Cacao Agroforestry System (CAS) improving productivity and profitability of smallholder cacao in Sulawesi

Cacao Agroforestry System (CAS) improving productivity and profitability of smallholder cacao in Sulawesi

wca2014-1645Janudianto Janudianto 1,*James M. Roshetko 1Mahrizal Mahrizal 1 1Trees, Agroforestry Management and Markets Unit (TAMMU) of ICRAF Southeast Asia, World Agroforestry Centre (ICRAF), BOGOR, Indonesia

Indonesia is the third largest producer of cacao in the world after Côte d’Ivoire and Ghana. Cacao production began in Sulawesi in the 1980s. It is now a major crop on the island, covering over 950 thousand ha, equaling 59% of Indonesia’s cacao growing area. By 2010 Sulawesi accounted for 67% of Indonesia cacao production.  As in other countries, smallholder production is the norm in Indonesia.  Approximately 2.2 million smallholder farmers cultivate 1.5 million ha of cacao, supplying 92% of the national production.  A study was conducted in Sulawesi to understand smallholder cacao systems and the importance of cacao to smallholder livelihoods.  The study identified the range of productivity, agro-biodiversity and economic profitability associated with smallholder systems.  A typology of four smallholder cacao systems was identified: monocultures, cacao integrated with shade trees, cacao integrated with fruit and timber trees, and homegardens.  Cacao is the dominant species in all systems, except homegardens where it is a minor component.  In South Sulawesi and Southeast Sulawesi farmers earn IDR 5.0 million (14% of total household income) and IDR 14.5 million (52% of total household income), respectively.  The productivity and profitability of smallholder cacao systems has been decreasing over the last 10 years. Yields have plummeted from 1000-1500 kg/ha to 500-700 kg/ha.  Discouraged, many farmers want to switch to other commodities, which could have devastating effect on the cacao industry. Key problems with smallholder production are the high incidence of pests and disease, limited access to quality planting material, and the low level farm management.   The paper provides analysis and recommendations based on the results of a scoping survey, garden inventory, and group discussion with farmers regarding how to improve the productivity and profitability of smallholder cacao livelihood systems, while maintaining sustainable environmental management. http://wca2014.org/abstract/cacao-agroforestry-system-cas-improving-productivity-and-profitability-of-smallholder-cacao-in-sulawesi/ 
http://www.slideshare.net/agroforestry/session-31-cacao-agroforestry-system-sulawesi-janudianto 

Necessary Price Premiums to Incentivize Ghanaian Organic Cocoa Production: A Phased, Orchard Management Approach

1. Mahrizal1, 
2. L. Lanier Nalley2,4, 
3. Bruce L. Dixon3 and 
4. Jennie Popp3
5. http://hortsci.ashspublications.org/content/47/11/1617.full

+Author Affiliations

1. Department of Agricultural Economics and Agribusiness, University of Arkansas, Fayetteville, 217 Agriculture Building, Fayetteville, AR 72702

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Abstract

Price premiums necessary to incentivize switching from conventional (inorganic) to organic cocoa (Theobroma cacao) production in Ghana are identified. Optimal, phased-replacement models for orchard management are used to determine when switching from conventional to organic is profitable. The decision is a function of orchard growth stage, price premiums, and yield loss. Results indicate that the net present value (NPV) of organic production under current market conditions is 21% lower than the NPV of conventional production. Analysis shows that, generally, the minimum price premium to convert to organic is just slightly lower, in percentage terms, than the yield reduction caused by growing organically.

What price organic cocoa in Ghana?

BY REBECCA SELVARAJAH · APRIL 22, 2013
http://blog.worldagroforestry.org/index.php/2013/04/22/what-price-organic-cocoa/

A price premium between 28% and 30% would have to be offered to entice cocoa producers in Ghana to grow cocoa organically. This is according to a study by Mahrizal et al published in Horticultural Science. Credit to purchase inorganic inputs is becoming more accessible to Ghanaian cocoa producers, who now have the choice to produce either organically or conventionally. That makes the results of this study more pertinent to their decision making process.

Mounting concerns about food safety, health, environmental and social welfare issues have increased demand for organic cocoa. Worldwide sales of organic chocolate increased to $304 million in 2005 from $171 million in 2002. However, the total market share of organic cocoa accounted for less than 0.5% of total cocoa production in the same period, possibly because conventional cocoa yields more and is more profitable than organic cocoa.

When a conventional producer converts to organic production, there is an immediate yield loss. Organic cocoa production has an estimated 30% lower yield than inorganic production. Additionally, a producer must wait three years for the organic certification that will allow him or her to be compensated with an organic price premium. A sufficient and stable organic price premium is, therefore, needed to encourage producers to continue growing cocoa organically. Issues of profitability, productivity and sustainability of forestry and agroforestry, are a key focus of the CGIAR’s Collaborative Research Project 6 on Trees, Forests and Agroforestry—of which the World Agroforestry Centre is a key partner.

Key questions producers ask themselves when considering a switch from conventional to organic production are: is switching from conventional to organic profitable? If so, when to switch given that the productivity of cocoa trees plateaus and then diminishes over time? The decision of when to switch is a function of orchard growth stage, price premiums and yield loss. This study provides a tool for producers to determine ‘if’ and ‘when’ it would be optimal to produce organic cocoa; and an estimated organic premium that bulk, organic cocoa purchasers must pay to incentivize cocoa producers to continually produce organic cocoa.

