# **IV.  Overview of the Dominican Cocoa Sector**

An overview of the cocoa sector in Dominican Republic is presented in this section. As described in the beginning of section III on the coffee sector, various data and information sources were used, including a CRMG survey of cocoa producers carried out in mid-2002.

## **A.  Overall Trends in Cocoa Production**

The Dominican cocoa industry first emerged in the 1880s as an alternative smallholder crop to tobacco, which was experiencing steep price declines. Growing conditions in the Dominican Republic were found to be favorable for cocoa. Although long overshadowed by coffee, cocoa production has expanded significantly since the 1970s, and recent trends indicate that cocoa is overtaking coffee in terms of producers, land area, and value of production and exports.

The land area planted with cacao trees increased from 65,000 hectares in 1971 to 115,000 hectares by 1980, and by 1987, approximately 40,000 MT of cocoa were produced on 134,000 hectares. During the 1990s, the Dominican cocoa sector achieved parity with, and in some years surpassed coffee sector in terms of its contribution to GDP and exports. Despite recent growth, Dominican cocoa producers traditionally have been characterized as having relatively low yields and low quality post-harvest product. The cocoa sector is similar, in this sense, to the coffee sector with problems related to quality. On the other hand, the cocoa production and exports are increasing, while coffee production and exports are in decline.

Like coffee production, cocoa production is vulnerable to damage from hurricanes. Cocoa production reached its peak from 1994 to 1998, averaging about 63,000 MT/year, but fell to about 26,000 MT in 1998/9 as a result of Hurricane Georges (see table IV.1). The cocoa sector subsequently recovered, and production reached about 45,000 MT in 2001/2. After Hurricane Georges, many cocoa plantations were rehabilitated and replanted, most with improved varieties. In fact, Hurricane Georges and high international cocoa prices has provided the sector an opportunity to introduce major changes, some of which have been made. As cocoa trees require up to six years to reach their full production potential, the post-Georges recovery in production has not yet been fully felt.

The CRMG survey indicated that about 60% of cocoa producers planted new cocoa trees in the past 5 years. Interestingly, producers with 5-10 ha were more likely to plant new cocoa trees (about 64%) and remove cocoa trees (about 21%) than smaller-scale (less than 5 hectares) and medium-scale (5-10 hectares). The high proportion of producers with new plantings indicates that good possibility for increased production in the near future.

**<u>Table IV.1 Cocoa Land Area and Production 1990/1 – 2000/1</u>**

||**1990/1**|**1991/2**|**1993/4**|**1995/6**|**1996/7**|**1997/8**|**1998/9**|**1999/00**|**2000/1**|**2001/2**|
|---|---|---|---|---|---|---|---|---|---|---|
|Area-000ha|121|121|127|137|142|153|109|139|126|125|
|Production- MT|43,157|51,210|63,960|61,937|52,442|69,727|25,861|37,107|44,908|45,468|
|Avg.Yield/ha|0.28|0.42|0.50|0.45|0.37|0.46|0.24|0.27|0.36|0.36|

Source : Cocoa Department Statistics (note: 1990/1 crop is the harvest year 1991).

High international cocoa prices in recent years combined with the sharp coffee price and production decline have created conditions under which the Dominican cocoa sector is overtaking the coffee sector in economic importance. The cocoa sector appears, in general, to be much more dynamic at this point in time than the coffee sector, and there is much optimism for the cocoa 53