Cocoa in Indonesia
Steps towards
sustainability
Chris Claes
Welcome to Indonesia…
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….and the third largest Cocoa
producer of the world
• 712,500 tons/yr of dry Cocoa
beans (15% of world
production)
• Main production areas: Sulawesi
(71%), Sumatra and to a lesser
extend Java, Nusa Tenggara,
Bali and Papua provinces
• 1,5 million hectares cultivated
• USD 1,2 billion export yearly
• 1,400,000 smallholder farmers
(93%)
Cocoa players in Indonesia
Big players in Private sector:
Armajaro, Cargill, Mars Biosciences, Petra Foods, Nestle and several new
companies expanding business in Indonesia (Kraft, Bary Callebaut, …)
Important Institutions/Programmes: Indonesian Cocoa and
Coffee research institute ICCRI, Association of Indonesian Cocoa sector
ASKINDO, Cocoa Sustainable Platform CSP, Ministry of Agriculture (GERNAS
programme revitalizing Cocoa production in Indonesia),
Farmer Organizations involved:
mostly locally based farmer
organizations (JANTAN, SIKAP, AMANAH) not well respresented at national
level. API National farmer organization includes some local FO members
focusing on Cocoa
JANTAN and SIKAP
JANTAN (East Flores):
• Multi purpose Cooperative (2007)
• 630 farmer members (growing) from 25 villages
• Objectives: collective marketing (Cocoa,
Candlenuts, Cashew and Coconuts), member
services, capital building
SIKAP (Central Flores):
• Farmer Association (2010)
• 147 farmer members (growing) from 18 villages
• Objectives: collective marketing Cocoa, advocacy
What do these FO’s do in
terms of sustainability?
• Organize collective marketing and sell
bigger volumes to larger buyers
obtaining a better price for farmers
• Setting up a village marketing system to
control volume and quality of Cocoa
• Organize several trainings &
demonstration plots for ecologically
sound Cocoa production
• Socialization of Cocoa chain innovations
towards members, government and
other stakeholders
• Organize ICS and achieve certification of
production (RA, UTZ)
How is the relation of FO’s
with the private sector?
• In 2010 both FO’s sold wet Cocoa beans
directly to Mars (100 tons wet beans). In
2011 direct sale to Mars stopped but
continues to local traders (UD Gonzalu,
Com. Mayora, UD Fajar,..)
• Both SIKAP and JANTAN are organizing
fermenting and drying of Cocoa beans
themselves to sell again to larger buyers.
• Mars is still present on Flores and supports
farmers with training and advice
• Mars asks local providers to show price
transparency towards farmers and use
sustainability, traceability criteria provided
by Mars.
Support VECO Indonesia for
Cocoa
• Sulawesi and Flores
• Supporting 1900 Cocoa producer
members of FO’s
• Focus on FO organizational
strengthening and business
development (mentorship)
• Technical support for Cocoa
production (Farmer Field Schools,
Exchange visits, ICS development,
…).
• Linking different stakeholders of the
value chain Cocoa (government,
private sector, NGOs)
• Financial support for service
providers
What are the succes factors
for this case?
• Good leadership and management
potential at FO level
• Access to training and mentorship
from local FO and VECO-Indonesia
• Sustainability and farmer oriented
policies of Mars in Indonesia
• Booming Cocoa world market and
good prices
How do FO’s see the future ?
• Further develop Internal Control System (ICS) and obtain
international certification (RA, UTZ)
• Increase volume and quality of Cocoa beans (fermented &
dry) selling directy to larger buyers outside Flores island
(Mars,…)
• Improve service provision for members (credit, training,
price negotiation, lobby)
• Increase member base, registration and fee collection
Become a strong and independent Farmer
Organization that provides good
economical/social benefits for its farmer
members!
The Big Issue for the long term: WHO WILL
PAY FOR SUSTAINABILITY?
• Internal Control Systems as the backbone
towards certification
• Will mainstream be Rainforest Alliance or
UTZ or FT or … within 10 years? If
mainstream no premium?
• Low hanging fruit has been harvested,
ambitions are quite high and deadlines
narrow, farmers not strongly organized…
• FFS as basic method to get farmers
certified: rather expensive, too slow
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• Who will pay?
Other hot potatoes
• Instrumentalisation of farmers by
traders/processors vs. empowerment of
farmers (sustainability more than
environment)
• Is too much dependence from company
healthy?
• Investment of company  farmers move
to other buyer? (pre-competitive domain)
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Thank you for your
attention
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