CAF America Insider Blog

Cocoa to Commerce: When Challenges Become Opportunities

October 1, 2015

This piece was originally featured on the US Chamber of Commerce Foundation’s blog here.

Cargill cocoa bean (1)
A simple paradox has presented itself across the globe in the realm of rural farming: How can smallholder farmers increase their productivity and incomes, when they do not have the financing and training needed to grow a substantial yield in the first place?

When smallholder farmers produce the majority of a crop in a given region, this presents a problem not only for the farmer and community, but for corporations that rely on this yield as part of their supply chain.

Corporations have recognized these challenges and have created programs that address both the very real problems of farming cocoa beans (pests, diseases, initial investment costs) and the larger economic, social, and developmental issues that have faced the communities where production takes place.

The resulting influx of development support, educational and training programs, and infrastructure construction have created a relationship of trust among the corporation and farmer as well as with  the local community.

In this context, Cargill has led the way in creating programs across the globe that support these smallholder farmers and their communities. “In Makassar, Indonesia (the world’s third largest producer of cocoa beans), located on the island of Sulawesi, Cargill has been employing over 300 people, where they source, grade, package and export more than 35,000 tons of high-quality cocoa beans annually”.

In an environment where over 600,000 smallholder farmers rely on cocoa production as their main source of income, supporting local communities and establishing sustainable relationships with these farmers has been instrumental in increasing both the yield and quality of cocoa crops for the past few decades.

By educating these farmers on better cocoa tree maintenance and post-harvesting techniques, the farmers are able to create a better product, resulting in more income for themselves, which they are then able to reinvest in their business or use to support their families and local communities.

In 2008, Cargill expanded its activities by establishing the Cargill Cocoa Education Centre in Gowa, South Sulawesi. The goal is to stimulate the planting of cocoa trees in new areas of Indonesia and to further improve growing and production techniques and practices.

“The Centre includes a cocoa tree nursery that applies the best available seedling technology and sources seeds from all over Indonesia. The nursery has a capacity of about 100,000 trees per planting period, which are distributed to local farmers free of charge to kick-start local cocoa production”.

Beyond education and training, Cargill’s own employees have renovated and refurbished three orphanages and one retirement home for the elderly, while supporting the creation of local schools, health clinics, and roads and bridges. Moreover, these employees stay engaged with the local community by routinely visiting these locations to deliver food supplies and to donate money.

Implementing programs such as Cargill’s initiative in Indonesia results in benefits to everyone involved. The smallholder farmers are making both a profit and a high-quality product they can be proud of, while the local community has improved infrastructure and welfare. For its efforts, Cargill has seen an increased output and profit due to the creation of a sustainable supply chain built upon trust and an employee base that cares about the environment in which they work.

Cargill is one of CAF America’s partners in global philanthropy, working to address the complex challenge of feeding the world while at the same time protecting the planet.

About Cargill Indonesia:

Cargill began doing business in Indonesia in 1974 by establishing a feed mill in Bogor, West Java. Today, Cargill is headquartered in Jakarta and has over 11,000 employees. We have 26 locations with offices, manufacturing plants and facilities throughout the country. Business activities comprise animal nutrition, cocoa, grain and oilseeds, palm oil, copra and sugar. Cargill is a responsible corporate citizen of Indonesia, and its local programs foster responsible and sustainable development, help protect the environment, and nourish the people and possibilities that reside in local communities. For more information, visit www.cargill.co.id

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