Thrice, the association had written to the State Government but only a firm response that it would not back down from the increase was received. Apparently dissatisfied with the response, members have been directed not to pay the new levies while most have decided to move to neigbouring Cocoa producing states to ply their trade.
FOR members of the Cocoa Association of Nigeria in Ogun State, it is time for a showdown with the Ogun State Government over the latter’s unilateral and arbitrary increase in the fees and levies to be paid by the produce merchants.
Thrice, the association had written to the State Government but only a firm response that it would not back down from the increase was received.
Apparently dissatisfied with the response, members have been directed not to pay the new levies while most have decided to move to neigbouring cocoa producing states to ply their trade.
Trouble started when the State Government, through the Department of Produce Services, in the Ministry of Agriculture on September 2, 2010 issued a circular reviewing the Grading and allied Levies for cocoa in the state.
Levies for cocoa in Ogun
In the Circular signed by Director of Produce, O O Kushimo; the reviewed levies involved Inspection fee, N1,300; Grading fee, N2,000; Evacuation fee, N200; Commodity Development Fund, N500; and Produce Trust Fund, N1,000; all totalling N5,000.
The fees which increased from N3,000 to N5,000 was, according to Kushimo, to take effect on October 1,2010. But in a swift reaction the National Assistant Secretary, Alhaji Najeem Olomide called for a stay in the review followed by another after there was no response until the 8th of October when another one was written in the same regard.
Olomide in his letter said: “We have sent several letters to your office that all the cocoa producing states are yet to implement this new tariff, as we are always saying that Ogun State is not the only State producing cocoa. We don’t want any action that can cause problem between the produce buyers and the produce department.
“We are now demanding for your urgent reply and action from your office to rescue the cocoa buyers that could not practice their business for now in the instance of your information to us”.
Government, however, in its last response in a letter signed by SA Adenopo for Director of Produce Services declared that “the review, which was long due, was at the instance of the Governments of the 14 Cocoa Producing States of the Federation, hence it is a national issue binding on all the producing states”.
With these final words from Government, the Association directed all its members not to pay the new levies as the Government had not carried the group along.
Rising from their meeting in Abeokuta on Thursday, a communique issued said apart from not being duly carried along in the formulation of the policy, the produce department collecting the levies has not been monitoring the quality of cocoa at the farm gate.
Moreover members of the association said that they have been denied Commodity Development Fund meant to provide relief for the farmers during cocoa growing season and that there was no government input and provision of necessary chemicals to the farmers.
They added that cocoa farmers who were victims of the recent flood disaster recorded loses valued at over N500 million.
Speaking with Vanguard in Abeokuta, the National Assistant Secretary Alhaji Najeem Adenopo said: “They first changed the fees and levies under the military in 1999 from N1,000 to N3,000 and it was forced on us.
But if government would increase the cost of doing business it should call stakeholders and explain. If it was not anti people; we should have been called for a meeting.
“Other Cocoa Producing States have not increased, they have maintained the levies. Even Osun State which produces more cocoa that Ogun has not increased the levies.
In Kwara, it is still N2,500. Why Ogun? Government insisted that it was a decision of the Cocoa Producing States and we investigated, it is not true. Even then, the Constitution does not recognize Cocoa Producing States. Democracy is about consultation. We are not fighting but we are asking that they do something urgent as produce merchants are already moving from the state.
“The levies are meant to kill the Sector as they are discouraging cocoa dealer fro neigbouring state to come and trade in Ogun. The excessive regime of levies is anti_people and capable of ruining the Cocoa business in the state.
“We have met and decided that anybody operating in Ogun State should not pay the levies and we have decided to let the Governor, Otunba Gbenga Daniel, know about all these things because we suspect that some of the officials may be behind the intransigence.”
There is no doubt that cocoa is currently blazing a trail in Nigeria’s non_oil sector.
Now regarded as one of the market’s best performing commodities, it has defied the current global meltdown that is sending shivers down the spines of economic policy makers. The price of the commodity that is also known as the ‘Tree of Life’, in fact, hit a 23_year high last December.
Coming at a time when the price of crude oil is sliding in the international market, the average price of cocoa keeps appreciating, with London and New York March deliveries standing at $2,581.6 per tonnes as at early January. Expectations are high that the price may peak at $3,000.
This is surely a good development for West and Central African countries which accounts for 70 per cent of the world’s cocoa output. From Nigeria through Ghana, and down to Cote’d’Ivoire and Gabon, cocoa is currently enjoying a boom.
In South West Nigeria, which is regarded as the cocoa belt of the country, accounting for 70 per cent of Nigeria’s annual production of 242,000 metric tonnes, cocoa merchants are reaping a bumper harvest, with the price going as high as $2,148 per tonne.
Also in Nigeria, the free fall of the naira against the dollar is also giving cocoa a boost as the commodity is valued in dollar at the international market.
Market watchers, in fact, believe that the price may go up further as the shortfall in Cote d’Ivoire’s output of 396,000 metric tonnes from the previous season’s 721,413 tonnes is bound to affect supply.
The country alone accounts for between 35 and 40 per cent of the world output. Bush fires in Ghana, low rainfall in the West African region and the unsustainable methods of production had resulted in the low production recorded despite increasing demand.
The total area under cultivation for the crop worldwide in 2007, is said to be 7,415,081 hectares with production standing at 4,043,784 metric tonnes.
It is important to note that the World Commission on Environment and Development, WCED, has defined sustainable development as “development that meets the needs of the present without compromising the needs of future generations to meet their own needs.”
Experts, therefore, say that cocoa production can only be economically sustainable “when it is at all times sufficiently attractive for small holder farmers to properly maintain their farms, rejuvenate their farms as required and to buy the necessary production tools and inputs to achieve optimal yields.”
Business not destination
Maintaining that cocoa farming “should be seen as a business and not a destination,” the experts maintain that with farm size in most West and Central African cocoa-producing countries averaging one-and-half to two hectares, the farm family cannot earn enough to get out of poverty. What is, therefore, needed, they say, is “a system that allows cocoa to play a strategic role in improving the livelihood of cocoa farmers, their families, communities and the country concerned.”
Stakeholders, it must be noted, had also expressed concerns at the gloom starring the sector in the face, despite the apparent potential that could be derived.
The aims, among others, were to come up with a vision for cocoa in West and Central Africa in the next 30 years; to develop the logic to get there; and to secure commitment to a partnership for the future of cocoa in the region.
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