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Nigeria targeting fair share of world cocoa market – Aikpokpodion

By BusinessNews Staff on January 20, 2014

Team Leader of Cocoa Value Chain Development of the Federal Ministry of Agriculture and Rural Development, Dr. Peter Aikpokpodion, is optimistic that Nigeria is on its way to reclaiming the economic prowess of cocoa, which sustained its economy decades ago. In this interview with ONCHE ODEH, he explains how cocoa productivity is being raised in Nigeria to enable the country benefit from the global market, revealing also, among others, plans to establish a Cocoa Commodity Corporation in the country this year. Excerpts…

According to available records, till 2011, Nigeria’s average cocoa production hovered around 250,000 metric tonnes per annum. What is the current situation?

As at 2011, Dr. Akinwumi Adesina (Minister of Agriculture) took charge of the ministry, and set out clear goals for the cocoa sub-sector in line with the Agricultural Transformation Agenda, which we call Cocoa Transformation Agenda. The goal set by the Minister then was for Nigeria to increase cocoa production from 250,000 to 500,000 metric tonnes by 2015. According to the record provided by the Federal Produce Inspection Service, which is domiciled with the Federal Ministry of Trade and Investment, in 2012, Nigeria produced 300,000 metric tonnes. As of July 2013, the production figure was put at 350,000 metric tonnes. So, you can see how gradually we have improved consistently from 250,000 metric tonnes in 2011 to 350,000 metric tonnes in 2013, which means 100,000 metric tonnes have been added.

How did this happen?

As you know, some of the developments did not happen overnight. It only shows the impact of the action plan for the cocoa sector in terms of government policies on the aspect of support programmes, which is the Cocoa Growth Enhancement Scheme (GES), which is different from the regular GES. Not only that, there is now a very strong awareness among farmers that, indeed, farming is business and people see it in that light and set to make investment in cocoa farming and its main value chains. The market is there and farmers have been motivated to go into this. So, there is greater investment and production.

How is the cocoa GES different?

The GES programme is tailored to meet the critical needs of the cocoa farmer; the critical inputs that a cocoa farmer needs, such as agro-chemicals against black pod, insects that attack and also fertiliser to make sure the cocoa trees produce well, though farmers before now had not been using fertilser, because from the study we carried out, not many Nigerian farmers used fertiliser. I can tell you, last year, we succeeded for the first time to introduce a specifically formulated fertiliser for cocoa. This is the cocoa fertiliser which was brought to the country and it is part of the efforts of the transformation agenda to make Nigeria farmers use fertilser. So, you can see the need of cocoa farmers: agro-chemicals, fertiliser and improved seeds/seedlings. These are not just what they used to plant, which were unselected materials. Now there is a deliberate attempt to provide our farmers highly superior cocoa varieties. So, unlike the general GES which provides seeds and fertilser to farmers, cocoa farmers get agro-chemicals, insecticides, fungicides and they get cocoa fertiliser as well as hybrid pods.

Records show that Nigeria is producing far less than what Ghana and Cote d’Ivoire are producing of cocoa. How can Nigeria meet up with these countries and possibly overtake them?

That is a fact that Nigeria production is now is 350,000 tonnes. We are behind what Ghana produces. Ghana produces between 850,000 tonnes and one million now, and Cote d’Ivoire produces between 1.2 million and 1.4 million tonnes. Definitely, that is clear and Nigeria lags behind them. The way we are approaching this is not about competing, but it’s about taking a greater share of the world cocoa market. Now, I can tell you, the cocoa market is such that cocoa beans account just for about 10 per cent of the whole market value. Adding value to cocoa raises the market share you get and, so, in Nigeria, some concept of the philosophy of the minister is to see how to move our farmers from the farm gate to the factory gate. It is not just producing cocoa beans, though that is important. We need to increase our production, but he has seen it from a business perspective. What percentage of the global market value or per share of that do we have? And so our effort is not just concentrating on production. It is along the whole value chain in terms of marketing, processing and adding value right here. There are a lot of efforts in that regard. So, the strategy we are adopting in Nigeria is not about competing with some countries. It is not about how to close the gap and how to meet them. We must adopt a different strategy that gives our farmers and value chain operators greater share of the market value of the global market. So, in terms of production, which is of course one of those elements, we are growing this and I told you, it moved from 250,000 to 350,000 metric tonnes from 2011 to 2013. That was 100,000 tonnes in two years.

