The impact of European Union (EU) Sanitary and Phytosanitary standards (sps) on cocoa supply chain in Nigeria

Abstract

This study evaluates the effects of European Union (EU) Sanitary and Phytosanitary (SPS) regulations on Nigeria’s cocoa supply chain, with emphasis on stakeholder behavior, quality management, and economic outcomes. Cocoa is Nigeria’s leading agricultural export and a vital source of rural livelihoods, but stricter EU standards on pesticide residues, heavy metals, and microbial contamination have raised compliance and market access challenges. Using a mixed-methods approach, the study combines primary data from 330 stakeholders—farmers, agrochemical dealers, buyers, and exporters—within the Cocoa Innovation Platform in Southwestern Nigeria with secondary trade data from 2000 to 2019. Analytical tools include descriptive statistics, t-tests, and endogenous switching regression (ESR). The results show that SPS regulations have significantly transformed farming practices, input use, post-harvest handling, and export procedures, leading to improved product quality and stronger competitiveness in international markets. SPS-compliant stakeholders consistently achieved better market access and higher incomes. At the macro level, Nigeria’s cocoa export value increased more than fourfold following the introduction of SPS regulations (t = 8.669, p < 0.001). At the micro level, ESR estimates indicate that compliant farmers earned 57.52% higher incomes, while non-compliant farmers could potentially increase incomes by 40.5% through compliance. These findings suggest that SPS standards, though initially restrictive, serve as catalysts for upgrading and structural transformation in export-oriented agricultural value chains. The study concludes that investments in farmer training, traceability systems, institutional coordination, and access to approved inputs are critical for expanding compliance and maximizing welfare gains across Nigeria’s cocoa sector.