Nigeria is unlikely introduce a fixed farmgate price for cocoa to mirror its West African neighbours’ approach to the sector as its farmers receive a higher price and lack trust in the public sector, the president of its cocoa association told Reuters.
“I don’t think Nigeria would contemplate introducing a fixed price. Why? Because there’s still a low synergy between the public and private sector and a low level of trust of the public sector,” Sayina Riman said.
Ivory Coast and Ghana, the world’s top two growers, both have fixed cocoa prices which are currently below world prices.
Speaking on the sidelines of the World Cocoa Conference in Amsterdam, Riman said: “Most often the Nigerian price at the farmgate is higher than the international market price because of competition within the market.”
The International Cocoa Organization estimates Nigeria’s 2013/14 crop at 250,000 tonnes, making it the world’s fourth largest producer behind Ivory Coast, Ghana and Indonesia.
Nigeria’s cocoa production peaked at around 400,000 tonnes a year in the 1970s, but the government began to neglect the sector with the discovery of oil. The industry’s decline accelerated after it was deregulated in 1986, with the abolition of the cocoa board.
“One of the major factors (for the board being dissolved) was its inability to pay farmers who had supplied to the board, and two; farmers were already cutting down their trees for lack of being paid and for lack of this synergy and support that is critical for the industry from government,” Riman said.
“After the discovery of oil, government shifted its focus (away) from agriculture. Nigeria has the potential to do better than Ivory Coast and Ghana put together.”
In recent years oil and gas discoveries have opened up new opportunities in the energy sector for Ivory Coast and Ghana’s economies too.
“I’m sure they will have learned from the bitter lessons of Nigeria. Oil is not sustainable, it will go one day, but cocoa and other agricultural products are replenishable,” Riman said.