An old story

Embera girls holding cacao pods

Embera girls holding cacao pods

Over the last few months I’ve heard a lot of hype about where the Cacao market is heading.  Huge investments are being raised in response to rising demand.  And its true the outlook is good, especially considering the growing premium market and untapped Asian markets that have barely begun consuming chocolate.  60% of the world is Asian so, there’s reason to be optimistic.  But…  I’m seeing a tendency toward the mistakes of the past.

Although Cacao is originally from the Amazon basin, it was most famously consumed by the Mayans in Southern Mexico, and Central America.  Today most of it is grown in Western Africa and consumed in the North America and Europe.  These are huge mono-cultures stretching across thousands of kilometers.  Countries like Ghana and Madagascar seem to be providing a steady supply of good quality fruit, but others have struggled and the cacao industry is rife with problems, political and biological.  Once again we’re seeing this industrial tendency to do things as big and as cheap as possible, leveraging economies of scale to the bitter end.

Broadly speaking, mono-cultures by their very nature are more susceptible to disease and insect attacks, which makes organic or low impact agriculture very very difficult.  Throughout cacao’s industrial history, we’ve seen huge single year drops in production due to out of control diseases.  They also tend to be one dimensional in that if you have a biological disaster or the market tanks, that’s it, your financial model breaks. Its one of the many reasons I’ve been a proponent of agroforestry for so long, I just can’t wait until we see it at an impact scale.

I’ve seen proposals for industrial projects throughout Latin America and its really just a repeat of the past, basically the attitude is: let’s take the latest, hottest commodity and plant it to the end of the horizon.  When I see these, I can’t help but wonder what kind of technical advice these proposals are based on?  Why aren’t these proposals more diversified?  What are the environmental and social impacts?

A productive cacao tree is sensitive, requires consistent phytosanitation and silviculture; basically it is generally susceptible to biological risk.  In my opinion an industrial cacao plantation should not exceed 200 hectares and larger projects would do well to geographically separate farms.   There’s a reason most of the world’s cacao is grown by small scale farmers, its never worked as an industrial crop.  Cacao fund managers should carefully assess management teams and conduct thorough feasibility studies, or they might see an old story repeat itself.   Don’t get me wrong, I think cacao is wonderful and has huge upside, I’m actually planting a lot of it, but there’s no doubt in my mind that the accepted (institutional) model can be improved.

(Click images for a higher resolution view)

My farm's tri-level approach to cacao cultivation

My farm’s tri-level approach to cacao cultivation

HPIM0721

A shoot grafted with heirloom stock in our nursery

Young Mahogany and cacao mixed species stand

Young Mahogany and cacao mixed species stand

Diseased Cacao tree, location not cited

Ah monoculture…

Cacao supply by country

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2 thoughts on “An old story

  1. Juan is right on as regards history repeating itself with the new cacao “gold” rush. With few exceptions large scale (200 + has.) plantations have not been successful. I remember the 1960s Hershey Plantation in Belize, which with all the technical advice and capital available at the time was not sustainable. If a large project is planned, then it ought to be small plots of say 10-20 has. separated by surrounding barriers of native hardwood trees or natural rain-forest. Furthermore from an economic point of view the shade overstory planting needs to be carefully designed to utilize suitable precious hardwoods,such as genuine (Swietenia m.) mahogany or one of the endangered Rosewoods, e.g. Dalbergia stevensonii, retusa or nigra, which tend to grow straight and have a limited crown with small leaves that allows a dappled light to penetrate. With mahogany you can plant at 4 x 4 m. intervals two years before the cacao and then slowly thin to 200 trees by age 15. Planting precious hardwoods is paramount to a savings account, where by age 25 the mahogany at 1.5 cubic meters per tree is worth more than the previous 20 years of cacao . Foresters need to work closely with new cacao growers,regardless of size, to insure a project’s future. Even if the cacao is eventually damaged by disease,pest or weak markets, the hardwood will be the life jacket.

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