Chocolate & Wine: A Common Fate?

Over the past decade the chocolate market has undergone an astonishingly fast process of “premiumization,” in some ways comparable to the segmentation of the wine market. Viticulture concepts, such as “goût de terroir,” “grand cru” and “single estate,” are increasingly bandied around to describe fine-flavor cacao beans and denominate origin. Some bar makers have gone so far as to recommend pairing their products with specific foods or spirits.

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Wooden fermentation bins, Hacienda Rio Dulce, Izabal, Guatemala

The boutique chocolate maker, To’ak, made waves with the launch of  bars retailing for over $300 a pop made from aged Ecuadorian beans replete with vintage year. Another noteworthy trend in the gourmet chocolate world is an intensified emphasis on origin. Onyx Coffee Lab recently launched its Terroir Coffee Chocolate, which combines coffee and cacao grown in the same region:

For the initial run of Terroir, Onyx has selected three distinct origins, two that will be familiar to the coffee world and one that is better known for its cacao. Their Guatemalan chocolate combines a 69% cacao grown amongst lemons, coffee, and honeybees with wash-processed Caturra and Bourbon varieties from the famed Finca La Esperanza in Huehuetenango.

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Insulation fabric to modulate temperature during fermentation, Hacienda Rio Dulce

These concepts may well be justified given cacao’s chemical complexity. Like wine, chocolate has a dazzlingly high number of chemical compounds that determine aroma and flavor (cocoa contains more than 600 flavor compounds; red wine has some 200). Compared with other industrial crops, cacao trees represent a vast genetic variability among cultivars by region. Trees’ genes interplay with the conditions in which they are grown to produce flavor: elevation, shading, rainfall, soil type, micronutrients and even endemic mycorrhizae, the fungi that colonize a plant’s roots. Proper fermentation and drying of the cacao and their subsequent transformation into chocolate tease out the bean’s full potential.

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Cacao beans being prepared for fermentation, Hacienda Rio Dulce

As growers, an equally intriguing comparison can be made between the cultivation of wine grapes and cacao. A recent article published in the New York Times profiled the Jackson Family Wines company in California and the winemaker’s adoption of techniques to anticipate and mitigate the effects of climate change. Like cacao and coffee, climate change is posing an existential threat to many traditional vineyard areas with one study suggesting that global output could plummet by mid-century:

It found that the area suitable for wine production will shrink by as much as 73% by 2050 in certain parts of the globe, with high potential for stress on rivers and other freshwater ecosystems as vineyards use water to cool grapes or irrigate to compensate for rising temperatures and declining rainfall.

Wine growers are challenged by increasingly unpredictable temperature swings and more frequent dry spells. This has prompted growers to expand into new, generally cooler regions, such as Oregon. These are trends we are also contending with at Izabal Agro-Forest. Across Central America, a combination of factors has already led to the conversion of farms from coffee to cacao driven principally by climate change. Drier, warmer weather is pushing cacao cultivation up the mountain into higher elevations along Central America’s cordillera.

In Nicaragua, the ideal coffee zone is between 700 and 1,700 meters (2,297-5,577 feet) above sea level, but rising temperatures and lower rainfall will shift the range to 1,000 to 1,700 meters (3,281-5,577 feet) by 2050, according to a 2012 study by the International Center for Tropical Agriculture. Temperatures have increased between 0.5 and 3 degrees Celsius (0.9-5.4 degrees Fahrenheit) in the region in the past century, and temperatures in coffee zones are expected to rise another 2.1 degrees Celsius (3.8 Fahrenheit) by 2050.

Simultaneously, the spread of roya — a type of fungal rust that affects coffee trees — is accelerating under the warmer conditions. In sum, we have much to learn from our wine-growing counterparts in Napa and Sonoma Valley largely because the threats are common.

Jackson Family Wines has adopted high-tech measures, such as sensor-activated wind machines. While these may not be cost-effective for most cacao growers, Izabal Agro-Forest uses principles of agro-forestry, most importantly, the interplanting of overstory trees. Interplanting not only provides shade, but also serves as shock absorption against heavy rains and wind while helping to retain humidity during dry periods. Izabal Agro-Forest utilizes native hardwoods with high resilience and commercial value, including, among others, big-leaf mahogany (Swietenia macrophylla). By producing a source of sustainable plantation mahogany, we hope eventually to relieve pressure on the species in its natural habitat, which is nearing commercial depletion.

