How to start a profitable cocoa farming business with little capital(2019).

Do you know that cocoa farming business is one of the highly profitable agribusiness in Nigeria?

Do you know that ninety percent of the world’s cocoa is grown on small family farms by about 6 million farmers who earn their living from growing and selling cocoa beans.

The largest producing country of cocoa beans by volume is Côte d’Ivoire, which produces around 40% of global supply of cocoa beans.

Cocoa is a delicate crop, and farmers must protect trees from pests, wind, sun, and other diseases in order to make huge profits from it.

With proper nurturing, cocoa trees begin to yield pods at peak production levels by the fifth year, and they can continue at this level for 5-10 years.

Before the oil boom in Nigeria, there was cocoa, which we depend on as one of our major cash crops exports. Nigeria was then the biggest exporter of cocoa to other countries and ranked among the top exporters in the world.

According to the Cocoa Association of Nigeria (CAN), Nigeria ranks behind Cote D’Ivoire (1st), and Indonesia (2nd), Ghana (3rd). Together, Ghana, Nigeria, and Cote D’Ivoire supply more than two -thirds of the world’s cocoa beans.

                Cocoa (Theobroma cacao:Botanical name) is a small perennial tree crop that primarily comes from three tropical regions;, Southeast Asia, West Africa and Latin America. It usually ranges in height between four to eight meters.

 Cocoa being a tropical crop, it doesn’t do  well in the sun and is usually cultivated in the shade of other crops such as oil palm, banana or in the shades of fruit trees such as avocado, breadfruit, guava, mango, orange and coconut.

                  Reasons to start a cocoa farming business in Nigeria.

Cocoa farming business in Nigeria now presents one of the best investment opportunities to local and foreign investors in agribusiness, as cocoa remains one of the fastest selling agricultural products in the local and international market.

The profit on cocoa cannot be compared with other agriculture business like vegetable farming.

Nigeria has more land for cocoa than for rice farming since the local and  international demand for cocoa produce is high, it makes simple business sense to get into a business where demand exceeds supply, as it means that every product cultivated has a ready market or a buyer.

Another reason for cocoa farming in Nigeria is because it is a perennial crop that can survive for many years. Once planted and nurtured to maturity, farmers can harvest from a cocoa tree for many years.

While initial cultivation can be a hassle, once mature, cocoa trees could be a source of income for the farmer for 40 years or more.

HOW TO START A PROFITABLE COCOA FARMING BUSINESS IN NIGERIA

There are some things to consider when starting a cocoa farm which includes;

A large expanse of good land with the appropriate climate conditions and with a good steady rainfall supply in the area.

The farmer must invest in good quality, disease-resistant, and high-yielding cocoa beans for planting.

The farmer must take good care of the land by adding some fertilizer to the soil.

        The Best Climate Conditions For Cocoa Farming in Nigeria

Cocoa farming business can only be done under very specific climatic conditions which include 21-32oC temperature and 100-250 cm of rainfall, well distributed throughout the farming year.

Cocoa trees do not like too much sun , and its natural habitat is under the heavy rain forest canopy. That’s the reason why you rarely find a cocoa farm in the northern part of Nigeria and some in the western part of Nigeria.

Cocoa farming business would only thrive in states like Ondo, Ogun, Rivers, Cross River, Osun, Oyo, Ekiti, Imo, the western, Eastern and Southern states of Nigeria where there is abundant rain and less sun.

 Cocoa farm should be situated under the shade of crops such as oil palm, rubber, banana, mango, orange and coconut trees. This will ensure that the direct heat of the sun does not affects the cocoa trees.

During the harvesting period, the investor needs to purchase storage and drying space. Most cocoa farmers own warehouses to give the cocoa seeds the safekeeping needed, and this store needs to have enough space outdoors to spread, dry and package the seeds.

The seeds need to be dried in the sun to be usable and the drying period usually takes two weeks or more.

Varieties of Cocoa 

 Forasteros: This is a very robust and hardy breed of cocoa beans, a breed that accounts for more than eighty per cent of global cocoa cultivation. It is the most common breed cultivated in Nigeria and other part of the countries.

 Trinitario: This is a breed derived from crossing Criollos and Forasteros. It combines the robustness of the Forastero with the powerful aromatic cocoa taste of the Criollo.

 Criollos: It is considered the finest and most luxurious of cocoas, a breed that is more susceptible to pests and fungal diseases, and has smaller yields when compared to other cocoa breeds. It is also the most expensive breed in Nigeria.

COCOA BREEDING

There are different ways to breed a cocoa tree. The most commonly used method is seeding.

Seeding: Here, the cocoa tree is raised primarily from seeds. Beans are taken from pods within 15 to 20 days of harvest and are planted, adhering to the soil and climatic conditions required. Such seeds will usually germinate and produce good plants.

Cutting: Under this method, the farmer takes tree cuttings with an average of three and four leaves and one or two buds. The leaves are then cut in half and the cutting is placed in a pot under polythene until roots begin to grow. Once it starts to grow, it is transplanted to the farmland.

There are other methods like budding and marcotting.

