku who was represented by the state’s commissioner for commerce and industry, Alhaji Illyasu Ajibu said the task of setting up the necessary mechanism had been given to the deputy governor of the state with technical support coming from the state’s ministries of commerce and industry and agriculture pointed the government is very passionate in the development of the industry for economic earnings in the state.  

As Akoroda gave the charge, the president of Federation of Agric Commodities Associations of Nigeria, Dr Victor Iyama who felt strong against old marketing board being of its role in creating poverty for the farmers why the officials are getting fatter, also nodded in agreement and promised that something would be done in that direction, soonest.

 It will be recalled that from independence until 1985 or thereabout, the Cocoa Board (constituted by government) held sway in the industry. But due to series of complaints by farmers of ineptitude and fraud by the board, and following the introduction of the Structural Adjustment Programme (SAP) by the Babangida Administration, the board was dissolved. What followed was a period of bliss for cocoa farmers and exporters because the naira had been devalued and the large volume of naira flowing in encouraged all comers to partake in the ensuing business. However, the bubble soon burst as the rush encouraged people to try all sorts of tricks resulting in the rejection of the commodity originating from Nigeria.

During the summit, it became apparent that what Cote d’Ivoire did right was to liberalize and still retain a central body to oversee cocoa affairs in terms of regulation, development, price control, etc., while Nigeria, in the SAP years, followed the recommendations of the economists to the letter by liberalizing without regulating.

The first paper at the summit was presented by the president of World Cocoa Producers Organization, Mr. Toussaint N’Guessan. In the paper titled Cocoa supply and demand: prospects and challenges he canvassed the adoption of crop rotation and integrated agriculture for cocoa farmers arguing that this system would see to the challenge of lack of income while waiting for cocoa gestation period to be over as well as ensure organic practices in cocoa farming.

While commenting on the paper, Mr. Sona Ebai noted that a value chain is as strong as its weakest link adding that every link in the system should be strengthened enough to make the system self-sustaining  arguing that “you don’t borrow to sustain subsidies.”He also called for strong commodity associations saying that it makes a difference.

 

The president, Cocoa Association of Nigeria and vice president World Cocoa Producers Organization, Mr. Sayina Riman while commenting on the challenges listed policy somersault was one huge problem; the challenges of data as the sources of the data are unreliable; which makes it difficult to know who the real farmers are; the farmers’ deficiency in requisite skills and the problem of finances which he captured thus: Cocoa has a gestation period of three years whereas bank loans are of short period of two years. He also noted that although research is key to higher utilization and profitability in cocoa, yet without funding, there is no research. The absence of extension services is another issue, adding “you can’t look up to the research institute or public officials for solutions to your problems.”

Managing Director, Tuton Nigeria Limited, Mr. Vivian Onokwai was of the opinion that if Nigeria was to exit the group of non-performers, she had to encourage farmers by making farming lucrative; providing access to farms and improving the process of data collection and put in place facilities for cocoa drying, for example.

A former Assistant Director/ Cocoa Desk Officer, Federal Ministry of Agriculture and Rural Development (FMARD), Evangelist Isaiah Abalaka advised researchers to, in the absence of extension services,  strategically locate their field trials so that farmers would observe and gain from such trials; youths should be mobilize into cocoa farming in addition  to encouraging more farmers into doing same. 

Prof Akoroda in his paper titled Sustainable cocoa production said of the 50 cocoa producing countries, African countries produce 70 percent and that of the quantity, Cote d’Ivoire and Ghana alone produce 50 percent while Nigeria and other African countries produce 20 percent. While comparing the contribution of cocoa in Cote d’Ivoire, Ghana, Cameroon and Nigeria under topics like Cocoa export as a % of total export earnings, while it was 32 in Cote d’Ivoire; 31 in Ghana and10.2 in Cameroon, it was an abysmal 0.7 in Nigeria. Under % of imports covered by cocoa exports earnings, whereas it was 40.2, 21.4, and 7.5 respectively in those countries, it was a poor 1.27 in Nigeria. Also, under Cocoa export earning as a % of GDP while the figures were 13.3, 8.2 and 0.12 respectively for those countries, it was only 0.12 for Nigeria; also under the sub heading, earnings from  cocoa as % of farmers total income, while Cote d’Ivoire and Ghana posted 80 and 90 respectively, Nigeria posted 60.

He said Nigeria must wake up and do more towards the revival of the crop as only 15% of the estimated nine million trees are producing, because “if you water cocoa, cocoa will water your pocket.” 

He counselled that Nigeria should make jute bags available for better packaging of the commodity, noting that under his watch at CRIN, eight new disease resistant varieties of the crop were released and that the institute uses solar converters to dry the beans and that it was successful.

The president of Cocoa Processors Association of Nigeria(COPAN) and managing director of Cocoa Products (Ile Oluji) Limited, Mr. Akin Olusuyi in a paper titled Cocoa processing in Nigeria: Challenges and opportunities said although Africa led the pack in cocoa production, when it came to processing, it only accounted for 20% of the global processing market. Europe claims the lion share of the processing market with 40% with The Netherlands leading the world in processing with 13% global grindings. Of the remaining 60% processing market it is shared evenly between Africa, Asia and the Americas. In Africa, only Cote d’Ivoire was visible in the processing map with Nigeria being nowhere to be found.