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Interplanted native hardwoods and cacao at Hacienda Rio Dulce

Jackson Family Wines employs birds of prey by providing dozens of owl boxes and even bringing in falconers. Although controlling the population or behavioral patterns of fruit-eating birds may, at first glance, appear anti-ecological, farmers are contending with imbalances triggered by the human-induced decline of raptors and other predators. The explosion of prey populations that also happen to feed on crops can have deleterious effects on food production and even the geological landscape.

I recently became familiar with the concept of “trophic cascade,” which refers to a process in which a predator suppresses the population and/or distribution of prey. The reintroduction of wolves into the Yellowstone National Park has been perhaps the most salient recent example. Researchers discovered that the flourishing wolf population altered the behavior of deer, which had become emboldened in their grazing. More than killing large numbers, the wolves drove the deer away from low-lying river areas. The retreat of the deer led to the regeneration of vegetation, which in turn reduced erosion. The return of trees and natural grasses altered the course of streams, creating habitat for beavers and other wildlife whose populations began to rebound. Perhaps Izabal Agro-Forest can draw lessons from the experience of Jackson Family Wines as its cacao stands have faced losses due to an abundance of woodpeckers. The reintroduction of raptors could be an elegant solution, although any such measures would need to occur in close collaboration with ecologists.

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Cacao cultivars, Hacienda Rio Dulce

Like many winemakers, Izabal Agro-Forest has turned to red wigglers for help. With assistance from Byo-Earth and other partners, we constructed a worm compost facility whose vermicompost has helped improve nutrient content and bio-availability to levels superior to those of inorganic fertilizers. Just as important as its nutritional content, vermicompost is a soil conditioner that improves water retention, a crucial benefit given that cacao cultivation worldwide is almost entirely rainfed and subject to increasingly dry weather conditions.

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Local students visit recently-inaugurated vermiculture bins, Hacienda Rio Dulce

Our company has deployed the ancient technique of biochar which utilizes biomass converted to activated charcoal through pyrolysis. Biochar is effective at improving the fertility of acidic soils. (The majority of tropical soils tend to be acidic due to weathering and leaching, particularly after forests are cleared). There is increasing evidence that biochar promotes carbon sequestration.

Although wine grapes and cacao come from vastly different regions, they face similar threats. Growers of both are well-advised to swap notes on management techniques that enhance crop resilience and check the burgeoning threats posed by a changing climate. For die-hard chocoholics and wine connoisseurs alike, the question itself may be existential: Is a planet without wine and chocolate a planet worth living on?

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Steve Bergin of Conservation Cacao contemplating the biochemistry of fermentation, Hacienda Rio Dulce

Why aren’t there more Non-Timber Forest Products (NTFPs) on the market?

No matter how for or against timber harvesting somebody is, one thing that that nearly everyone asks me wherever I travel is why aren’t there more NTFPs available at a commercial scale?

NTFPs tend to appeal to the more stringent environmentalists because they almost always appear to be lower impact when compared to a timber harvest, usually consist of food or drink or are often tied to indigenous/ traditional cultures.  However, the production and harvest of certain types of NTFPs can lead to the creation of forest monocultures. These are not always readily noticeable to the general public. In a maple sugar bush, non-maple trees are removed over time to create open growing conditions for maple- yet it still looks like a closed canopy, later successional forest to the untrained eye. A forest floor full of ginseng or black cohosh (if the poachers don’t take them first!) may have a diverse overstory of trees, but passersby gaze at the colorful tree crowns rather than notice the absence of hiding places for small birds and mammals on the forest floor.

To the strictly production-oriented forester, NTFPs mostly bring social benefits, but usually not much additional cash.  Believe it or not, allowing a neighbor to collect mushrooms can translate into one more set of eyes that is willing to report unauthorized activities or to tolerate the visual impacts of a timber harvest.

But there are the cases when NTFPs generate a profit, so what makes certain NTFPs succeed in the marketplace while others do not?