COCOA PLANTING AND MATURITY

In Africa, cocoa is grown in forest regions, to make a plantation of cocoa tree, adequate shade is needed when the trees are still young.

The traditional method is to cut down all the trees and to burn everything. But It destroys all the organic matter in the weeds, the leaves and the branches, making the soil bare to the sun or rain, thereby making it less fertile.

Sometimes, farmer put banana trees or taros into the cocoa plantation, to give shade for the young cocoa trees.

If these are planted long enough before the cocoa trees, they give good protection to the cocoa plants. But if they are planted at the same time as the cocoa trees, they do not protect the young cocoa trees well enough and they take nutrients out of the soil.

Cocoa nursery is usually done between October and January, while field transplanting is done between April and June.

After cocoa seeds are planted, it usually takes between three and six years to yield the first crop. Cocoa Hybrid varieties however can yield crops within two and three years.

HARVESTING OF COCOA

Most countries have two periods of peak production per year: A main harvest, and a smaller harvest.

Cocoa farmers use long-handled steel tools to reach the pods and cut them without wounding the soft bark of the tree. Farmers collect the pods in baskets.

Post-harvest processing has the biggest impact on cocoa quality and, consequently, on cocoa taste, which includes:

Fermentation and drying. Farmer removes the beans from the pods, packs them into boxes or heaps them into piles, then covers them with mats or banana leaves for four to seven days.

The layer of pulp that naturally surrounds the beans heats up and ferments the beans, which enhances the cocoa flavor. The beans are then dried in the sun for one week or more if required.

SELLING,TRANSPORTING AND SHIPPING OF COCOA BEANS

The dried beans are packed into sacks, and the farmer sells his product to a buying station or to  beverages companies.

The buyer transports the sacks to an exporting company where the sacks are inspected, put into burlap, sisal, or plastic bags, and transported to the exporter’s warehouse, where the beans are stored until they’re shipped to a manufacturer.

PROFITABILITY OF COCOA FARMING BUSINESS

The international price and local price of cocoa beans is currently rising in response to high demand for cocoa products as the industry wakes up to a potential long-term shortfall in global supply.

Prone to disease, maintenance of cocoa farms is labor intensive and requires the use of expensive chemicals to keep black pod disease at bay.

Cultivation is a delicate process and trees are sensitive to changing weather conditions such as excessive rain or drought which negatively affects yield per hectare.

Ondo,Osun and Cross River states are reported to contribute approximately 68% of Nigeria’s yearly cocoa output which reached a high of 350,000 MT in 2014 when the Ministry of Trade and Industry also reported that Nigeria made $1.3 billion from cocoa export, according to Center for Public Policy Alternatives.

There is however poor price transmission between export markets and manufacturers.

BASIC STEPS IN SETTING UP A COCOA FARMING BUSINESS

Obtaining the land for cocoa cultivation  This is a cost that will vary widely around the world and within a country.

The land must be chosen  so as to provide the best soil and climate for the cocoa trees.

Establishing the plantation  The costs involved here includes clearing the land, planting shade and cocoa trees, weeding, fertilizer and pesticide applications and constructing the required infrastructure such as roads, irrigation ditches, nursery and processing facilities in the farm land.

Maintaining the plantation: The costs involves pruning, weeding, fertilizer and pesticide applications, harvesting and post-harvest processing.

The largest cost element in both establishing and maintaining a plantation is labor. Farm sizes vary and therefore labor costs vary, with many smallholders working the land themselves rather than hiring laborers.

So the costs for a large estate will be higher than for a smallholder.

A review of the case studies on labor usage for the maintenance of cocoa suggested that the mean labor usage, assuming a laborers works 240 days per year, in plantation conditions is 3.37 hectares per man per year.

Labor costs are followed by input costs such as fertilizers and pesticides; however, their use will depend on other factors such as the quality of the soil and the level of pests and diseases.

PRODUCTS THAT CAN BE MADE FROM COCOA BEANS

 Different type of products can be derived from cocoa.

The husks of cocoa pods and the pulp surrounding the beans and the cocoa bean shells can be used.

Here are some examples of these uses as listed by International Cocoa Organization;

Production of soft drinks and alcohol – In the preparation of soft drinks, fresh cocoa pulp juice (sweetings) is collected, sterilized and bottled.

For the production of alcoholic drinks, such as brandy, the fresh juice is boiled, cooled and fermented with yeast. After 4 days of fermentation the alcohol is distilled.

Animal feed from cocoa husk – As pelletized dry 100% cocoa pod husk, it can be used as an animal feed. The animal feed is produced by first slicing the fresh cocoa husks into small flakes and then partially drying the flakes, followed by mincing and pelleting and drying of the pellets.

Potash from cocoa pod husk –The cocoa pod husk ash is used mainly for soft soap manufacture. It may also be used as fertilizer for cocoa, vegetables, and food crops.

To prepare the ash, fresh husks are spread out in the open to dry for one to two weeks. The dried husks are then incinerated in an ashing kiln.

These products include cocoa butter, cocoa powder, cocoa liquor to mention a few.

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