Competitiveness, production, and productivity of cocoa in Indonesia

Abstract

Cocoa is one of Indonesia’s five foreign exchange earner, thus cocoa must stay competitive for the export market. Aims of this study are: analyze the cost structure, production and productivity of cocoa farming, the level of competitiveness, and map the types of government policies that affect the competitiveness of cocoa plants. The method used is descriptive qualitative and quantitative. Data analysis is done by using PAM (Policy Analysis Matrix). The results showed, structures are at the cost of production of cocoa farming in Indonesia almost 50 percent for wages, and 31.6 percent for land rental. The big percentage of workers wages indicates that cocoa farming is labor intensive production. In Indonesia total productive cocoa farms only 27.6%, with a productivity level of 655,515 kg per hectare. Cocoa farming in Indonesia is carried out with protective policies, the value of EPC 4.29, indicating the government’s policy towards the inputs and outputs of cocoa has been effective. While the PCR value of 0.51, indicating cocoa farming has a competitive advantage, but it does not have a comparative advantage. In conclusion, productivity, out-put prices, and exchange rates should be raised, and input prices should be lowered, so that cocoa farming can provide higher net transfer values for farmers. To improve the competitiveness of cocoa farming, the islands of Sulawesi and Sumatra are two islands that require special policies, especially on out-put price policy, input prices, and productivity, as well as improvement of other cocoa commodity farming systems, as these two islands contributed more the 80 percent of Indonesia cocoa bean production.