Rediscover cacao's economic potentials

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Sunday, June 27, 2010

IN THE 1950s, commercial cacao farms were established and cocoa beans production expanded into an industry in the following decade as processing facilities were put up by a group of Filipino investors. The industry started to take-off in mid-1980s as more investments were poured on commercial farms and on grinding facilities.

However, the growth of the industry ceased when the Comprehensive Agrarian Reform took effect in 1988, which resulted in the breakdown and redistribution of the commercial farms into small farm units. In addition, the outbreak of cocoa pod borer pest was unchecked causing some plantations to be wiped out and abandoned.

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"These factors resulted in the degradation of the cocoa estates and a serious decline in the cocoa industry," pointed out Nic Richards, the chief of party of Agricultural Cooperative Development International and Volunteers in Overseas Cooperative Assistance (Acdi/Voca), an economic development organization that fosters broad-based economic growth, raises living standards and creates vibrant communities.

Cacao is highly prized because of its beans which are processed into cocoa products such as butter, powder, paste/liquor and chocolate confectionery. In the Philippines, most of the beans produced by small holders are mostly made into tablea, a native chocolate confection.

Cocoa powder and cocoa butter are widely used in food products; cocoa butter is also used as a base for moisturizers, cosmetics, and suppositories. Cocoa seed and cocoa seed coat are used to treat intestinal conditions; diarrhea; liver, bladder and renal disease; and diabetes.

Recently, cacao growing is making a comeback. World prices of cocoa beans have gone up to US$3,200 per metric ton in 2008 compared to previous year's US$1,007 per metric ton. Global consumption of chocolate has been rising three percent annually with new market demand growing steadily in countries like Central Asia and Eastern Europe, India and various states of the Russian Federation.

In addition, there is a ready market waiting to be tapped in Singapore, Malaysia, Japan and China. These countries need at least 100,000 metric tons of dried beans annually. In the Philippines, there is also a big local demand for cacao beans. The domestic grinders require at least 30,000 tons of dried fermented cacao beans every year.

With the current annual average output of only 6,000 metric tons, the country needs to produce at least 100,000 metric tons of cacao beans by the year 2014 to meet the demand. "We have to take advantage of the big world demand for cocoa beans, but our country's production output is still so small and we need to plant more cacao trees," said Edward David, the president of the Cocoa Foundation of the Philippines (CFP).

Presently, the country has only 1.5 million trees producing only around 6,000 metric tons annually. As such, cacao farmers has to plant 50 million cacao trees in the next seven years to be able to reach the country's production target of 100,000 metric tons. Not to mention is the fact that those 400,000 neglected cacao trees have to be revived in order for them to be productive again.
Most of the cacao trees are grown mostly in Mindanao. The Department of Agriculture reported that the area planted to cacao in 1990 was about 18,388 hectares, with most of the crops growing in Davao, Zamboanga peninsula, North Mindanao, Autonomous Region in Muslim Mindanao, and Caraga. By 2006, the area further declined to less than 10,000 hectares. During this period, production fell from 9,900 tons to about 5,400 tons, with two-thirds of the production coming from Davao Region alone.

But thanks to a program funded by the United States Department of Agriculture (USDA) and implemented by ACDI/VOCA (whose practice areas are agribusiness systems, enterprise development, financial services and community development), cacao production is set to make an impact again.

Davao Oriental, the country's top cocoa producer with nearly 4,000 hectares planted to cacao trees, has set into motion a development program to expand cacao production with plant materials using high-yielding varieties.

"We've been receiving so many inquiries from foreign buyers about our cacao plantation. Some of these buyers from the US and Europe came to visit us and see our cacao trees, asking about our production output and prices," reported agriculturist Rene Pintor of San Isidro town in Davao del Norte, now emerging as the Philippines' "cacao capital."

In Davao City, the Department of Trade and Industry reports that there's a bright prospect for the cacao industry as it is expected to boost the exports of cacao beans and cocoa from the region, generating more dollar earnings and providing more livelihood and jobs for Filipinos.

"There's a lot of potential for the cacao industry here that will surely benefit so many farmers, processors, traders and exporters in this region," said Marizon Loreto, the DTI acting regional director.

Studies have shown that the potential expansion for cacao growing is huge: about 2,000,000 hectares of coconut lands are "highly suited" to be interplanted with cacao.ÿ "Cacao is highly suitable to intercropping and mixed farming systems, and can add more than US$1,500 per hectare of income from 500 mature trees per year," Richards said.ÿ "It is a proven crop in the Philippines, ready for resurrection."

Filipino farmers are being encouraged by chocolate manufacturers like Mars Inc. to expand cacao production given its favorable price in the international market. Mars executives added, however, that before the Philippines can take advantage of the good market for cacao, farmers need to improve their productivity, control pest and diseases and produce good, quality beans through fermenting.

Rediscover cacaos economic potentials

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