Now, the other aspect is the processing. Grinding cocoa locally, processing it into cocoa liquor, cocoa butter and cocoa cake increases the market value more than just the cocoa beans alone. In fact, we are facilitating state governments and investors to even take us to the end of the chain in terms of making chocolates. The strategy is business, increasing the value of the cocoa we get from the cocoa value chain and then, in that wise, we should focus not just on production but also on processing and marketing, to ensure that our farmers and value chain operators have better market share of the global value of cocoa.

What awareness are you creating to encourage local cocoa utilisation and consumption as a way of encouraging local investors?

I will like to corroborate your point that, indeed, local consumption till now is still low. But I can tell you that it is on the increase. We will not forget to appreciate the efforts of the National Cocoa Development Committee, which was set up during the time of former President Olusegun Obasanjo. One major aspect of the work of the committee was to encourage local consumption of cocoa and this culminated in the production of a booklet. I can tell you that the efforts have really helped to increase and create some awareness of the health and nutritional benefits of cocoa. Yes, it is still low; but I can tell you that some progress has been made. From zero to 0.5 per cent is something. You know what I mean. However, a lot of work still needs to be done. But I can tell you one major effort in this regard is partnership with the state governments to encourage them to incorporate cocoa drinks into school feeding programmes, into hospitals and all that.

But, you see, beyond the paper work, there is the need for serious investment into this. I can tell you we appreciate what some states’ governments are doing, like Osun State government in terms of school feeding scheme. Cocoa is so rich with over 250 different elements good for the mental and physical health and even your heart. That Osun government can add it to what they are doing currently in their school feeding programme to encourage the consumption of cocoa is commendable. Last year, we got the commitment of Ondo State government to really encourage consumption of cocoa beans and cocoa products within the state, and the government is making conscious efforts in this regard. I am sure this will begin to unfold this year. There are efforts to really present cocoa products in a way that fits into the way of our people. You know culture plays a role in what people eat and your eating habit. I can tell you that, in Brazil, there was a conscious effort over a period of 10 years or so to encourage local consumption of their cocoa, to the extent that today, Brazil imports at least 67,000 metric tonnes of cocoa annually to augment what they have in order to meet consumption demand of Brazilians. This is one area that the government and the private sector must really work on. Getting local consumption increased is really critical.

You developed the newly-introduced high-yielding and early-fruiting cocoa varieties. How have those varieties translated into increased productivity and how far has it helped the ATA in realising its action plan on cocoa?

What we are doing now in ATA is laying a very solid foundation for various segments of the economy in terms of the commodities. You know cocoa is a permanent crop that exists for 30 to 50 years or more. So, we have embarked on what we call recapitalisation of cocoa plantations. So, what we are doing now is to spread the new hybrids to farmers and farms. The new hybrids, instead of spending four, five years before fruiting, they produce fruits within the first 28 months of planting, or let’s say two years or two and a half years. Just recently, I was in Cross River State, and the current president of the Cocoa Association of Nigeria, Sayina Riman, took me to the cocoa farm which he got from me and said, “Sir, I can’t believe this. Everybody comes to see this.” He planted the cocoa in October 2011, now in September 2013, the thing was fruiting seriously. Indeed, a tree had 40 pods and there were so many on the field, and I said you see, this is what science can do.

What motivated you into developing these varieties and how have they helped the farmers?

