On the 25th of July 2016, thousands of Southeast Sulawesi cocoa farmers, in Indonesia received a total of 5.8 Billion Rupiah* in premium fees for their UTZ certified cocoa beans sales.
Through the local cooperative and UTZ certificate holder, Koperasi Gabungan Gapoktan (KGG), the farmers had been inspected and passed on several steps of quality assurance to ensure compliance with the voluntary certification standard of UTZ Certified, making them eligible for the premiums.
Under the SERAP Project, ADM Cocoa bought 2,274 Metric Tons of certified cocoa from KGG and its UTZ certified farmers. In November 2015, the SERAP Project was taken over by PT. Olam Indonesia, one of the big players in the Indonesian cocoa supply chain.
The cocoa commodity has recorded a significant price increase over the last decade.
Moreover, the demands are globally high. The Indonesian Statistical Institute reports that in 2014, 147,390 Metric Tons of cocoa beans was produced in Southeast Sulawesi alone. However, various factors are negatively impacting the national cocoa bean production, such as old trees or depleted soils.
Unsurprisingly, this causes a decrease of production volume. No doubt, cocoa farming is hard work and the trees need a lot of attention, but the income of professional cocoa farmers can be much higher by comparison of other crops.
Responding to the issue, Swisscontact through its Sustainable Cocoa Production Program (SCPP) in partnership with ADM Cocoa’s SERAP Program has trained more than 6,000 farmers in Kolaka and Kolaka Timur, Southeast Sulawesi. Swisscontact’s SCPP has overall supported more than 68,000 cocoa farmers in Indonesia since 2012.
The training covers among transparent market access also cocoa planting techniques, emphasizing on the sustainability of the plants and ecosystem.
This has become the approach needed to increase production volume in the future and ensure sufficient income for cocoa farmers and the important work they do.
Besides, consumers worldwide are increasingly demanding sustainability and traceability from chocolate product suppliers and Swisscontact is willing to step up to help improve the current situation.
Abdul Gafur as the chairman of Koperasi Gabungan Gapoktan expressed the commitment of the cooperative to maintain its certification for the farmers.
“KGG takes effort to ensure that there will be more certified farmers because throughout the certification program, there is assistance and monitoring of production that will benefit our farmers in the long run”.
“Currently, there are 3,834 cocoa farmers who receive their individual UTZ Certified premium payments, based on traceable volumes delivered to cocoa buying units from KGG.”
“We at Olam Cocoa believe that the best model to ensure a sustainable and robust cocoa community is by focusing on yield and quality improvement, ensuring traceability and most importantly providing fair prices to farmers through market access.
KGG’s initiative in Kolaka is a step in the right direction and confirms that partnerships like SERAP- KGG can help strengthen the local farmer community. I am sure the success seen here will motivate others to follow their model” Nikhil Chandan, Olam’s General Manager says.
“Certification holding is for cooperatives one of the most promising business models, ensuring sufficient income to provide other services and benefits to the members of KGG, such as training, providing loans, and being the voice of the cocoa farmers in Kolaka and Kolaka Timur.
I am very happy to see that the hard work of the farmers, the cooperative, and the public and private partners result in such a big amount paid.
And the best is that the premium payments are cashless distributed to buying stations and the certified farmers, providing full transparency on the use of UTZ Certified and cocoa quality premiums.” Manfred Borer, Swisscontact’s country director says.
*US$450,000
