Description

Until the late 1970’s when hydrocarbon was discovered in commercial quantity in Oloibiri, present day Bayelsa state, Agriculture remained the mainstay of the economy contributing over ninety percent (90%) of the Gross Domestic Product (GDP) of the country as against the less than forty percent (40%) it now contributes with crop production accounting for an estimated eighty-five percent (85%), livestock ten percent (10%) and the balance made up by fisheries and forestry.

Any nation that requires economic development must look inwards to identify areas where it has comparative advantage over other nations and seek to develop the identified areas.

Apart from hydrocarbon, Nigeria has comparative in the Agricultural sector where a variety of products are produced due to the favorable climatic condition, good soil condition and the fact that over seventy percent (70%) of the entire land mass of the country is arable.

Nigeria has comparative advantage in the production cocoa and cashew in Africa over her counterparts due to the large arable land available for production and the conducive climatic condition.

Cocoa (Theobroma cacao L.) is a native of Amazon region of South America. The bulk of it is produced in the tropical areas of the African continent. There are over twenty (20) species in the genus but the cocoa tree Theobroma cacao is the only one cultivated widely.

Cocoa is the second major non-oil foreign exchange earner in Nigeria after leather. It is produced in fourteen (14) states of the federation namely Ondo, Cross River, Oyo, Osun, Ekiti, Ogun, Edo, Kogi, Akwa Ibom, Delta, Abia, Kwara, Ebonyi and Rivers.

The top growing states Ondo, Ogun, Osun, Oyo and Ekiti account for about sixty percent (60%) of the cocoa production and make up at least thirty percent (30%) of the total cocoa export in Nigeria. Ondo is rated the largest cocoa producing state with an output capacity of about seventy-seven thousand (77,000) tons per annum.

Cocoa was a major agricultural export crop and a top foreign exchange earner in the 1950s and 60s. Prior to the discovery of crude oil in commercial quantities in the 1970s, Nigeria was the world’s second largest producer of cocoa.
Average cocoa production declined from four hundred and twenty thousand (420,000) tons in the ‘60s to one hundred and seventy thousand (170,000) tons in 1999.

Production climbed to three hundred and eighty-nine thousand, two hundred and seventy two (389,272) tons between 2000 and 2010, but fell back to one hundred and ninety-two thousand (192,000) tons in 2015 and 2016. After dropping to fourth place, Nigeria is now the sixth largest producer.

In the past, the Nigerian cocoa market was a monopsony a situation where one buyer, through a marketing board, controlled a large proportion of the market.

The 1980’s structural adjustment policies (SAPs) imposed by the International Monetary Fund (IMF) and the World Bank recommended that the government dissolve the ineffective marketing board in order to liberalize cocoa marketing and trade, and allow improved cocoa output and pricing.

Against the backdrop of declining production and collapse of the commodity board members due to market liberalization, the National Cocoa Development Committee was established in December 1999 by the Obasanjo administration.

Its objective was to develop a sustainable blueprint for reviving the waning cocoa sector. Other objectives included improving cocoa quality and increasing production from one hundred and seventy thousand (170,000) tons to three hundred and twenty thousand (320,000) tons per annum in the short term and in the long term to six hundred thousand (600,000) tons per annum. However, this ambitious plan for cocoa rehabilitation is yet to be realized.

In Nigeria, about eighty percent (80%) of cocoa produced is exported as cocoa beans while the other twenty percent (20%) is processed into powder, butter, cake and liquor before being exported.

Cashew (Anacardiumoccidentale) is an important industrial and export crop whose potential is yet to be fully exploited in Nigeria. Cashew has for many years been used for food and income generation.

The trees are usually grown for their kernels which when roasted have a very pleasant taste. Cashew is the common name for a tropical and subtropical evergreen tree, Anacardiumoccidentale L., in the flowering plant family Anacardiaceae.

It is also the name for the commercially important kidney-shaped, nut like seed of this plant, which is edible when roasted or cooked (New World Encyclopaedia, 2008). The plant is a native of Tropical Central and South America, notably North Eastern Brazil, from where the Portuguese explorers introduced it into Nigeria in the 15th/16th century.

Nigeria, having a total area of one hundred thousand (100,000) hectare of cashew plantations and an average annual production of eighty-five thousand (85,000) metric tons per annum contributes almost sixteen percent (16%) of the total production of the agro-ecological zone.

Its production is about five percent (5%) of the global situation. During the last three (3) years, Nigeria has been one of the leading suppliers of raw cashew nuts exported to India. Nearly eighteen thousand (18,000) to twenty-three thousand (23,000) metric tons of raw nuts per annum have been exported earning about N23 billion annually.

Raw nuts which are much in demand in industrialized countries are processed into kernels that constitute a valuable export product for confectionery. They are used as an ingredient for making fruit paste, candy fruit, canned fruit, cashew apple, resins, jams and jellies, chutney, fruit juice, alcohol and vinegar. Cashew kernels rank third after almonds and hazelnuts in the international trade of tree nuts.

The history of cashew in Nigeria dated back to 15th century. Then, it was mainly used in afforestation schemes for the control of erosion in the former Eastern Nigeria.

However, the commercial cashew plantations started in Nigeria in the early 1950s with the establishment of first commercial plantations at Oghe, Oji and Mbala by the defunct Eastern Nigeria Development Corporation (ENDC) and Iwo, Eruwa and Upper Ogun by the defunct Western Nigeria Development Corporation (WNDC).

From these locations, the planting of the crop spread to other parts of Nigeria particularly the Central and Northern States of Nigeria. Research on cashew production and its uses started at the Cocoa Research Institute of Nigeria (CRIN), Ibadan in 1971.

The introduction of Brazilian cashew biotype with improved and desirable nut and kernel quality characteristics by CRIN has further increased the crops spread and popularity in Nigeria.

The commodity of commercial importance is the nut, which contains forty-seven percent (47%) fat, twenty-one percent (21%) protein and twenty-two percent (22%) carbohydrate.

This report seeks to examine the financial viability or otherwise of packaging and exporting raw cashew nuts (Nut Count – 170-180) and dry cocoa beans (Bean Count -300) from Nigeria.