It is a question to which there are many answers, but some that come to mind are that they are usually products with well-established markets and few substitutions (e.g., maple syrup, cork), are difficult to steal without getting caught right away (e.g., sap, cork, bamboo) or otherwise have strong governance/ enforcement mechanisms that ensure a steady supply under secure property rights or a price premium (e.g., illegal drugs, truffles). Without dealing with the issues of property rights, enforcement, access to markets and steady prices first, many NTFPs are harvested at excessive rates that put their supply in danger (e.g., American ginseng) or at unknown rates with low or poorly understood impacts (e.g., fungi).  Many NTFPs, such as fungi and plant parts, can be difficult to find and thus have high harvesting costs at commercial scales.

How does one address these issues in NTFP management?

  1. Remain low intensity: Wildcrafting is a term used to describe NTFP collection techniques based on the reproductive biology of the NTFP and the site. Producers must ensure that collection practices allow for continued reproduction on the site, such as through leaving the seeds, bulbs or stems of the NTFP behind.  Monitoring of the site is required to reduce the threat of poaching and to determine the timing of harvest.  The state may issue permits or licenses to enforce quotas and ensure legal ownership.  If the NTFP is not legally protected, NTFP gatherers may develop a network of secluded sites that are difficult for others to find.  Price premiums or market access may be difficult for NTFP producers to secure, however.  While direct trade to the end user may result in the best price, it may increase the cost to the producer if any processing or grading of the NTFP is required.  A network of middlemen and processors may develop in response to this, which offers pluses and minuses to the producer.  On the one hand, grading and processing may be done by people who can control costs better than the producer, but they may be willing to pay a lower price.  This may incentivize the producer to gather more or become more efficient at gathering.  All in all, there are simply too many variables that become difficult to control the more unpredictable the growth and mobility of the NTFP are.
  1. Go for high intensity: This one pretty much explains itself as it is the most familiar; use intensive cultivation techniques such as agriculture. Wine grapes are forest plants that humans have figured out how to manage under agricultural conditions for thousands of years.  Through daily care and maintenance, the human presence and organization of the crop addresses most property rights issues.  This allows the producer to focus on the growth, quality and sale of the crop, but with the increased risk of disease, drought and other environmental factors that come with monocultures.
  1. Hybrid techniques: Izabal Agro Forest has opted to control production of its NTFP under management, cacao, through agroforestry.  Agroforestry attempts to mimic the natural conditions that lead to higher quality cacao while allowing for intensive management of two or more crops.  Through dependency on multiple products and use of the agroforest system to reduce dependency on external inputs, it attempts to mitigate financial risk.  The use of cacao, understory plants, and high-value, slower growing hardwoods allows Izabal to maintain a presence on the farms year-round, thus ensuring the protection of property rights.  Since Izabal has two main products, cacao and timber, it can focus on managing for quality over the course of the rotation.  It is not fully dependent on the site’s characteristics to ensure a consistent, supply of NTFPs and can focus on selecting superb specimens and using techniques to increase quality.  It must still manage soil and water quality as a farmer would, yet treat the agroforest as natural system in order to provide optimal conditions for cacao flavor to develop.  Unlike rubber tappers, Izabal does not have to wander the forests in search of plants during fruiting season and then hurry to find willing buyers.  Izabal can focus on growing its crop and finding customers knowing that its crop is secure.

The bottom line is that there are trade-offs depending on the type of NTFP collected and what systems are used to manage them.  Many NTFPs are simply too costly to harvest at a commercial scale without the use of alternative management systems.  Izabal Agro Forest addresses these challenges in multiple ways.

The Ivory Coast: A case study on climate change and the chocolate we eat

The Ivory Coast has featured prominently in this year’s commodity news with reports of cocoa shipments falling far below levels of previous years. This week, Reuters reported that cocoa port arrivals dropped a dramatic 16% year-on-year since the start of the season last October. A series of recent reports have linked unseasonably dry weather to the sharp decline in grindings and exports. In particular, the Harmattan winds that blow from the Sahara southward across much of West Africa have been unforgiving to this season’s harvest. Industry expectations are for the trend to continue into the next growing season mainly due to low rainfall. Not only have volumes been affected, but quality as well with smaller average bean size and high acidity being reported. As a consequence, exporters have turned away as much as half of arriving volumes. The socioeconomic impact of this damage on the country’s smallholder producers has been extensive.

