Facilitating Smallholder Farmers’ Market Access
In the OIC Member Countries
39
Yields are low because of the age of cocoa trees (60 percent of cocoa farms are reportedly
over 40 years old),74 the lack of labor, and the lack of improved R&D infrastructure. If
cocoa farmers could aggregate their produce through cooperatives, traders would find it
beneficial to engage with them, but farmer organizations are weak and poorly
coordinated. Smallholders require both technical and business training if they are to
manage cocoa farms as (modern) businesses, especially given the growing demand for
certification and traceability in the cocoa supply chain. It can be done; in 2011, SARO Agro-
Allied Ltd, a Nigerian cocoa exporter, partnered with a leading global cocoa processor,
ADM, to support about 2,000 Nigerian cocoa farmers to attain UTZ certification. 75 The rate
of certification is expanding as other major cocoa buyers increase their commitment to
and support for certification, and as favorable prices and good marketing opportunities
make certification attractive for farmers. Local cocoa processors are constrained by
insufficient working capital and by erratic power supplies (discussed later).
Cross-cutting issues impacting smallholders’ access to markets
Inefficiencies downstream in supply chains reduce the returns to smallholder farmers.
Low productivity at the farm level is exacerbated by post-harvest losses, which tend to be
higher in Nigeria than in many comparable countries—as much as 20–30 percent higher
for many perishable crops. Losses are high for several reasons, including the technical
inefficiency of much of the machinery used for agricultural processing (which contributes
to very low physical product transformation rates), the poor condition of many storage
facilities on and off of the farm (which contributes to high levels of physical losses and
reduces quality during storage), and widespread pilferage (which leads to further physical
losses).
GOVERNANCE AND INSTITUTIONS
shows changes in five key governance indicators for Nigeria between 2002 and
2012. These Worldwide Governance Indicators are based on data reflecting local
perceptions of various aspects of governance, gathered through surveys and other
assessments by survey institutes, think tanks, NGOs, international organizations, and
private firms.
74 Cadoni (2013).
75 USDA-FAS (2014).