The study indicates that as yields decline, the profitability of converting from conventional to organic cocoa declines. Second, as price premiums rise, conversion becomes more profitable and the incentive to switch to organic production increases. Given a yield loss and price premium, this study investigates whether the age of the orchard influences when a conventional producer can profitably switch to organic production, and concludes that tree age is not a major determinant of when to switch.

The study also estimates the yield loss and premium price trade-off for organic cocoa, revealing that a price premium between 28% and 30% should be offered to entice cocoa producers to grow cocoa organically. The current premium price of organic cocoa is far below the estimated premium needed to entice producers to switch to organic production. Information on yield loss and price premium trade-off is very important to cocoa producers to determine whether organic production is sufficiently profitable to be adopted. For manufacturers, the information indicates the price premium necessary to secure a reliable supply of organic cocoa.

The obvious challenge for producers to produce conventionally is to obtain credit up front to purchase inorganic inputs. Given the advent of organizations like the Cocoa Abrabopa Association (CAA) established in 1998 in Ghana, credit is becoming more accessible to producers. The CAA works with input suppliers such as Ghana COCOBOD and Wienco Ghana Ltd. to supply agricultural inputs to producers. They extend credit in the form of inputs such as fertilizer, insecticide, and fungicide. As a result, producers now have the choice to produce either organically or conventionally making the results from this study more pertinent to their decision making process.

Sulawesi Tenggara: Pembangunan dan Permasalahannya

26 November 2012 adalah hari pertama saya menginjakkan kaki di wilayah Indonesia Timur, khususnya Sulawesi. Perjalanan tersebut bagi saya sungguh mendebarkan karena saya akan tinggal di Kendari, Sulawesi Tenggara (Sultra) paling tidak untuk dua tahun ke depan. Saya diterima bekerja disebuah lembaga penelitian dan pembangunan internasional yang bergerak di bidang pertanian, perkebunan, kehutanan, dan lingkungan. Kesan pertama yang muncul ketika mendarat di Kendari adalah cuaca yang sangat Panas. Menurut beberapa rekan yang telah bermukim di Kendari, cuacanya memang lebih panas dari beberapa daerah lain di Indonesia. Cuaca tentunya bukan masalah yang besar, perlahan tentu bisa beradaptasi dengan dengan keadaaan tersebut. Hari ini saya telah berada di Sulawesi Tenggara selama lebih dari 6 bulan. Berbagai pengalaman saya dapatkan dari kunjungan ke desa-desa dan bertemu masyarakat lokal dan pendatang. Sisi lain dari Sulawesi adalah Makanannya yang beragam dan selalu menggugah selera. Tulisan ini adalah sebuah bentuk ringkasan pengalaman selama 6 bulan. Di Sulawesi Tenggara, antrian panjang di SPBU khusus untuk Solar adalah hal lazim yang bisa kita jumpai setiap hari. Ratusan kenderaan yang umumnya truk antri sampai ratusan meter. Ketika Solar datang yang dibawa oleh mobil tangki, mereka dengan sabar menunggu giliran, kadang ada juga yang suka memotong antrian. Karena sudah banyak yang antri, satu tangki solar bisa habis hanya dalam beberapa jam. Inilah salah satu kondisi daerah yang selalu kekurangan BBM. Selain BBM, infrastruktur seperti jalan dan jembatan juga menjadi masalah tersendiri di Sultra. Perjalanan ke Asinua di Konawe, Konawe Selatan dan Kolaka utara sungguh meyayat hati. Di Asinua misalnya, banyak penduduk masih belum bisa menikmati jalan yang sudah di lapisi aspal, bahkan jalan berlubang dan berlumpur selalu bisa kita jumpai dengan mudah. Lain halnya di Konawe utara, jalan disana sudah pernah diaspal, namun jalan berlubang seluas kubangan kerbau terbentang dari awal perbatasan sampai kota Kabupaten. Banyak orang menyalahkan truk tambang sebagai penyebab jalan berlubang, disamping kualitas nya yang sangat buruk. Di Konawe Selatan, jalan lebih dari 30 KM yang berdebu, berbatu dan bercampur tanah liat adalah pemandangan sehari-hari. Padahal, daerah ini di huni oleh lebih dari 10.000 penduduk. Jalan oh jalan. Listrik Masuk Desa (LMD) adalah impian semua orang, namun bagi masyarakat di beberapa kecamatan seperti Asinua, Latoma, Tawanga di Kolaka, LMD adalah mimpi yang tidak pernah tersampaikan. Rumah penduduk hanya diterangi oleh lampu teplok yang bisa berisiko timbulnya kebakaran. Namun, listrik dari tenaga surya juga dapat dijumpai di beberapa rumah yang hanya menyala untuk beberapa jam. Sudah pasti, kehidupan masyarakat setelah matahari terbenam juga ikut terbenam oleh tidak adanya sumber penerangan dari negara. Sekolah, ini yang menarik untuk dibahas. Di Asinua masih ada sekolah yang berukuran 6 x 3 meter dengan bahan kayu dan atap rumbia. Bahkan, dinding sekolah pun tidak sepenuhnya tertutupi. Miris melihat kondisi sekolah ini. Namun inilah hasil pembangunan di Sultra. 65 tahun lebih indonesia merdeka, kondisi jalan berlubang dan tidak beraspal adalah pemandangan yang selalu disuguhkan kepada masyarakat. Listrik masuk desa (LMD) hanya sebuah mimpi yang selalu menjadi mimpi di malam selanjutnya. Sekolah dengan kondisi miris. Itulah beberapa potret desa di Sultra. Haruskah negara melepas begitu saja tanggung jawabnya?