# _Diseases and Pests_

As mentioned previously, diseases and pests not a major problem for cocoa production, because of agro-ecological conditions, especially the relatively dry winter months. This allows Dominican cocoa producers to use little or no agri-chemicals, and produce certified organic cocoa. In fact, a growing share of cocoa producers are tapping into the certified organic cocoa market, and the number of producers seeking such certification is growing. The primary pest problem is rats and rat control is a high priority of the Cocoa Department. Organic producers use snakes as a means of biological control, and others use chemical raticides.

Despite evidence that diseases are not overly important for Dominican cocoa producers, more than 65% of respondents to the CRMG survey cited diseases as a very important form of yield risk. Disease risk was judged to be more important for smaller-scale producers, but over 60% of the largest-scale producers stated it was very important.

# _Credit_

Little institutional credit goes to cocoa producers. Some cocoa producers have access to credit through Banco Agricola which used to lend more to cocoa producers, but in recent years this funding has dried up. Exporters are the principal source of financing for cocoa producers. Shortterm financing by exporters-- “harvest loans” -- has a long tradition in the cocoa sector. Due to competition in the sector among exporters for purchase of cocoa beans, larger exporters have began to dominate the market and provide producers with pre-harvest credit to serve as guarantee of a forward selling contract. Intermediaries also provide some financing.

Producers typically have a long-standing relationship with a single exporter or exporter agent. Repayment of a loan is deducted from the final sale of the cocoa. In the case of longer-term loans the exporter requires a tangible guarantee, or collateral such as a land title. In both cases, interest rates are roughly equivalent to those charged by commercial banks.

About 40% of producers surveyed by CRMG reported that they had access to production credit. Most credit is from exporters (14%) and intermediaries (7%) (see table IV.11). Credit provided by exporters and intermediaries appears to be targeted toward larger-scale producers. By contrast, credit coming from either Banco Agricola or commercial banks, is not related to farm size. The category ‘other’ for sources of credit likely refers to remittances and or informal borrowing between other family members or neighbors. About 80% of small and medium-scale producers indicate that lack of credit is a “very important” form of risk.

A probit analysis of the determinants of credit uptake using the CRMG data shows that although larger farms were more likely to access production credit, landholding size is not a statistically significant determinant of credit use (CRMG, 2003). Better-educated farmers are marginally more likely to access production credit. Farmers with higher proportions of farm income coming from cocoa and those who specialized in farming (had larger income shares from on-farm sources) were more likely to access credit. These results suggest that cocoa credit markets serve growers who specialize in cocoa, but few other producers find regular access to credit.

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