The Ivorian case is emblematic of supply-side challenges being faced worldwide by the cocoa industry. As the world’s largest producer, what happens in the Ivory Coast will have repercussions felt by chocolate consumers everywhere. This article reviews some of the proximate causes as well as the fundamental driver behind the crisis.

In June, a group of researchers at the International Center for Tropical Agriculture published an article examining the impact of climate change in West Africa’s cocoa belt and the results are cause for dismay. The authors predict both increased precipitation and temperature extremes during the dry season. They identify the forest-savanna transition zone to be the most vulnerable, predicting 87% and 57% drops in suitable growing areas in Nigeria and Ivory Coast, respectively, by 2050.

Relative climatic suitability (in percent) for cocoa of the West Africa cocoa belt

Relative climatic suitability (in percent) for cocoa of the West Africa cocoa belt (Source: CIAT)

Although it is difficult to draw a causal link to climate change, farmers in the Ivory Coast recently reported a mass caterpillar invasion that has affected around 17,000 hectares of growing areas. (Link: video). The extent of the damage and the potential spread of the caterpillar have yet to be fully understood.

Another effect of shifting weather has been the conversion of cocoa acreage to informal mining operations as pits are torn directly into cocoa fields to extract gold. In other cases, cocoa farmers are being drawn from parched farms to the mining regions, leaving trees abandoned.

An informal miner on a cleared plot (Source: AFP)

An informal miner on a cleared plot (Source: AFP)

Against this backdrop, ethnic tensions are simmering as thousands of Ivorian refugees return to their homes only to find the farms occupied by newcomers, often from other regions, in the wake of the country’s 2010 civil war. Many settlers include migrants from neighboring countries that have also been subject to a changing climate. The government’s efforts to adjudicate disputes through the issuance of land title have been woefully inadequate; overall, land tenure remains precarious. In such legal limbo, farmers are understandably reluctant to make needed investments in their orchards.

Displacement and the resulting resource conflicts have manifested themselves in widespread squatting across the country’s remaining protected forests. Experts estimate that the Ivory Coast has lost 80% of its forested area since 1960. Forest clearance continues largely unabated and cocoa farming is pervasive on such plots. Experts believe as much as one third of the country’s cocoa may originate from protected areas.

Burnt cocoa farm in a protected area (Source: Reuters)

Burnt cocoa farm in a protected area (Source: Reuters)

This has pitted human livelihoods against the survival of endangered species, including the pygmy hippopotamus and chimpanzees, endemic to these forests. Taking a more muscular approach, authorities forcibly evicted thousands cocoa farmers from these lands. The removal of over 50,000 people from Mont Peko National Park alone may take 10,000 tons of cocoa off the market in short order and is likely to further inflame tensions. Human rights groups have raised the alarm that the evictions have been linked to the illegal destruction of homes, intimidation, extortion and even murder.

Taken together, these factors paint a picture of long-term secular decline that will not be easily resolved by a year or two of plentiful rainfall. Even more concerning is that these trends are not unique to the Ivory Coast. Recent weather patterns attributed to El Niño have adversely affected production from Brazil to Indonesia. While laudable, private and public sectors efforts to combat the effects of climate change would seem to fall short given the magnitude of the problem.

One of the recommendations posed by the CIAT researchers is the adoption of agroforestry systems: “…in view of the relatively high rainfalls and short dry season in this area, the conditions for managing the projected increase in maximum temperatures through the systematic use of shade are particularly good. Cocoa could be grown here in multi-strata agroforests under a canopy of useful trees creating their own microclimate…” (Source: CIAT) Such systems are effective in buffering temperature extremes, modulating humidity, and reducing erosion caused by heavy rainfall. They are also intensive in their capture of carbon dioxide. While cocoa may be the proverbial canary in the mine, agroforestry systems, including those that produce cocoa, will undoubtedly play a role in any serious response to a changing climate.

