Cacao Travels: Dominican Republic – Yamasá Region & Development Agencies

Welcome to blog #6 on my cacao trip to Grenada and the Dominican Republic (DR), covering visits to development agencies in Santo Domingo; and cacao development projects, YACAO (processor) and FEDOPO (producers) in Yamasá.

1/26/12: USAID-REDDOM. En route to  USAID, I saw people gathered in Duarte Park to commemorate the birthday of Juan Pablo Duarte, one of the nation’s fathers. The park had a series of panels, which I visited later, chronicling Duarte’s life and role in the DR’s revolution for independence from Haiti. (The DR weathered more revolutions after this to gain lasting freedom, including one from Spain, after willingly joining it as a colony then changing its mind.)

I met Pilar Ramirez of the REDDOM Foundation, a Dominican NGO established to implement USAID’s Project REDDOM (Rural Economic Diversification, Dominican Republic). A five-year effort, REDDOM focuses on helping small farmers and allied small/medium enterprises (SME’s) diversify, and compete better in local and global markets, to improve their incomes. It was established after the passage of DR-CAFTA (DR-Central America Free Trade Act, 2007) to help the agricultural sector meet associated challenges (e.g., competition, quality/food safety standards, etc) and tap the opportunities (e.g., increased market access).

Key foci include capacity building, value chain development, small grants, and helping producers obtain affordable credit via partners ($10MM to date). Capacity building is tailored to producers’ needs and opportunities, such as obtaining organic certification or meeting food safety requirements. Developing value chains involves connecting supply chain participants from field to retail to create self-sustained enterprises, such as a yucca-casaba cluster uniting yucca farmers, casaba producers (bread made with yucca) and distributors. Small grants (over $2.8MM to date), support initiatives such as a women’s association in a CONACADO community that makes confections for tourist markets.

A program report indicates this work has yielded measurable gains for Dominican producers and their economy, while providing the U.S. with a secure supply of quality agricultural inputs that sustains American companies such as chocolate makers, and suppliers of chocolate ingredients like milk, almonds and beet sugar. Thanks very much to Pilar for such a welcoming, informative morning.

1/27/12: Cacao project in Boya, IDDI, Cortes Chocolate. I met up with Pam Schreirer, who works for the Dominican Institute for Integral Development (IDDI), and was a Peace Corps volunteer on a beekeeping project in the DR. Thank you Pam, for generously sharing your time and knowledge! IDDI focuses on social, environmental, microcredit and community economic development projects in numerous sectors, including agriculture.

We traveled north to a cacao development project in Boya, Monte Plata, in the Yamasá region. We passed oil palm plantations with stands of dead trees, an unfortunate example of unsustainable agriculture. Boya is a small community with a well-preserved church from 1533. IDDI, Cortes chocolate (Puerto Rico/DR) and the Peace Corps are collaborating on the project, which involves a cooperative of 116 members from multiple sectors, half cacao producers. Mateo DeSantis, a Peace Corps volunteer, is working with the cacao producers on a nursery, ecotourism project and chocolate processing. Cortes has provided training and land for the nursery.

Since many cacao farms were abandoned, farmers are replanting anew. Thus, Cortes has an opportunity to shape their future supply by recommending varietals, training producers on agronomic practices and collaborating on (or handling) post-harvest processing. The nursery has 16,000 trees, comprising seven hybrid varietals. Cortes is working to buy land for drying, fermentation, a demonstration/training farm, and an ecotourism site. This has been a challenging because the owner doesn’t have the title, and already sold portions through verbal arrangements. It’s not uncommon for a landowner to lack a title, since the cost can be formidable.

We met one of the co-op’s leaders, an industrious woman who is also the school principal and runs a small colmado (grocery/sundries). Pam and Mateo discussed a loan and finance with her. (Later, Pam told me a bit about the education system. Teachers are not typically credentialed and students attend for only a half-day due to lack of school space.)

Back in Santo Domingo, we met with Cortes. The company has a post-harvest site in San Francisco de Macoris, and a manufactures liquor, cake, butter, powder, drinking chocolate blocks, candy bars and cocoa mix in Santo Domingo. A staff member noted that Cortes is using hybrid cacao instead of clonal grafts to save labor and costs, and that these have been developed from a “cocktail” of 15 varieties selected to optimize yield and flavor. He also remarked on the project’s strategic benefits, such as building strong buying relationships where they don’t face competition from other buyers, and creating a customized supply.