Why has Cote d’Ivoire succeeded in its cocoa economy? Olusuyi provided an insight: (1) Establishment of stabilization fund to support cocoa production as early as 1978; (2) Well-equipped and guarded warehouses to provide storage for farmers and confidence for buyers for future sales; (3) Liberalized cocoa market aided by government policy; (4) Loan scheme to assist cocoa farmers; (5) Centralised body to ensure the management, regulation, development and price controls of cocoa.

He said that presently Nigeria has 18 processing plants while only ten out of the lot engage in some processing whereas only five of the ten, namely Stanmark Cocoa Processing Company Limited, Ondo Town; Cocoa Products (Ile Oluji) Limited, Ile Oluji; Coop Cocoa Products/Olam Nigeria, Akure;Alpha Cocoa Processing Company Limited, Akure and Plantation Industries Limited, Akure, all located in Ondo state, are really alive and producing at 30 % installed capacity. All the five process 60,000 tons out of the over 200,000 tons produced nationally.

On the challenges faced by the processors,Olusuyi listed the scarcity of feedstock (raw cocoa) for feeding the processing factories as there is competition **between the exporters of the raw beans and the processors for the little produced in the country, and that the exporters usually have the upper hand because they have the means; lack of capital; unreliable infrastructure; undeveloped local market for cocoa products, i.e, people regard chocolate as luxury food; 

Lack of policy guideline for the development of cocoa value chain; non-signing of European Union /EPA agreement and lack of political will.

While canvassing for government support, he said the total value of global export of cocoa is $10 billion whereas the total value of cocoa derived products is over $200 billion, and then called for strategic actions to correct the inanities and strengthen the system; building and strengthening of the existing institutions; policy framework; high tariff on imported cocoa products; availability of finance; incentives to encourage value addition; integration and collaboration all players in the value chain; development of blueprint for cocoa industrialization; and technical and technological support through research and development, education and information dissemination.

The chief executive officer of Titan Project Nigeria Limited, Mr. Chris Agara pleaded that nobody should be discouraged from processing, adding that his company’s 30, 000 ton capacity factory construction was at an advanced stage and that it should be ready for commissioning in the next six months.

He explained that three companies from Europe would be processing cocoa for local consumption and export, in the facility. And that the quality control would meet both local and international standards.

The president of International Cocoa Organization (ICCO) Dr Jean-Marc Anga, while delivering his paper titled: Global market for cocoa products got angry and uttered: “Nigeria, great country with great potential but not helping itself, not helping Africa.”He suggested that Nigeria could do without the export market noting that what she needed to do was to rearrange the system such that she could produce more and also consume 50 % of its produce. The way things are right now, with just 0.4 consumption rate Nigeria should be afraid and the fear gingers it to take action! He said Cote d’Ivoire became what it is over a period of 20 years. He threw a challenge of Nigeria coming to the 2^nd position within the next 3-5 years.

In order to solve the problems of declining cocoa prices, Anga  canvassed for  putting in place of National Cocoa Plan;  increased cocoa processing in origin countries; increased consumption in origin and emerging countries; and diversification or integrated farming.

However, the stakeholders in a communiqué issued and read by Director of Federal Ministry of Trade and Investment, Mrs. Modupe Opeewe noted various challenges that hinder the output of cocoa produced which: include 'inconsistency in government policies, inadequate' funding of Research and Development, absence of structured and viable cocoa stakeholder groups, lack of synergy between Research institutions and Farmers, problem of identifying the right sector players, lack of synergy among, the key regulatory and quality control agencies, stringent measures for accessing finance- for players in the technical' industrial, infrastructure deficit, low and inadequate Capacity and technical' know-how of the farmers, lack of adequate incentives, lack Of awareness, of the provision of Sanitary and Phytosanitary (SP) Measures. Also lack of long term loan with high interest rates for the short ones; poor postharvest handling and packaging, inadequate agricultural- extension services; tariffs and tariff escalation, operational inefficiency, land tenure system; ageing farms and farmers, pest attack and disease incidence, absence of political and economic will and subsidies not getting to the real, farmers among others.

Consequent upon this, the following recommendations were made: 

 

·          Establish a Central Coordination unit for, cocoa development; 

·         Make cocoa business lucrative by 'providing., infrastructure (power, rural road network, water and linkage to inputs source, etc); 

·         Encourage innovation and develop appropriate adaptable technology; Provide high yield seedlings; 

·         Strengthen incentives and subsidies to stakeholders in' the cocoa industry;

·         Create synergy and partnerships between- the, R&D.. Institutions, support institutions, policy makers and 'the organized. Private 'sector players; 

·         Produce a viable National Cocoa Development Plan based on sound, knowledge of local cocoa resources;

·         Ensure revitalization of moribund cocoa' processing factories;

·         Encourage domestic consumption of cocoa and cocoa products re- introducing cocoa drinks in the school, feeding' programmes of the ,' government; 

·         Declare cocoa, as a national drink; 

·         Implement the cocoa development action planning diversification policy of the government of Nigeria; 

·         Strengthen and fund Research and Development 

·         Establish Cocoa development fund;

·         Organize structured and viable cocoa stakeholder 'groups for, easy access to finance.