Eastern Indonesia
Agribusiness Development
Opportunities (EI-ADO) - Cocoa

Increased incomes for Indonesian cocoa farmers in sustainable markets: NGO-private sector cooperation on Sulawesi Island. Full case study

sudo — Mon, 09 Feb 2015 08:35:23 +0000

VECO(2011)IncreasedIncomesIndoCocoaFarmersSustainableMarketsSulawesi.pdf

This report describes a collaboration between the NGO VECO, the leading global cocoa supplier Armajaro, and West Sulawesi farmers to develop direct market linkages and build on previous development work. The report briefly outlines the cocoa industry and the local cocoa chain and identifies key partners, their roles and activities. Testimonials from stakeholders provide comment on the process, benefits and challenges of the program. Benefits to farmers include improved production (up to 750kg/ha compared with an average of 500kg/ha, but potential for significant growth up to 2000kg/ha), better prices and income, terms and access to market and quality information. Sixty-seven farmer groups have qualified for UTZ certification providing another market opportunity. The report illustrates that collaborative programs can facilitate opportunities for traceability, production and quality improvements and that collective selling is a viable income source for organised farmer groups with improved productivity and quality. The report highlights the need for farmer organisations to become stronger and more organised at national and local levels to improve their bargaining capacity.

Publication Date:

2011

Author:

VECO

Publisher:

Vredeseilanden Country Offices Indonesia

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Pathways towards sustainability: private sector in the driver's seat - Reader: case of cocoa in Indonesia (Flores)

sudo — Mon, 09 Feb 2015 08:35:23 +0000

VECO(2011)PathwaysTowardsSustainabilityCaseCocoaIndonesia.pdf

To secure quality and quantity of agricultural products in the face of rising global demand, private companies are increasingly developing and nurturing long-term relationships with producers and their organizations. This case study describes how cocoa traders and manufacturers on the island of Flores are investing in producer organizations to ensure quality, sustainability and future supply, and ultimately their own survival. It provides a useful overview of the cocoa supply chain on Flores and then details how the efforts of P.T. Mars to secure their supply of cocoa has resulted in sustainable changes in the Flores cocoa chains. This includes improved organizational and marketing skills of farmers, increased resilience among farmer's organizations to cope and adapt to new situations, strengthened skills among farmers, and increased potential for collaboration and coordination among actors. Given the announcement by Mars Inc. that by 2020 all their cocoa beans would be from sources certified as sustainable, this approach presents a new and growing market opportunity for farmers.

Publication Date:

2011

Author:

VECO

Publisher:

Vredeseilanden Country Offices Indonesia

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Indonesia cocoa bean value chain case study

sudo — Mon, 09 Feb 2015 08:35:23 +0000

AFE(2006)IndonesiaCocoaBeanValueChainCaseStudy_USAID.pdf

Despite numerous initiatives to address Indonesia's inconsistent and poor cocoa quality, adoption of improved production and post-harvest practices has been limited. This study examines the influence of value chain governance and quality based incentives. The report includes a brief overview of the Indonesian cocoa value chain from producers to international trading and the enabling market. Analysis of the risks and incentives for improved cocoa quality concluded that incentives are either non-existent or not sufficient, but provided some considerations for future development practitioners. Incentives for processors to improve quality and consistency are not yet sufficient for transformation of their procurement operations and a strong cost benefit would need to be realised before they made any commitment to invest. Given strong competition, numerous market channels and the lack of quality price differential there is little incentive for farmers to improve production and post-harvest practices. Even given sufficient incentive, farmers must have the capacity to access and adopt improved practices. The report emphasizes that understanding the risks and incentives at all levels of the value chain is critical in deciding program interventions.

Publication Date:

2006

Author:

Action for Enterprise

Publisher:

USAID

Keywords:

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Impact of export tax policy on cocoa farmers and supply chain

sudo — Mon, 09 Feb 2015 08:35:23 +0000

Rifin(2012)ImpactExportTaxPolicyCocoaFarmersSupplyChain_USAID_SEADI.pdf

An export tax was introduced on Indonesian cocoa beans in 2010 to guarantee domestic supply for processing. This reduced cocoa bean exports by 51.4 per cent and increased processed cocoa exports by between 11.3 and 224 per cent. To assess the impact of this export tax on cocoa farmers and the supply chain, surveys were conducted with 60 farmers in South Sulawesi and various supply chain participants. A qualitative approach was used to analyse the cocoa supply chain from farmers to exporters or processors, and quantitative analysis for analysing the marketing system, efficiency analysis and price linkage. Results indicate that farmers' price is determined by the international price due to their higher bargaining power. It is the exporter that has a reduced margin or price differential following increased processing capacity and competition between exporters and processors for available beans. The study identified three marketing channels: farmers selling wet cocoa beans for cocoa processing; farmer's groups fermenting cocoa beans and then selling as providing the highest return to farmers; and farmer's selling dried beans to local traders.