Update – 15 Sept. 2016

Today, the Wall St. Journal published an article entitled “Cocoa Production Could Be Devastated by Climate Change, Experts Warn,” drawing attention to the potential impact of climate change on cocoa production worldwide. Genetic diversity and the development of new varieties drawn from a broader gene pool is cited as an important part of the response:

“To make cocoa crops more resilient, the industry needs a greater long-term focus on genetic diversity, which will allow plants to better withstand and adapt to changes in climate, said  Brigitte Laliberté an expert on cocoa genetic resources at Biodiversity International, a global research-for-development organization. Genetic diversity in the West African region is low, she said, and while a focus on better agricultural methods can help yields in the short term, in the long term there must be better research and funding for breeding more resilient varieties, she said.”

The lack of genetic diversity makes African cocoa inherently more vulnerable to pests and disease that can be spawned by changes in humidity and temperature vis-a-vis Latin America cocoa farms whose natural genetic pool is more diverse. This point certainly underscores the importance of avoiding monoculture around a handful of clonal selections; embracing endemic varieties; and employing agroforestry systems to enhance the species’ natural resilience.

Update – 16 Sept. 2016

Outcries have mounted over the government’s handling of the Mont Peko evictions with Human Rights Watch issuing a scathing statement:

“International law protects anyone who occupies land from forced evictions that either do not provide adequate notice or do not respect the dignity and rights of those affected, regardless of whether they occupy the land legally.”

Now homeless, thousands of former squatters have been driven into neighboring villages that lack the resources to accommodate them.

Bloomberg reported today that the impending cocoa shortage is likely to worsen over the remainder of the current season and into the next. By one measure (stockpiles-to-grindings), the market is at its tightest in 30 years with cocoa butter in particularly short supply. The head of Olam International’s cocoa division (the company is the world’s 3rd largest processor) stated:

“The light crop has just been a disaster in Ivory Coast and the Indonesian crop has been much smaller than we thought… We are seeing acute shortages in Asia, acute shortages in America, acute shortages in Africa… You are not really going to catch up with that deficit until the latter part of next year. And for that, you are going to need not only good main crops, but above-normal mid-crops.”

Heading into the peak Halloween and Christmas demand period, it seems likely that the scarcity will be felt by consumers and producers alike.

 

 

Pay your cacao farmer well!

Cocoa beans from a Theobroma cacao tree

Cocoa beans from a Theobroma cacao tree

There is a troublesome trend in the farm world; small farmers are throwing in the towel and big farms are getting bigger.  Naturally, these massive operations have effects on the environment, food costs, human health, communities, and more.

This year we had an experience that made this trend personal.  To be honest, we’ve had an awful harvest when we didn’t expect it.   As a medium scale operation, the income that our harvests bring can be a critical element to our financial sustainability.    We want to do things right, and that costs money.

Last November when our “winter” harvest usually comes in we had a series of weather phenomenons that threw a big fat wrench into our cacao efforts.  Climate change for us, has felt very real this year.  In fact we estimate a 70% decrease in production when compared to last year.  Thankfully we have good clients and we’re diversified; for example we’ve been able to sell lumber and services to make up the difference, but what about the small farmer?  How does one who already lives marginally cope with these situations?  Does he/she give up to go work for the industrial farms?

Most Cocoa farmers, the majority of whom live in West Africa, live in poverty.  In Guatemala, where most of the cocoa is grown by cooperatives, the socio-economic situation is not bad, but its still marginal.

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For the poor farmer that eeks out an existence and is burdened with the risks of climate change and commodity prices, something has to change.  And part of that is to address the value chain and to recognize that we can pay our farmers a little bit more given all of the warmth and goodness that chocolate brings us.

Recently Izabal Agro-Forest conducted a market study for cocoa and found that a substantial increase in the commodity price for cocoa who would have almost no price effect on the consumer, which is crazy!  What the message here?: Let us pay our farmers more:

Andrew Miller (of IAF & Big Leaf) comments:

“Higher cocoa prices need not result in proportionally higher chocolate prices as cocoa represents just 5% of the retail price (see table below). Even if this percentage were to double to 10% in 2020, as projected by Euromonitor, chocolate prices could remain roughly flat.”

