THE STUDY OF THE DETERMINANT OF PRODUCTION OF COCOA IN NIGERIA
CHAPTER 1
INTRODUCTION
1.1 BACKGROUND TO STUDY
Cocoa is a bean that is in high demand all over the world especially by developed countries. Cocoa has several uses and benefits to an economy. Africa is the largest producer of cocoa to the international market, which are normally in Europe and America. Ivory Coast, Ghana and Nigeria share the largest contribution to the world market and with Ivory Coast by far the highest producer producing up to 39% of world output (UNCTAD, 2004). While the contribution of Nigeria and Ghana is 19% and 6% respectively (UNCTAD, 2004). But our focus is on Nigeria. World cocoa output was estimated to have increased by 50% in the early period of independence of the countries output (between 1958 and 1966) with practically the whole increase coming from West Africa (Ivory coast, Ghana & Nigeria mainly). Explaining the basis of this increase, the FAO (1966) had this to say.
The remarkable upsurge in west African production -in which Nigeria participated fully- can only be explained by the coming into bearing of your trees, an increasing proportion of which were of Amazon and selected high yielding Amelonado varieties, and the effects of spraying against diseases and pests.
Thus, research findings can be said to have made a significant impact on the Nigerian cocoa industry. This view was given credence and quantitative support by some empirical studies which found that cocoa research in Nigeria has generated an internal rate of return as high as 42 percent (Abidogun, 1982). Against this background of impressive payoff to investment in cocoa research, it may be pertinent to access the distributional impact of benefit generated in the process. In particular, an export oriented industry like the cocoa industry, the relative size of consumer surplus is of interest to policy makers on account of its implication for research financing, allocate efficiency and international equity.
Nigeria is an important player in the cocoa sector and as such, the Nigeria output has effects on the international aggregate output and price level. Cocoa production in Nigeria is done in the South West of the country especially in Ondo state and some are seen in the South -South zone especially in Akwa-Ibom state.
In the early part before and after the independence in Nigeria, Nigeria was solely dependent on agricultural output such as cocoa as means of foreign exchange and income for the government and citizenry. The bulk of the country was run with revenues got from agricultural produce. The Southwestern part of the country was reliant on the production and sales of Cocoa. So also were the Northern part of the country that gets its output from monkey nut (also know as groundnut). The southern parts were not left out because they had vast amount of land at the time providing them with palm kernel. Though, this region also had additional income from coal from Enugu. But deductively, it has been shown that the South West which founded were only cocoa was richer that the Eastern part that had both palm kernel and coal. This is an indication of the commercial viability and economic importance of cocoa in the community of other cash crop. It is widely acknowledged that Nigeria has a wide range of natural resources which agriculture can be said to be included. This enormous base (e.g. cocoa) if well managed, could be a support to the manufacturing sector (industrialization) by providing supplies of raw material for the raw material needs of the industrial sector as well as providing gainful employment for the teeming population. One of the major development expectations of the cocoa industry in Nigeria is the supply of raw materials for the emerging agro-industrial processing and manufacturing sector. This expectation, which is in consonance with economic theory, which assumes that with the growth in the industrial sector, the excess labour, would be absorbed in to the modern sector.
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