Publication Date:

2012

Author:

Rifin, A.

Publisher:

SEADI Discussion Paper Series. USAID

Keywords:

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Traceability in the cocoa supply chain: an Indonesian context

sudo — Mon, 09 Feb 2015 08:35:23 +0000

Syahruddin-Kalchschmidt(2012)TraceabilityCocoaSupplyChainIndoContext.pdf

Traceability has become a major issue in cocoa supply chains due to the hazardous contaminants that can infect raw materials or processed products. In Indonesia, traceability in cocoa supply chains is still limited and faces several difficulties in implementation, including lack of technology and a limited legal framework to enforce it. This paper presents an overview of traceability in Indonesia and proposes a conceptual framework on how Indonesia could conduct traceability in cocoa supply chains. The authors use an approach proposed by Schwägele (2005), which divides traceability into two parts: tracking and tracing. Tracking focuses on following the movement of goods downstream as far as the consumer. The authors propose that growers track the transmission of prices along the supply chain to measure the economic performance of the chain. Tracing involves the flow and openness of information, which (once determined) can be a useful tool to monitor sustainability performances. The authors conclude that implementing traceability in the cocoa supply chain is not likely to present a financial burden since it is estimated to cost only three per cent of the retail chocolate price.

Publication Date:

2012

Author:

Syahruddin N. and Kalchschmidt M.

Publisher:

In '23rd Annual Conference of the Production and Operations Management Society, Chicago, Illinois, USA, 20-23 April 2012'

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Application of system dynamics in the international development cooperation: Analysis of decision taking among cocoa farmers in Flores, Indonesia

sudo — Mon, 09 Feb 2015 08:35:23 +0000

Borer(2006)ApplicationSystemDynamicsAnalysisDecisionTakingAmongCocoaFarmersFlores_Swisscontact.pdf

This report details the development of a Flores cocoa farmer decision taking model using systems thinking, in particular systems dynamics and the creation of a management flight simulator. The model is based on understanding the key elements in cocoa farmer decision taking and who farmers listen to. Each chapter of the report represents a step in system dynamics methodology as the model is developed and tested. The systems decision taking model is used to simulate the potential impacts of proposed interventions for the Flores cocoa value chain. The results indicate that improvements in the cocoa value chain are likely to be short-term unless the core problem of lack of farmer knowledge is addressed, rather than the specific constraints dealt with by each intervention. An alternative strategy to improve farmer knowledge is suggested and model results indicate this has a long-term benefit on income and productivity. Based on a critical analysis of system dynamics in international development, the author recommends using this methodology to test interventions prior to implementation.

Publication Date:

2006

Author:

Borer, M.

Publisher:

Swisscontact

Keywords:

Commodity:

Subsector analysis and design intervention: the case of Flores cocoa

sudo — Mon, 09 Feb 2015 08:35:23 +0000

Lagur(2006)SubsectorAnalysisDesignInterventionCaseFloresCocoa_Swisscontact.pdf

Flores cocoa production is characterised by low productivity and poor quality. This report describes the use of a value chain approach to design interventions for the Flores cocoa industry as part of a training program for Swisscontact LED-NTT staff. The report details the cocoa value chain in Indonesia and globally as well as Flores cocoa production and the local value chain. The methodology involved interviews with value chain participants from producers to national processors and exporters to identify constraints and opportunities, and field visits to assess possible interventions. The report outlines suggested interventions to address constraints, focused on improving farmer knowledge, skills and access to technology for improved practices, production and quality. Others relate to finance, market linkages, the business environment and industry advocacy. The paper concludes with several recommendations for implementation—focused pilot areas, sourcing of resources, change agents and partners for intervention, public and private sector support—and staff involvement.

Publication Date:

2006

Author:

Lagur, A.

Publisher:

Swiss Contact and LEDNTT

Keywords:

Commodity:

Trade-offs between income, biodiversity, and ecosystem functioning during tropical rainforest conversion and agroforestry intensification

sudo — Mon, 09 Feb 2015 08:35:23 +0000

SteffanDewenterEtAl(2007)TradeoffsIncomeBiodiversityEcosystemFunctioningTropicalRainforestConversionAgroforestryIntensification.pdf

This paper examines opposing land use strategies in cacao agroforestry in Sulawesi by using data on species richness of nine plant and animal taxa, six related ecosystem functions, and socioeconomic drivers of agroforestry expansion. Data was collected around Toro village in the Kulawi valley in four forest and 12 agroforestry plots. Findings reveal that transformation from near-primary forest to agroforestry had little effect on overall species richness, but reduced plant biomass and carbon storage by around 75 per cent and species richness of forest-using species by around 60 per cent. In contrast, increased land use intensity in cacao agroforestry, coupled with a reduction in shade tree cover from 80 to 40 per cent, caused only minor quantitative changes in biodiversity and maintained high levels of ecosystem functioning while doubling farmers' net income. However, unshaded systems further increased income by around 40 per cent, implying that current economic incentives and cultural preferences for new intensification practices put shaded systems at risk. The authors conclude that low-shade agroforestry provides the best compromise between economic forces and ecological needs. Certification schemes for shade-grown crops may provide a market-based mechanism to slow down current intensification trends.

