Nigeria is the fifth-largest exporter of cocoa beans in the world. Cocoa is the leading agricultural export and the North African country is currently the world’s fourth-largest producer of cocoa, after Ivory Coast, Indonesia, and Ghana, and the third-largest exporter. Yet, small-scale farmers still struggle to make a living as the world’s appetite for cocoa keeps surging.
“The fastest growing export markets for cocoa beans of Nigeria between 2019 and 2020 were Canada ($15.3M), Ghana ($10.4M), and Bulgaria ($9.06M),” says the Observatory of Economic Complexities (OEC). The top exporting countries for Nigerian cocoa beans are the Netherlands, Germany, Mayalasia, Indonesia and Russia.
Nigeria’s small-scale industry is teaming up with Ghana and Côte d’Ivoire to ensure they are able to maintain a decent living wage while working in the industry. Called the Living Income Differential (LID), this will ensure that farmers receive an extra $400 per tonne of premium quality exported cocoa.
However, to achieve this increase, small-scale farmers must adhere to the Good Agricultural Practises (GAP) protocols set for cocoa production. These stipulate that farmers may only make use of a recommended list of agro-chemicals, ensure that their farming practises are sustainable and mitigate climate change, have received relevant certification from the correct international bodies and avoid child labour practices and have traceable cocoa beans.
To forward this alignment, a joint meeting was hosted, including delegates from various cocoa stakeholders. These included representatives from the Cocoa Search Institute of Nigeria (CRIN), the Cocoa Farmers’ Association of Nigeria (CFAN), and the Ghana Cocoa Board (COCOBOD).
The LID system was first established by Cote d’Ivoire and Ghana in 2019, and at some stage will be transformed into the Cocoa Markets Organisation of Africa. The system has not yet been introduced to Nigeria, but the delegation met to discuss how viable its implementation would be in the country.
Currently, Nigeria requires a centralised regulatory system as trading and marketing are handled by individual private companies without centralised regulation.
Living incomes progress
A recent study by Fairtrade International has reflected that farmers who work with the organisation have an 85% higher income than those that do not, especially farmers in Cote d’Ivoire.
“This increase in household income is good news for these Fairtrade farmer households in challenging times. However, far too many farmer households are still not earning a living income,” explained Jon Walker, Fairtrade’s senior adviser on cocoa. “With continued pressure on prices, high national production and suppressed global demand, brands and retailers can step in and make further progress on living incomes through long-term contracts, stable prices and programmatic support focusing on farm efficiency and diversification. There is still much more to be done.”
The Impact Institute polled 384 farmers from 16 Fairtrade certified cocoa cooperatives for the comparison study, with the purpose of determining improvements and changes — such as household size, cocoa production, and crop diversification – that have occurred in the intervening years since 2016/17.
The latest Fairtrade research on Ivorian producers, which was published in 2018, resulted in a 20% increase in the Fairtrade Minimum Price and Premium for conventional cocoa beginning in October 2019. Fairtrade is the only certification scheme with a required minimum price, which works as a safety net for farmers when market prices fall while also allowing them to gain when prices rise.