A COMPARATIVE ANALYSIS OF THE COSTS OF PRODUCTION AND PRODUCER PRICES OF A TONNE OF COCOA FROM MATURED TREES IN NIGERIA BEFORE C5 AND DURING THE STRUCTURAL ADJUSTMENT PROGRAMME (SAP)

Abstract

It has been very difficult in the past to determine the costs of production of cocoa, because of the various factors involved. Early attempts made assumptions that are no longer tenable. On field estimations were carried out and results showed that pre-sap, the Nigerian Cocoa Farmers were making losses up to the 20th year if cocoa is considered as sole crop. But if intercrops are considered, losses occur till the 10th year. The gains from the period to the 30th year are also marginal. When costs of maintenance and hence production of a tonne of cocoa are compared pre and post-sap era. It was found that while costs of a production increased by 300%, producer prices increased by over 800%. The question is, are the gains of SAP on cocoa farmers going to be in the short-term alone and what are the effects of allowing open market prices to operate for the cocoa trade? Our conclusion is that SAP can only help the cocoa farmers in the short-run. In the long-run he has to face wen higher input costs and hence lower profits.