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Small to medium sized chocolate makers generally understand that quality and social sustainability are critical elements of supporting good quality cacao and its farmers.  We just need the industrial guys to catch on.

Pay your farmer well!

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Growing Pataxte

IAF grown Pataxte, Izabal, Guatemala

Young Pataxte tree, IAF, Izabal, Guatemala

We recently started planting Theobroma bicolor, an overlooked, and uncommon relative of cacao.   “Pataxte” as its known among the Kekchi communities near our farm, has been used by the Maya for at least 1500 years; and most likely longer.

I would say the taste is similar to cacao but less “chocolatey” with more coffee notes, more astringency and something like a sweet buttery-lemon element. It’s smell is more delicate than cacao and it has an all-white seed.

For the few people that actually use Pataxte, it may be prepared like cacao; that is fermented, dried and roasted; oddly though, I’ve found that most Mayan growers skip the fermentation step.

Apparently it has a higher fat content than Theobroma cacao, and according to my archaeologist father, was prized by the Aztecs for its foaming qualities. Which is of course, a good thing when you’re making hot chocolate 🙂

Pataxte (theobroma bicolor) pod

Pataxte (theobroma bicolor) pod

In Belize and Northern Guatemala it is referred to as Cacao Silvestre (Wild cacao) or balam-te’ (Jaguar tree in Yucateco Mayan); unlike cacao, most Pataxte seems to be directly descended from its original Mayan lineages as it was never exported or hybridized.  As a comparison, I would say that 95% of the world’s chocolate derives from genetically “improved” hybrids. (That figure by the way, is not to be quoted, it’s just a semi-educated guess)

What really intrigues me about Theobroma bicolor is that (unlike its more popular cousin Cacao), it can be grown in broad daylight without shade.  So not only can we plant it on the edges of our forests, where Cacao might whither, we can also plant in areas of low shade or simply in an open field.

We decided to plant it under our tropical cedar trees (Cedrella adorata), which lose their leaves in the dry months so totally inadequate for Theobroma cacao.  This experiment is important for us because, if successful, all of a sudden our “plantable” areas are greatly increased.

Dwight Carter, from Frutas del Mundo, whom kindly supplied us the seedlings, suggested that with proper pruning the Pataxte could actually function as the shade-giving agent for a cacao plantation.  If successful, (and I think it could be given its height and broad leaves), growers could potentially have an all-theobroma plantation, which is fun.   I would love to hear if anyone has done this by the way!

Interestingly, the sacred maya book “Popol Vuh” mentions it as one of the foods of Maya paradise: “This will be our food: maize, pepper seeds, beans, cacáo & pataxte…

Theobroma bicolor

Theobroma bicolor

 

 

 

 

Standard forestry vs agroforestry

Cacao in Cocobolo grove: Izabal Agro-Forest

Cacao in Cocobolo grove: Izabal Agro-Forest

Over the years I’ve had many conversations about the benefits and so-called disadvantages of agro-forestry, and I’ve found that people with a forestry pedigree tend to be skeptical.  The question always comes down to whether or not there is a financial or biological burden when double cropping land.  It’s understandable, as a forester you probably want to prioritize tree silviculture, so the idea that you may have to adjust your method so that the other crop coexist in a healthy way is a no-go for some managers.  To be clear, there are sacrifices.  In a monoculture your management is 100% oriented around the success of one species, there are no other considerations.  For example, you can plant your trees as intensively as possible, (1100+ trees per hectare), personnel can focus on one set of skills, and possibly there are other considerations.

But of course I see this from a different perspective, first and foremost I see agro-forestry in terms of risk mitigation.

Timber, agriculture, cacao, livestock, apples, papayas, they all have risks; the most common are disease, fire, natural disaster and market volatility, a farmers life is full of ups and downs.  Trust me I know.  But rarely do these risks affect crops in the same way, whereas fire may wipe out a forest floor crop like cacao, only a concentrated extremely intense fire could kill a hardwood tree.  Similarly, diseases, common in fruits and vegetables rarely affect trees in the same way, particularly hardwoods.  Market prices for any commodity will see good years and bad, but rarely across the whole spectrum.  And  unlike fruit crops, you don’t necessarily have to harvest your timber trees if there is a market lull, you can wait the bad prices out (and in the meantime they continue to grow!).  It has been been said before, as long as the sun shines and rain falls, trees grow.

