The Economics of Ecosystems & Biodiversity

Policy Brief : Cacao Agroforestry

TEEBAgriFood Indonesia

T E E B

Making Nature’s Value Visible

28 October, 2019

1. TEEBAgriFood, a project of UN Environment Program (UNEP),

provides a framework and technical assistance for evaluating all

visible and invisible impacts of agriculture & food systems.

2. The TEEBAgriFood Framework is a tool to evaluate or acquire

scientific evidence to support policy making, such as BAPPENASdevelopment plan for sustainable agricultural commodities.

3. This rapid assessment illustrates that spatial planning and training in

good agricultural practices for cocoa agroforestry are necessary to

ensure win-win outcomes for small-farmers, the cocoa sector, and

the environment.

Tropical commodities such as oil palm, coconut, rubber, and cocoa are a core part of the Indonesian economy and development strategy, from small-scale farmers to large agribusinesses

Agricultural commodities in Indonesia have been a driver of deforestation and associated greenhouse gas emissions, air pollution, erosion, water pollution, and loss of biodiversity

Cocoa productivity is declining in Indonesia. The cocoa sector faces challenges in terms of production efficiency, quality, price fluctuations, lack of expertise and access to capital

Because of rising demand and existing investments in the cacao value chain, Indonesia wants to boost cocoa output, add value, increase incomes, and increase exports

Cocoa agroforestry is a potential alternative with unique strengths, weaknesses, opportunities, and threats compared to other agricultural commodities

Context 1.

2.

3.

4.

5.2

Is cocoapart of the solution�

• Cocoa agroforestry production can be intensified, increasing yields significantly without causing deforestation• Cocoa agroforestry can diversify incomes and protect

vulnerable small farmers from price fluctuations• Cocoa agroforestry using good agricultural practices offers

better ecosystem services than some other types of agriculture, but

• Policies should target practices with fewest trade-offs between increased productivity and long run impacts, and• Spatial planning and regulation should be implemented to

prevent expansion of cocoa in to natural forest.

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Potential benefits of adopting cacaoagroforestry

• Increased productive lifetime of cacao trees through reduced physiological stress

• Increased biological pest & disease control through increased animal, bird, and insect diversity

• Increased nutrient cycling and addition with litter fall results inaccelerated decomposition & improved soil quality

• Increased carbon sequestration and storage (GHG mitigation)

• Increased nitrogen input by legume shade trees• Reduced weed cover under shade trees• Minimized soil erosion after heavy rainfall

• Enhanced pollination success

In comparison to full-sun monoculture

Clough et al. (2009)Abou Rajab et al. (2016)

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Scientific Research Recommends

• Rehabilitate existing plantations with younger plants and improved varieties

• Use proven intercrop agroforestry systems (e.g. coconut-cocoa)

• Apply Good Agricultural Practices including:• Appropriate type and timing of fertilizers and pesticides• Integrated pest management • Efficient water management• Preventing soil erosion and building soil organic matter

• Increase the provision of knowledge and training to smallholder farmers, with sustained extension service and traceable certification schemes

• Analyze economic viability of very small cocoa farms (<1ha)

BAPPENAS and Cocoa Stakeholder Priorities and TEEB Recommendations

Topics material to BAPPENAS

Issues identified by cacao sector stakeholders Recommendations

• Spatial Planning to conserve natural capital

• Water Quantity & Quality

• Soil Quality• Seed Quality• Research and

Development to improve agriculture production system

•Lack of knowledge about land suitability•Land use change and land occupation•Lack of knowledge about agroforestry (intercrop species)•High soil acidity•Anticipate Vascular Streak Dieback (VSD) and Black Pod (phytophthora fungus)•Anticipate climate change (drought)•Lack of availability of local seeds•Poor seed productivity•Research and database of seed types vs. taste

•Spatial planning for cacao restoration or expansion•Life Cycle Assessment to select win-win good agricultural practices (GAP)• Promote agroforestry through training and extension •Agronomy research•Financial assistance to promote R&D•Collaboration with academics and research institution •Collaborate with private sector to scale up best practices•Development of local seeds and evaluation of its environmental impact throughout its life cycle •Seed distribution/logistics

