Indonesia's 'cocoa doctors' may help avoid looming supply crunch

JAKARTA, INDONESIA – Eight years after turning his back on cocoa after a string of harvest failures, Andi Asri has returned to the crop and is enjoying bumper production and profits thanks to a tie-up with a major chocolate maker that wants to secure long-term supplies.

Asri's plantation on the Indonesian island of Sulawesi is at the heart of Asia's largest cocoa producing region and is where some international confectioners are looking to boost output to feed growing demand for chocolate in the region.

Yet they must first reverse a yearslong decline in Indonesian output caused by pest problems, a shortage of expertise and competition from other crops such as palm oil that cost less to grow and earn higher returns.

"Pests and diseases made us stop," Asri said. "After we stopped, we changed to plant crops like corn and beans."

But he came across a cocoa mentoring program run by chocolate giant Mars Inc. and was impressed enough by what he saw to return to his original crop several years ago.

His cocoa planting area has since risen 75 percent and profits more than double what they were two years ago.

As wealth has increased to open up new chocolate frontiers in Asia, Indonesia attracted millions of dollars in grinder investments to add value to exports by processing cocoa.

Tackling the problem is not easy. Successive Indonesian governments spent millions of dollars in attempts to improve yields and ensure domestic supply for the new grinders.

But growing cocoa trees is labor intensive and many of Indonesia's more than one million smallholder cocoa farmers have become frustrated by years of battling pod diseases that increase wastage and hurt profits.

Mars has taken a direct approach to ensuring quantity and quality in Indonesia through a program to develop "cocoa doctors" who teach farmers modern production.

Formally launched just over a year ago after a decade of planning, the scheme's focus is on giving cocoa farmers bigger yields and profits to attract the next generation of producers.

Mars is seen as an industry leader on cocoa sustainability, benefiting from being able to take longer-term investment decisions that listed firms sometimes cannot.

Graduates may go on to become "cocoa doctors" like Asri, who not only grow cocoa, but also sell modern seedlings and pesticides and offer tree rehabilitation tips. Farmers using the cocoa doctors may sell their output to any buyer they choose.

"In order for my business to thrive I need farmers," Asri said. "That's the most important thing that we do as cocoa doctors; we mentor the farmers."

There are now 30 such "doctors" trained by Mars, and each is expected to support a minimum 100 farmers in the field.

Mars hopes to have 150 "doctors" by 2017 and aims to triple this by working with partners like Ecom, Olam and Cargill.

Demand for cocoa globally has grown at an average 3 percent a year over several decades, according to industry estimates, meaning an extra 500,000 metric tons of cocoa will be needed by 2020 to avoid a potential supply crunch.