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Indonesia is currently ranked sixth in the global production of cocoa. The vast majority (98%) of cocoa plantations in Indonesia are managed by around 1.7 million farmers covering approximately 1.6 million hectares. Unfortunately, the productivity of cocoa has declined in recent years, reaching only around 0.7 tons/ha, which is much lower than its potential productivity level. The low productivity can be attributed to the lack of appropriate technologies, inadequate market infrastructure, and limited availability of finance. Climate change also impacts cocoa plantations with prolonged droughts, varying and more extreme precipitation, rising temperatures, pests, and diseases, all of which contribute to reduced yields.
In partnership with USAID and Mars, I4DI implements the Advancing Cocoa Agroforestry Towards Income, Value and Environmental Sustainability Program (ACTIVE) to enhance farmer resiliency when facing climate change shocks to help them produce cocoa sustainably to improve their livelihoods. ACTIVE will begin its second program year in 2023, and seeks to spotlight key accomplishments and lessons learned in its first year of implementation.
Understanding Indonesia’s Cocoa Farmer Context
ACTIVE conducted a baseline study, a market assessment, and a gender assessment in early 2022 which helped to contextualize and right-size the project’s interventions, especially those that are geared towards women farmers. ACTIVE’s market assessment produced a segmentation of farmer capacity in the program’s three target regions: North Luwu, East Luwu, and North Kolaka. With this information, ACTIVE can tailor training and capacity building programs that address real-time constraints to farmer productivity. ACTIVE’s farmer programs will also include findings from the gender assessment, which identified several areas where women farmers felt unsupported and lacked resources for growth, including: Access to finance, Farm registration, and Financial literacy.
Developing a Workable Cocoa Agroforestry Model
It is a key component of ACTIVE’s mandate to develop and implement dynamic training of the agroforestry model for farmers. In its first year, ACTIVE worked with stakeholders, farmers, and experts to develop a workable Cocoa Agroforestry Model. Efforts included:
A crop selection database and tools that will help farmers to diversify their farms with crops that are complementary to Cocoa such as durian, coconut, or maize.
Identification of agroforestry learning sites to be used as learning centers for the cocoa farming community. ACTIVE selected 20 cocoa farms owned by farmers who are already practicing agroforestry as leading examples for other farmers looking to adopt agroforestry techniques.
Agroforestry training materials that detail the benefits of agroforestry for livelihood and farm, tree selection criteria, business calculation of the diversified farm and basic good agricultural practices for non-cacao trees. ACTIVE implemented a pilot test for these materials in learning sites in North and East Luwu.
Expanding Farmer Access to Crop Insurance & Financial Services
To increase farmers’ access to finance and crop insurance, ACTIVE piloted crop insurance services for 1,066 farmers in 3 subdistricts starting in July 2022. The program collaborated with CROWDE, an Indonesian financial service provider, to develop financial products suitable for farmers based on farmer needs identified by the market assessment conducted earlier in the year. ACTIVE and CROWDE also jointly developed an in-kind loan provision scheme intended to help cover farmers purchase of fertilizers and crop protection products. ACTIVE partnered with Mars to cover the insurance fee during the pilot phase.
Exciting Activities Anticipated for Year 2
Looking ahead, ACTIVE plans on rolling out some new activities in Year 2 that builds on the successes from Year 1. The program seeks to deepen relationships with Mars and local government stakeholders to realize key program goals for Year 2, including:
Scaling implementation of the agroforestry training, including development of a training of trainer program in pilot areas.
Increase uptake of crop insurance and in-kind loan services among cocoa farmers. ACTIVE will also work with local insurance associations to market and promote crop insurance more widely.
Improve business enabling environment for the cocoa sector through collaboration with local governments and the private sector.
ACTIVE is a public-private partnership (Global Development Alliance) between USAID and Mars. ACTIVE seeks to scale evidence-based agroforestry practices that utilize farm-level technologies to advance climate-resilient practices, increase smallholder farmer income, and ensure a high-quality cocoa supply.