Why increased cocoa yields are not enough

Is increasing the cocoa yields the only solution for a farmer to earn more?

My experience in Asia - and sadly it seems it’s the same in Africa and Latin America – suggests that the cocoa-farming sector has a real problem, in that it suffers from deep structural issues that are hard to work with.

First of all, many of the farms are just too small. Cocoa farms are typically less than one hectare and when you add the fact that yield capacity is limited too, we have an issue. On average, less than 1 kg of dry beans per tree is produced, that’s roughly between 500-1000 kg/Ha. This is totally inefficient.

Horticultural research tells us it’s possible to increase yield by up to 3 or 4 times, and yet still we are faced with the challenge of how we can increase output per cocoa tree on the ground. I like to think that what has happened with the apple tree gives us hope. In the Middle Ages, they were tall and produced relatively little and small-sized fruit, but now thanks to selective breeding, they produce enormous quantities of large sweet fruits. Indeed, now you can hardly see the tree behind all the fruit they carry!

The combination of both factors however, low yields on small lands, makes cocoa farming unprofitable and uninteresting financially, especially when a metric ton of cocoa is traded in London at around 2000 USD/MT and bought from the farm at prices 30 to 40% lower than that.

What is the result when incomes are so low?

There are I think 2 possible scenarios.

1. The first option is when cocoa farmers have alternatives, as it is the case in Asia. They can quickly switch to another crop, but often actually opt for “non-farming” income diversification. This is leading to a gradual abandonment of agriculture. 
2. A second and more troubling situation is when cocoa farmers are isolated and don’t have access to other alternatives. There the consequence is often extreme poverty and all the social and environmental problems that go with it. 
    

A common solution from the cacao industry is to try and boost the cocoa sector income by pushing for yield increases per Ha, through the implementation of best practices (including assistance with training, financing and premiums).

The reality however is that this doesn’t always offer farmers ‘the’ solution they need to cross the poverty threshold line. It’s not easy for cocoa farmers to boost their productivity.
It requires a lot of hard work and heavy investments in grafted seedlings, as well costly fertilizer and pesticides. And sadly, a doubling of yields doesn’t always mean a doubling of income, especially in very volatile markets.
It’s unfortunate but true: if every cocoa farmer doubled their yields, the surplus production would inevitably mean prices would probably go down resulting in an income status quo and no progress would be made.

What are the possible solutions?

It is obviously very hard to achieve miracles when the structural base of the cocoa supply chain is so fragile (small farms, low yields, climate change, government regulation, etc.). As a consequence, holistic programmes are virtually impossible to manage in cocoa producing countries. Our support programmes must therefore be more connected to the realities in the field, and be scaled up progressively with very well identified communities. In truth, I believe cocoa on its own will never offer a sufficient-enough income and that smart economic diversification has to be gradually incorporated into any field support programme we propose.

We do want to offer more stability to our cacao-trace farming communities and ensure that their entire quality product delivers premium prices, and that if and when they do double their yield their excess quality production achieves the same. It’s why we have made a decision to start a number of side projects to support our Cacao-Trace communities and offer them innovative farming techniques, advice on Agro forestry and clonal selection etc. as well as interesting income diversification programmes.

A sustainable solution will only be efficient if everyone that grows, produces or enjoys chocolate puts their hands together. It is why our team at Puratos has chosen for a value creation strategy that works for everyone, one that is underpinned by transparency and a genuinely exceptional tasting chocolate. The mastery of fermentation via post-harvest centres is our key to delivering this superior taste and giving added value to our customers. Like this we can then share this benefit with our Cacao-Trace communities through a quality premium and the Chocolate Bonus.

It’s only by creating value with improved taste and sharing that added value back with the cocoa farmers we work with that we can create a sustainable future for the industry.