producers. 43% of farms over 10 hectares produce _Hispaniola,_ compared to 37 % of under-five hectare producers.

An econometric analysis of the determinants of Hispaniola planting using data from the CRMG survey, show that larger landholdings, controlling for all other factors, were associated with a significantly higher probability of producing _Hispaniola_ (CRMG, 2003). Other key determinants included belonging to a sales organization and location at higher altitudes. Members of cocoa sales organizations are, holding all other factors constant, almost 40% more likely to produce _Hispaniola_ than are producers who do not belong to such organizations. Interestingly, producers who reported suffering extreme damage from Hurricane Georges were less likely to produce _Hispaniola_ , holding all else constant.

**<u>Table IV.5 Percentage of Volume Exported by Type of Cocoa 1998/9-2001/2</u>**

|**Types of Cocoa**|**1998/1999**|**1999/2000**|**2000/2001**|**2001/2002**|
|---|---|---|---|---|
|**Sanchez**|76.0%|70.9%|75.2%|70.7%|
|**Hispaniola**|12.3%|19.3%|15.4%|23.1%|
|**Processed Cocoa**|11.7%|9.8%|9.4%|6.2%|
|**Total**|**100%**|**100%**|**100%**|**100%**|

Source: Secretaria de Estado de Agricultura, Departamento de Cacao “Informe Anual de las Estadísticas del Cacao 2001/2” (2002); “ Numerous attempts have been made to induce Dominican cocoa producers to practice on-farm cocoa fermentation, or to process their product through producer associations and other processors. Such attempts were a major focus of the World Bank’s 1981 Cocoa and Coffee Project (World Bank, 1981), and a long-time priority of technical assistance from GTZ. Without fermentation, Dominican cocoa exports are limited to the US market. Increased fermentation will help expand markets and increase domestic value-added. Rapid growth of the producer cooperative CONACADO, which almost exclusively exports fermented cocoa, and provides price incentives that reward fermentation, indicates that a transformation toward fermented cocoa is underway in the Dominican Republic. Fermentation should lead to increased local capture by producers of value-added from the cocoa supply chain.

# **The Cocoa Fermentation Process**

In processing _Hispaniola_ cocoa, the beans are removed from the pod and are placed in airtight fermentation containers for a few days. During this period, sugars in the beans turn to alcohol. After a couple of days the beans are briefly exposed to air before being re-sealed. Finally they are exposed to air, but not yet put in the sun to dry, which causes the alcohols to escape from the beans. This process is not very complicated, and can be done with simple airtight containers. To produce fermentable beans, more care is needed in managing the harvest process and harvest labor must be more skilled than non-fermented harvest labor. Capital costs can also be a significant barrier to fermentation; estimates of the cost of a minimum scale fermentation and drying system are around US$ 5,000. Donor support for fermentation projects is designed to organize growers into groups (like CONACADO) and spread these capital costs over more producers Historically, about 90% of Dominican cocoa beans have been exported to the US (see table IV.6). In more recent years this share has been closer to 70%, as the share of fermented cocoa increases and other export markets are accessed. Other important export destinations are Italy and Canada.

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