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Calling all Chocolate Lovers! Building Trade Capacity in Indonesia


Because of its trade value cocoa holds sway over the livelihoods of the countless villagers who produce it less developed, tropical countries like Indonesia. Indonesia is the second largest producer of cocoa. Its production is concentrated on the island of Sulawesi where cocoa is mainly grown on plots of 1.5 hectares or less. In 2000 the supply of cocoa beans to American chocolate manufacturers was valued at over $140 million, and about 85 percent of them came from Sulawesi. The cocoa marketing system is competitive in Sulawesi and the farmer receives over 75 percent of the world market price. Unfortunately, the infestation of the cocoa pod borer (CPB), a pest that has destroyed up to 40 percent of the Sulawesi crop, threatens the livelihood of the smallholder farmer. CPB infestation also reduces the quality of cocoa and thus creates concerns for U.S. and European chocolate manufacturers.


Farmer training is based on a low-cost, low-input method for controlling the CPB developed by the American Cocoa Research Institute. It includes:
  • Frequent harvesting to remove pods from the garden while the larvae are still inside, thus preventing them from exiting and multiplying, and to reduce damage to beans.
  • Pruning to create a better-lit planting, which is not the preferred habitat for the CPB moth, and to enable farmers to better harvest all the pods.
  • Sanitation of pod husks and leaf litter to destroy larvae still living in the pod husks and to remove habitat in which the larvae may pupate.
  • Fertilizing to promote healthier trees that are better able to resist CPB.
  • Preserving natural enemies to assist in controlling pest populations.

ACDI/VOCA has partnered with USAID/Indonesia, Masterfoods (formerly Mars Candies) and The World Cocoa Foundation to form the SUCCESS Alliance, which promotes an integrated approach to farmer training, information exchange and applied research to control cocoa pests in Indonesia and increase the productivity of smallholder farmers while protecting the environment. This project is the follow-on to ACDI/VOCA’s original SUCCESS project, funded under a USDA 416(b) program.


Under the SUCCESS Alliance partnership, each partner has defined roles and responsibilities:

ACDI/VOCA manages and implements the field activities of the SUCCESS Alliance, coordinates and reports on project activities and hosts a website.

USAID/Indonesia has overall oversight, monitoring, and coordinating roles and conducts policy dialogue with the government of Indonesia.

Masterfoods (formerly Mars Candies) funds cocoa consultants and makes its staff and laboratory facilities in Sulawesi available.

World Cocoa Foundation, whose members are U.S. chocolate manufacturers, provides technical assistance and training support and acts as a coordinator and general resource.


So far more than 37,000 farmers have been trained in integrated pest management. Crop losses have dropped by nearly 30 percent, and incomes have increased by an average of $541 per year. This represents an 80 percent increase over the per capital GDP in Indonesia. Due to this success and the strong partnership with the chocolate industry, ACDI/VOCA has received USAID funding to train an additional 40,000 farmers and to expand the activities to a new province, West Papua.


Recently the project has emphasized marketing. Currently, farmers sell cocoa to collectors, who sell to traders, who combine mixed-source beans of varying quality before selling to exporters or local manufacturers. This complicated marketing chain, with its lack of quality standards, means that despite producing more and better quality cocoa, farmers are not getting better prices. However, the Alliance has received funding from the Dutch government to train farmers and traders on grading and quality selection and on farmer organization and leadership, so that farmers can begin group selling and buying of inputs.


The Alliance is also working with local manufacturers and exporters to link them with project-trained farmers in order to bypass middlemen and realize a higher price for farmers’ cocoa. The local manufacturers and exporters are thus able to obtain higher-quality beans by working with farmers who practice good husbandry and pest control. One local manufacturer, PT Effem, a subsidiary of Masterfoods, has now built a facility up-country in Sulawesi, to buy directly from smallholder farmers.


Under the SUCCESS Alliance project, ACDI/VOCA’s private sector partners, including Hershey’s, ADM and Masterfoods, have agreed to purchase at least $10 million per year in cocoa beans from Sulawesi. This guarantees a market for smallholders’ cocoa, and ensures chocolate companies’ access to more and better beans for their products.


The SUCCESS Alliance in Indonesia has also served as the model for new projects in the Philippines and Vietnam. Cocoa production is low in these countries, therefore ACDI/VOCA is working closely with local and international cocoa exporters and manufacturers to develop a complete market chain and boost Philippine and Vietnamese cocoa trade.