Cocoa is an important agricultural export commodity not only because it provided about 20 per cent of the aggregate export earnings for Nigeria in the last decade but because it has generated considerable revenue for the government in terms of export duty, produce sales tax, and Marketing Board surpluses. In particular, the economy of Western Nigeria has been largely financed by the proceeds from the cocoa industry.

A look at the production statistics of the cocoa industry will reveal a declining trend in output since the 1964/65 crop season. The problem of declining yield is linked with the fact that about 40 per cent of the existing 1.2 million acres of cocoa are classified as marginally productive due to old age. The production problem is aggravated by the fact that most of the farmers whose cocoa trees have become moribund do not appreciate the need for replanting, and those who do indicate that they have not been encouraged by the prevailing producer prices. On the official side, the producer prices have been defended as fair and equitable and the assertion made that what is lacking is a good response on the part of the farmers who should replant their cocoa groves and upgrade their maintenance program. The raging controversy over cocoa supply response provided the stimulus to carry out this study.