Nigeria is the third largest producer of cocoa in Africa producing about 6% of the total World production. The objective of this study is to assess the competitiveness, comparative advantage and effect of government policies on cocoa production in Ondo State, Nigeria. The analysis was conducted for sole and intercropped cocoa production systems. Primary and secondary data were utilized for the study and were analyzed using the framework of the Policy Analysis Matrix (PAM). The results of the PAM indicated that the two production systems were profitable, competitive and have comparative advantage. Private profitability recorded in sole cropping was ₦69,986.13 against ₦91,246.33 that was obtained in the intercropping system. Social profitability for sole cropping was ₦121,865.14 while ₦158,989.10 were obtained in intercropping system. The values of the Nominal Protection Coefficient for output (NPCO) were 0.89 and 0.78 for sole and intercropping systems indicating that the farmers were taxed. This was further confirmed by the values of Nominal Protection Coefficient for input (NPCI) which 1.37 and 1.39 were for both sole and mixed production system respectively. Also, the Effective Protection Coefficients (EPC) for both productions were 0.72 and 0.65 respectively, indicating the presence of taxes.
Key words: Cocoa, competitiveness, farming household, policy analysis matrix, Nigeria.