Program Summary

Indonesia is the world’s third largest producer of cocoa, and cocoa is the main source of income and livelihood for over 500,000 smallholder farmers and their families. Its production is concentrated on the island of Sulawesi where cocoa is mainly grown on plots of 1.5 hectares or less. In 2002, the supply of cocoa beans to American chocolate manufacturers was valued at over $500 million, and about 85 percent of this supply comes from Sulawesi. However, the infestation of the cocoa pod borer (CPB), a pest that has destroyed up to 40 percent of the Sulawesi crop, has negatively affected the quality and production of Sulawesi beans, threatening the sustainability of the crop as well as the livelihood of the smallholder farmers who are dependent on it. Similarly, CPB infestation reduces the quality and quantity of cocoa available to cocoa processors and exporters in Sulawesi and thus creates concerns for the chocolate companies operating there. Moreover, farmers sell cocoa into a supply chain that includes a number of collectors and traders before cocoa is purchased by processors and exporters. Along this diverse chain, mixed source beans of differing quality are combined and often adulterated on their way to the end buyer. The complicated marketing chain and poor implementation of quality standards means that farmers often do not receive premiums for improved quality, limiting their incentive to invest in cocoa improvements.

Thus the challenges facing the cocoa industry in Indonesia are to build effective service mechanisms that can deliver improved technologies and training to all cocoa producers to prevent the negative effects of pest infestation, and the creation of farm-level incentives for the improvement of cocoa quality in order to support the needed on-farm investment to stabilize and improve cocoa production in Indonesia.

Under a USDA-funded 416(b) program, ACDI/VOCA partnered with the American Cocoa Research Institute (ACRI) in 2000 to implement the SUCCESS Project in Sulawesi that trained Indonesian farmers in essential non-pesticide growing techniques. In 2002, ACDI/VOCA was then awarded a three-year, $4 million USAID grant to join with USAID/Indonesia, Mars Inc., and the World Cocoa Foundation (WCF) to form the SUCCESS Alliance and build upon the previous SUCCESS Project. The objective of the two programs was to increase the productivity of smallholder farmers, leading to increases in rural income, improved yields and sustainable cocoa development.

The SUCCESS Alliance program in Indonesia sought to:

• Implement the Farmer Field Schools as the main method of information dissemination and training to farmers in crop husbandry and group formation;
• Encourage farmer organization through motivation and training of FFS alumni in representative groups to engage in joint marketing and other activities;
• Disseminate information on garden management, pest control, and quality issues through a communications initiative that includes market and extension channels as well as mass media;
• Implement the Farming as a Business training program focusing on the business management, marketing, and economic aspects of cocoa farming;
• Perform side-grafting techniques to rejuvenate old and poorly performing cocoa trees by transferring the genetic benefits of pest-resistant cocoa strains;
• Sponsor research on biocontrol techniques as a part of integrated pest management (IPM) that uses natural methods for the control of pests of the cocoa plant.

By the close of the USAID program in December 2005, the following accomplishments were achieved by both SUCCESS programs:

• A total of 65,790 farmers were trained in integrated pest management techniques through FFS—8,328 of whom were also trained in side-grafting, 2,982 trained in Farming as a Business, and 1,126 formed and trained in farmer organizations.
• A farming training video compact disc (VCD) was produced and distributed to an estimated 128,439 farmers.   
• An estimated 271,000 farmers were reached indirectly through media.
• It has been estimated that an average of $435 per hectare per year was saved or generated by FFS participants over the life of the three-year SUCCESS Alliance program, equal to 80 percent of Indonesia’s per capita income.
• 31 farmer groups were formed and trained.
• 5 mid-level business service providers were created. The BSPs will continue to provide extension and training services to cocoa farmers in Sulawesi.