MANILA, Philippines—Multinational confectionary giant Mars Inc. believes the Philippines could still revive its once lucrative cocoa industry to become among Asia’s supplier of cocoa beans—a main ingredient for chocolates.

Peter van Grinsven, cocoa sustainability field-research manager of Mars, said that growing cocoa plants is not an entirely new concept to Filipino farmers, who, for a period, had also delved not only in the production but also in the export of cocoa beans.

“Up until the mid-1980s, local production of cocoa beans was estimated at 50,000 metric tons, of which 27,000 tons were exported while the rest was consumed locally,” he says.

Grinsven says that cocoa beans were produced in huge plantations owned by private Philippine companies that have their own infrastructure, agronomists, nurseries, technicians, pest disease specialists and marketing network.

“But what happened in the Philippines was that with the land reform act, some cocoa farmers became small holder crops and local institutions weren’t ready to provide infrastructure, technical and market support for farmers,” he notes.

Thus, in a very short time, Philippine cocoa production had started to decline to 5,000 tons, all of which are consumed by chocolate makers in Manila.

Growing global demand

Meanwhile, on the regional front, there is a large and growing cocoa grinding industry in Asia but there are insufficient locally grown cocoa beans to feed it.

Combined, China, Japan, Malaysia and Indonesia import about 220,000 metric tons of good quality fermented beans from West Africa where 70 percent of the world’s cocoa is currently produced.

According to Mars, this scenario presents a golden opportunity which the Philippines can tap, as it has the potential to produce at least 100,000 metric tons of cocoa, making it the potentially second-biggest farm export-earner, next to coconut.

Based in Virginia, US, Mars produces some of the world’s favorite and leading chocolate brands including M&M’s, Snickers and Mars. It operates more than 100 manufacturing facilities in over 65 countries.

“This is an exciting thing for the Philippines. Asia, in the last 15 years, has seen an enormous increase in cocoa processing firms who buy cocoa beans to make as chocolate, cocoa butter and powder,” Grinsven says.

According to Grinsven, global demand for cocoa has steadily increased over the last decade, and this trend is expected to continue in the foreseeable future.

Add to that, he explains, world consumption of chocolate is increasing by 90,000 tons (90 million kilos annually for two reasons—the emergence of new consumers particularly China and India; and a gradual shift in consumption to dark chocolates from milk chocolates in traditional cocoa consuming countries such as United States and in Europe).

Dark chocolates have higher contents of cocoa, so more cocoa beans are needed to produce this kind of chocolate.

“It is also profitable since in the last four months, price has increased by $700. Currently, dry fermented cocoa bean costs $2,500 a ton in the global market,” Grinsven discloses.

Center of excellence

To jumpstart the revival of the local cocoa industry, Mars has launched last month the Mars Cocoa Development Center (MCDC) in Malagos, Davao.

Grinsven says the MCDC will serve as a “center of excellence for sustainable cocoa farming that seeks to demonstrate the positive aspects of cocoa cultivation and the suitability of cocoa for the Philippines.”

Together with non-profit group

ACDI/Voca, CocoaPhil and the Puentespina Farm in Davao, MCDC will validate and implement local and international “best practices” in all aspects of cocoa farming such as germplasm evaluation and breeding, farm rehabilitation methods and good agricultural practices, integrated pest management, and post-harvest practices and quality aspects of cocoa.

He explains that it is imperative to demonstrate to farmers, the government and donor institutions that the Philippines can indeed produce good quality cocoa in sustainable farming practices. Also, as in any other venture, farmers will invest in cocoa farming only after they are convinced that the rate of return on their investments is high enough.

Grinsven says they have decided to put up the center in Davao since the cocoa foundation is quite active in Mindanao, which has suitable conditions for growing cacao.

“In the Philippines, the cocoa industry can be very successful with the quality of the land, climate and the large [hectares] of coconut farms with nothing else on it,” he says.

“To restart the industry, Mars will bring the latest technology on cocoa cultivation to the Philippines; the expertise and experience we have, through the MCDC. What we need to find out is what will work best for a Filipino farmer in his own environment,” Grinsven explains.

He notes that it may take at least three years to get farmers to adopt new farm technologies.

Intercropping

“There is also an assured market for local cocoa beans because Mars will definitely buy from the Philippines at market value,” he adds. “We have a diverse portfolio of cocoa beans we want to use so we would be using different beans.”

As a start, Grinsven says farmers can intercrop coconut lands with cocoa. Currently, there are 3 million hectares of land planted to coconuts, of which, some 2.4 million hectares are monocropped lands.

A hectare of land planted to coconut can be planted with as much as 600 cocoa trees. Cocoa is a shade-tolerant crop and can thus be grown successfully with other trees such as durian and lanzones, aside from coconut.

He notes that if even just 10 percent of these monocropped lands are planted with cocoa, production may reach 200,000 tons, translating into as much as $500 million in export revenues.

More significantly, a huge portion of this amount will end up in rural communities where it will fuel the local economy, particularly in Mindanao provinces.

According to Mars, cocoa can soon potentially answer the Philippine rural population’s need for a cash crop—hopefully in the near future.