Cocoa in Flores, Indonesia

Cocoa in Flores, Indonesia

Helping farmers to end the abusive Ijon practice

The big chocolate companies (Nestlé, Mars and Barry-Callebaut) are warning of a future shortage in cocoa production, caused by rising demand for chocolate in new markets such as India and China and reduced crop production due to climate change. There is a global need to create a more sustainable form of cocoa production that will boost productivity so that future demand can be met. Small-scale farmers, who are responsible for 90% of global production, are therefore key to this revolution.

Indonesia is the world’s third biggest cocoa producer, but its yield is relatively low. On the Indonesian island of Flores, nearly 1/10th of farmland is used for cultivating cocoa trees, which are essential to the regional economy. Flores is divided into 8 regencies and VECO works in three of them: Ende, East Flores and Sikka.

Cocoa is the main source of revenue for farmers in Ende, supplemented with other crops. SIKAP is the main farmers’ organisation in the region. Founded in 2010, SIKAP covers 16 villages and has 206 (108 male and 26 female) paying members, but about 900 farmers in total benefit from its services.

The East Flores cocoa sector was established in 1980 by the private company Rerolara, which is still the regional seed provider. Cocoa and livestock are the main sources of income. Since 2007, JANTAN has been the main farmers’ organisation with 218 (57 female) paying members and links with 900 producers in 25 villages.

The region of Sikka used to have a strong cocoa sector, but during the last decade production has halved due to pests and ageing plantations. There are 33,278 small-scale producers whose main commodity is copra (coconuts), whereas cocoa is a secondary crop. These producers are not yet organised in a farmers’ organisation.

Most of the farmers receive subsidized rice from the government to fulfil their nutrition needs. There is a need for generators because even houses which are connected to electricity lines receive an irregular supply.

Challenges

  • Production is low, below the national average, due to ageing plantations, a lack of Good Agricultural Practices and pests.
  • Most of the farmers need subsidized rice from the government to ensure healthy nutrition.
  • The cocoa quality does not meet the national standard because there are not enough checks.
  • The limited availability of drying storage facilities and other post-harvest facilities increases the cost of transport and reduces the cocoa quality.
  • Prevalence of the Ijon system (the practice of mortgaging unripe crops) in which the farmer sells their production before harvest to a moneylender for a much lower price due to the lack of credit opportunities.
  • Farmers' organisations are too weak to influence the cocoa sector.
  • There is no farmers' organisation in Sikka.
  • The farmers' organisations are dependent upon a single buyer, Comextra Mayora.

Our Strategies

  • To increase productivity, we foster Good Agricultural Practices through the P3S model: organic fertilisation, pruning, picking and sanitation. We spread this method by training cocoa experts who will later create Learning Gardens in each village to spread their knowledge.
  • To control pests, we import seedlings from Sulawesi Island and use grafting techniques to produce more resistant cocoa trees.
  • To secure the food sovereignty of families, we implement a more efficient multi-crop system that will diversify their production.
  • To stop the Ijon practice, we help farmers to access fair loans from credit unions.
  • To improve quality, we help the associations to create and supervise Internal Quality Controls that meet the Indonesian National Standard (SNI).
  • We are pushing for the creation of a farmers’ organisation in Sikka.
  • We help SIKAP to increase the capacity of its cocoa drying facilities.
  • To strengthen the farmers’ associations, we organize courses in management and entrepreneurship.
  • We work to improve the partnershipsof the farmers’ organisations with Comextra Majora, the single buyer, towards a stable business relationship where farmers can negotiate prices. As part of the deal, the company will offer different premiums according to quality.
  • We facilitate multi-stakeholder meetings, in order for the farmers to have a voice in the Cocoa Sustainability Partnership (the national cocoa network).

Beneficiaries

653 members, around 1800 farmers in the communities

Achieved

  • Creation of the Permai Cooperative in Sikka with 65 (M: 35, F: 30) members.
  • The collective sales of JANTAN and SIKAP have raised the price of the product in their respective areas, benefiting both member farmers as well as non-members. .
  • Comextra Majora’s buying policy motivates farmers to do the cocoa selection themselves, because they are assured that their total harvest will be bought.

What do we expect to achieve by 2017?

  • An improvement in the quality of cocoa according to the Indonesian National Standard (SNI).
  • A 53% increase in productivity
  • Multi-cropping will result in extra revenues and better food security for farmers.
  • SIKAP will have improved their cocoa drying facilities.
  • There will be a Learning Garden in each village where the organisations are present; JANTAN will also create a CLC (Cocoa Learning Centre) to act as a central training centre and laboratory.
  • The new strength of the farming organisations should lead to a rise in membership.

In the long-term

  • Better access to credit for farmers and associations will bring an end to the Ijon practice.
  • Comextra Majora’s experience should inspire other cocoa processing companies to make their sourcing policies more inclusive for small-scale farmers.
  • The global cocoa trade will be secured thanks to a more sustainable form of production that will be capable of overcoming the challenges of climate change and ensuring a fair price for small scale farmers.

Cocoa Sector Manager 

Peni Agustijanto - peni [at] vecoindonesia.or.id