When I got into the Cocoa Research Institute of Nigeria (CRIN) in the 1990s, my vision was to work and develop something. I had this opportunity when the United Nations Common Funds for Commodities sponsored a breeding programme in which Nigeria participated. Our team worked very hard and with our focus and the support we got consistently for 10 good years, we were able to develop these various varieties. Thanks to the Lord, at the end of the day, we were able to officially release eight hybrids. Let me tell you, this came in about 40 years after the last one was released. I also thank my team that worked to have come up with this and, I tell you, this is a game-changer. It is well acknowledged all over the world. We didn’t just do it locally; this was something that those who manufacture chocolates worked upon with us. They assessed the materials and loved them, not just because of the yield; the flavour is superlative, quite superior and well accepted in the global market.

The Federal Government said it had distributed thousands of these varieties to farmers in the South West. Did that contribute to the increase from 250,000 metric tonnes to 350,000?

I can tell you, no fewer than 12 states of Nigeria’s cocoa-producing states, in the South West, South East and North Central, as well as Taraba State, have got these cocoa varieties. So our people are motivated and we are also training them. As I am speaking with you, 10,800 farmers in 270 communities in seven cocoa-producing states are undergoing training on farm rehabilitation and maintenance, among others.

We are giving these varieties out free of charge. The minister’s strategy is to recapitalise our cocoa plantations, by taking the old unselected materials out, and replacing them with these new wonderful varieties, meaning we are actually going to change the whole plantation in the country. In 2012, we gave out 425,000 pods, and in 2013, we distributed more than 340,000 pods in the last two months. You will begin to see the impact of these new varieties in two, three years, as the first set we gave out was in 2012. So, late this year to 2015, you will begin to see the impact, because it is not like maize, pepper or yam. This is something that will take some time.

Are these efforts really yielding results?

There are many people going back to serious cocoa production. Let me be very frank with you; we are not able to meet the needs of people coming around now, but we have a goal to actually give 3.6 million hybrid pods, and we are on right now. People like Dangote are interested. We have had discussions and he was buying thousands of hectares to plant cocoa, and many graduates are also being encouraged. I have my own farm too, just to let you know the interest that young people now have, because, truly, there is serious money in cocoa.

What role has Nigeria played in boosting capacity of players in the cocoa sub-sector?

The Federal Ministry of Agriculture is doing a lot. For instance, in terms of capacity-building of farmers, the ministry has been working with the World Cocoa Foundation on called World Cocoa Programme. So, in this partnership, we have signed an agreement to build capacity of at least 70,000 cocoa farmers, who will train in Ondo State. The ministry has commenced the programme. The Federal Ministry of Agriculture has committed more than $100 million to this. Last year, that payment was used to train 800 farmers. What truly made the defunct cocoa board to work was because the farmers were in co-operatives. So, whatever support the government was channelling at that time went through the cooperatives. There was group marketing and they could do group bargaining and all that. So, what we are also doing as part of the agreement is strengthening these organisations, so there can be strong business entities which can go to the bank.

Now, the other aspect, which is really critical for us in capacity to score the value chain, is what we called the Cocoa Corporation of Nigeria. You would recall that an important goal of the transformation agenda is to establish institutions, provide governance frameworks for this commodity sector in the commodity value chain, like cocoa value chain. I am so glad to tell you that we have made real tremendous progress. We got all our value chain operators together; individual real cocoa farmers, representatives from the South West, South South, representatives of exporters of cocoa beans, making a 25-person college to formulate the modalities for the operations of the corporation. So, the exporters, both indigenous exporters and multinationals – foreign exporters – who have their companies in Nigeria, processors like Multi-Trex, were all represented. We got not only the players, we got non-governmental organisations (NGOs) represented. United States Agency for International Development (USAID) was part of that programme. The Cocoa Association of Nigeria, the Cocoa Farmers Association of Nigeria and the Cocoa Processors Association of Nigeria were represented. So, everybody sat together in the same room and the Minister told them: “Here you are; you are building your own house. So, develop the framework on which the corporation should work.” With this philosophy, the government is only going to enable it; it will be run by the private sector.

And when is the corporation going to be incorporated?

The master plan has been developed and it is to take off this year. They have the master plan and it is so wonderful. The beauty of it is that it was not just by some people outside. These same people here, the owners of the industry, developed the master plan for them by themselves.

[Daily Independent]

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