The biggest disadvantage with timber investment is the long, (sometimes very long) wait it takes a tree to grow to a good, harvestable size.  For tropical hardwoods the time-frame is usually estimated between 20 and 30 years, depending on the species of course.  But therein also lies the beauty of the symbiotic relationship that a forest floor crop (like cacao or coffee) and a longterm tree crop:  One provides you the cash-flow to continue operations and receive income, the other functions as the life-jacket that provides a low-risk and historically reliable investment.

There are other factors as well of course:  A poly-culture will look and function more like a natural forest than a standard monoculture.    Agro-forestry is more likely to provide consistent, long-term, employment to community members, there are at least two streams of revenue and I should also mention that in a world where high-quality land capable of producing food is extremely limited, it’s just the right thing to do!

Mahogany & cacaogrove on my farm, Izabal Agro-Forest

Mahogany & cacaogrove on my farm, Izabal Agro-Forest

Hardwood trees with cacao understory - izabalagroforest.com

Hardwood trees with cacao understory – izabalagroforest.com

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

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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

TCHO’s cacao

Tcho's dark chocolate form Ecuador

Tcho’s dark chocolate form Ecuador

While in California my wife and I dropped in on family friend Brad Kintzer, chief chocolate maker at Tcho in San Francisco.  Not only does Brad have the sweetest job title I can think of, he also works for a company that has developed an innovative relationship with its cacao producers.

Most of the world’s chocolate, at least 90%, is made of cacao grown by micro producers, meaning farmers with two hectares or less.  Many of these small farmers are organized into cooperatives.  In a sense this is great, but because you’re dealing with so many individuals there has been a historical lack of consistency in product.  Cooperatives can have any number of members, in Mexico and Central America my very broad estimate is that these average about 500 members.  Presumably in Western Africa and South America cooperatives are just as big or bigger.  So controlling individual practices and processes to attain uniformity of quality and flavor has been one of the major challenges of selective chocolate makers.  Moreover most cacao producers have never tasted the chocolate made from their own beans.

Tcho’s solution, and it’s a good one, has been to create a program that is dedicated to creating a direct partnership with their growers (tchosource).  Tcho provides the tools, training, genetic advisory and education to its buyers, empowering them to “improve their livelihoods and hone their craft”.  By doing so they provide the company with the high quality beans that enable the company to create excellent chocolate.  Its created a mutually beneficial relationship that stokes vested interest and a sustainable relationship in both the financial and social sense.
One of the more interesting components of the program is the use of “flavor labs”.  These are essentially small, affordable chocolate factories designed to quickly make chocolate and analyze the quality of a batch of beans.  And because the quality of the beans are directly affected by its growers and cultivators, Tcho’s major coop partners are supplied with their own “flavor labs”.  These field labs are essentially identical to the lab used in Tcho’s San Francisco headquarters.  And for the producers to really take advantage of this system, (and to facilitate communication), sensory training is provided to their producers around the world.

I found the concept so important that we’ve decided to invest in a flavor lab for our own cacao plantation.  The thought is that we’ll be more equipped to produce consistent & flavorful beans for our own purposes and also give local growers access to the equipment.  In the end we want chocolate to garner the same respect, in terms of attention to origin, genetics and process as that of wine or cheese and Tcho’s efforts are a big step in that direction.
Molly chatting with Tcho chocolate maker, Zohara.

Molly chatting with Tcho chocolate maker, Zohara.

Cacao bean cross section

Cacao bean cross section

Brad, Jefe de los Chocolates

Brad, Jefe de los Chocolates

Finished chocolate bar, yummy

Finished chocolate bar, yummy

View near factory

View near factory

On my last trip to the Darien I stopped in on this girl's family, whom have had cacao trees around their houses as long as they can remember

On my last trip to the Darien I stopped in on this girl’s family, they’ve cultivated the cacao around their home for as long as they can remember.