BAPPENAS and Cocoa Stakeholder Priorities and TEEB Recommendations

Topics material to BAPPENAS

Issues identified by cacao sector stakeholders Recommendations

• Education/Skills for

human capital

• Local Spatial Planning for

social capital (e.g.

availability of local

expertise)

• Labour inputs (incl. skills)

• Infrastructure

development

•Lack of knowledge of Good Agricultural

Practice (GAP) and application of technology

•Lack of implementation of GAP

•Aging trees

•Inappropriate Pruning

•Sanitation (fungicide application)

• Inappropriate fertilizer application

•Lack of knowledge about fermentation

techniques

•Insufficient farmers' assistance/extension

(Penyuluh)

•Waste management and utilisation

•On-farm post-harvesting facility

•Poor access to infrastructure (electricity,

clean water, etc)

• Promote Good Agricultural Practices

through training and extension services

•Monitor uptake of training and

implementation of GAP

•Benchmarking with best practise on cacao

assistance/extension programs (e.g. Cocoa

Doctors)

•Provide knowledge management tool

(digitisation) for smallholder farmers

•Capacity building and knowledge

management for certification

•Assistance in building post-harvesting

facilities

•Infrastructure investments in rural areas

with many small holder farmers

BAPPENAS and Cocoa Stakeholder Priorities and TEEB Recommendations

Topics material to BAPPENAS

Issues identified by cacao sector stakeholders Recommendations

• Food Security (Access/Distribution)

• Health

•Low income for farmers leads farmers to switch to other crops•Price indifference for fermented cacao on farmer level (no fair trade)•Aging farmers•Declining number of farmers•Farmers' assistance unavailable for low income farmers•Potential health impact to human (farmers) due to fungicide/chemicals/fertilizer application•Health benefit of consumption of cacao -cacao culture

•Cooperative for farmers to improve the livelihood, knowledge sharing, and bargaining power (BUMDES)•Development of regulation on fair trade•Implementation of fair trading•Pricing policy for premium market •Development of local education or vocational studies •Proper remuneration for extension/ farmers’ assistance workers•Development of Occupational health and safety standards for farmers and workers•Establish cacao culture consumption

• Sustainable farms• In the long term, agroforestry systems that use

GAPs are resilient and ecologically sustainable

• Sustainable incomes• Diversifying income and adding value can

improve wellbeing of small farms

• Land sparing• Increasing yield per hectare can increase cocoa

output without deforestation

• Non-market benefits (ecosystem services)• Agroforestry and less deforestation together can

mitigate climate change, save soil, and protect waterCacao agroforestry system; Ariani Wartenberg/ETH Zurich

Cacao Agroforestrypolicy can and should support:

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PossibleFutures

• Improve cocoa yields per hectare by• Replacing old plants and using best proven density of

intercrop systems• Improve soil health and timing of pesticide and fertilizer

applications

• Maximize benefits with spatial planning of production• By replacing existing cropland and degraded land with cocoa

agroforestry, and regulating areas with potential risk to water quality and biodiversity

• Add value by• i) increasing quality (fermentation or improved varieties),• ii) adding certification

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Bibliography• Abou Rajab, Y., Leuschner, C., Barus, H., Tjoa, A. and Hertel, D. (2016), Cacao Cultivation under Diverse

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• Daymond, A.J., Acheampong, K., Prawoto, A., Abdoellah, S., Addo, G., Adu-Yeboah, P., Arthur, A., Cryer, N. C., Dankwa, Y. N., Lahive, F., Konlan, S., Susilo, A., Turnbull, C. J. and Hadley, P. (2017), Mapping Cocoa Productivity in Ghana, Indonesia and Côte d’Ivoire. 2017 International Symposium on Cocoa Research (ISCR), Lima, Peru, 13-17 November 2017.

• Effendy, Pratama, M. F., Rauf, R. A., Antara, M., Basir-Cyio, M., Mahfudz, et al. (2019), Factors influencing the efficiency of cocoa farms: A study to increase income in rural Indonesia. PLoS ONE 14(4): e0214569.

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• ICCO Annual Report 2014/2015, International Cocoa Organization. Available from https://www.icco.org/about-us/international-cocoa-agreements/cat_view/1-annual-report.html?limit=35&limitstart=0&order=date&dir=ASC

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