Publication Date:

2007

Author:

Steffan-Dewenter I., Kessler M., Markmann J., Bos M.M., et al.

Publisher:

Proceedings of the National Academy of Sciences of the United States of America, Vol.104, No. 12 pp. 4973-4978

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Yield development and nutrient dynamics in cocoa-gliricidia agroforests of Central Sulawesi, Indonesia

sudo — Mon, 09 Feb 2015 08:35:23 +0000

Smiley-Kroshel(2010)YieldDevelopmentNutrientDynamicsCocoaGliricidiaAgroforestsCentralSulawesi.pdf

This paper studied the relationship between tree age, nutrient dynamics and cocoa yield to determine which resources may limit cocoa yield. The study involved surveys of 14 cocoa agroforests in Central Sulawesi, including soil characterisation and analysis, and pod sampling for yield estimates, bean weight and carbon/nutrient analysis. Soil carbon nutrient levels did not change over the timeframes of 8 and 15 years and there was no relationship between soil carbon/nutrient levels and bean weight or carbon/nutrient levels. Phosphorus was the most limited nutrient in cocoa yield and the authors suggest phosphorus fertiliser applications and liming to increase phosphorus availability. The authors conclude that cocoa-gliricidia agroforests are only sustainable in the immediate future. The paper suggests investigating alternative species of shade trees to gliricidia, such as cashew nuts or macadamias that do are not shallow rooted like cocoa and are therefore not going to compete with cocoa for nutrients in the same soil strata. The authors comment on the benefits of using a chrono-sequence as a research tool but also highlight its limitations.

Publication Date:

2010

Author:

Smiley G.L. and Kroschel J.

Journal:

Agroforestry Systems 78(2), 97-114

Keywords:

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Optimum level and welfare effects of export taxes for cocoa beans in Indonesia: a partial equilibrium approach

sudo — Mon, 09 Feb 2015 08:35:23 +0000

PermaniEtAl(2011)OptimumLevelWelfareEffectsExportTaxesCocoaBeansIndo.pdf

In 2010, the Indonesian government introduced a 15 per cent export tax on cocoa beans to promote investments in downstream value-added activities. This paper examines the impact of this tax on domestic welfare and whether the government has imposed optimal taxes on cocoa beans. The research uses a partial equilibrium approach to analyse effects of policy by upstream sectors on downstream cocoa manufacturing. It also presents econometric estimates of import demand and export supply elasticity. The findings demonstrate some positive effects of export taxes, including diversion of some cocoa crop to domestic use. However, this results in significant losses to cocoa bean producers and does little to encourage the development of a downstream processing industry, the stated objective of the policy. The findings also show evidence of interdependence between the policies of major cocoa exporting countries. The authors acknowledge that due to limited available data, better econometric techniques do not necessarily lead to improved robustness of estimates of elasticity. This could significantly affect estimates of optimal export taxes and, therefore, analysis of welfare effects.

Publication Date:

2011

Author:

Permani R., Vanzetti D. and Setyoko N.R

Publisher:

Paper presented at the 2011 AARES Annual Conference 8-11 February 2011, Melbourne, Australia.

Keywords:

Commodity:

Eastern IndonesiaAgribusiness DevelopmentOpportunities (EI-ADO) - Cocoa

Increased incomes for Indonesian cocoa farmers in sustainable markets: NGO-private sector cooperation on Sulawesi Island. Full case study

Pathways towards sustainability: private sector in the driver's seat - Reader: case of cocoa in Indonesia (Flores)

Indonesia cocoa bean value chain case study

Impact of export tax policy on cocoa farmers and supply chain

Traceability in the cocoa supply chain: an Indonesian context

Application of system dynamics in the international development cooperation: Analysis of decision taking among cocoa farmers in Flores, Indonesia

Subsector analysis and design intervention: the case of Flores cocoa

Trade-offs between income, biodiversity, and ecosystem functioning during tropical rainforest conversion and agroforestry intensification

Yield development and nutrient dynamics in cocoa-gliricidia agroforests of Central Sulawesi, Indonesia

Optimum level and welfare effects of export taxes for cocoa beans in Indonesia: a partial equilibrium approach

Eastern Indonesia
Agribusiness Development
Opportunities (EI-ADO) - Cocoa