Their buying practices exemplify the market dynamics for individual farmers. Cortes picks up cacao or farmers deliver it, pays them on the spot per their reported weight and any certifications (e.g., organic), weighs the cacao and assesses quality at their processing center, then adjusts the famer’s account if needed. They benchmark on market prices and deduct pick up costs. The staff said they prefer to establish pre-harvest contracts to set prices and secure supply, and lamented how difficult it could be to get farmers to commit. Many farmers prefer to remain free to seek out the highest price when they’re ready to sell, and there’s notable competition among buyers. As such, Cortes offers advance payments and credit to encourage farmers to sign contracts.

1/28/12: YACAO and FUNDOPO producer group. Christian of YACAO picked me up at 7:30 am we headed to the San Cristóbal province in Yamasá. He studied marketing, and manages inventory. I was incredibly grateful that he was willing to drive, especially so early – thank you! YACAO is a subsidiary of Pronatec, a Swiss processor/manufacturer (makes bars for Art Bar, Equal Exchange and others) focused on organic and fair trade.

We met with farmers from FUNDOPO (Fundacion Dominicana de Productores Orgánicos), in Villa Altagracia. Founded in 2002 with support from YACAO, they’e incorporated as a “foundation.” (Note: FLO Fairtrade doesn’t restrict producer organizations to legally-defined “cooperatives.”) They’re not obligated to sell to YACAO, but the company has committed to buy all of their cacao at a premium (separate from the Fairtrade social premium), cover organic certification costs, and provide credit, training and seedlings at cost. (Background here.)

We met in a community center that FUNDOPO built with the Fairtrade social premium. Nicolas Gomera, president and agronomist (on the right), presented a power point (en Español) on the group and its activities, with their certification manager, some producers and YACAO staff from Peru. This individual presentation was truly an honor – thank you!

Presentation key points: FUNDOPO has 877 members (15% women, 675 organic, 202 in transition). Farms average 2 ha—very small (though 20% of members aren’t “small producers”), spread across the eastern and central DR. They have several committees (environmental, projects) and multiple certifications including Biosuisse, USDA and EU Organic, CERES, FLO Fairtrade and Utz Certified. They’ve seen steady growth in Fairtrade sales but sell only about 20% of their crop under Fairtrade terms—the reality for many certified producers. They’ve used their Fairtrade premium for diverse needs, split 50/50 across farm and community/infrastructure development, including cacao trees, post-harvest training, demonstration plots, repairing a road; building a bridge, aqueduct, community center, office and multi-use site with a technical school and health clinic; police services, a truck and backpacks for schoolchildren. FUNDOPO also has established 30 cacao collection points, and invested in producer capacity building and quality improvement, with Fairtrade premiums and USAID funds. Of note—78% of their Fairtrade premium goes to projects while 22% covers certification-related costs (annual fees, staff), etc. It’s critical to realize these costs when considering the feasibility and net benefits of certification for small farmers.

We walked through a farm with a yield of 280 kg/ha, quite low relative to the national average of 800. The producers explained that Yamasá’s soil is less than ideal for cacao cultivation—having low organic matter, low pH (4.5 versus ideal 6.5) and sloping land that engenders nutrient loss. Many farms are also owned by older producers with aging trees they don’t prune, since they do just what’s needed to earn a basic income.

From here, we drove one of YACAO’s post harvest processing sites in Medina. (See YACAO photos here.) The site has a nursery to produce hybrids and clones, sold to producers for ten and 100 pesos respectively. Fermentation takes six days, with the cacao turned daily. Like CONACADO, YACAO uses solar dryers (photos at right and top), augmented by artificial dryers (natural gas) in the rainy season. Dried beans are put in a destoner to remove foreign matter, then sacked for shipment.

After this, we headed to Santo Domingo and talked about Dominican agriculture. Christian remarked that the country imports many crops that are grown domestically, while exporting the Dominican-grown varietals, and how this seems to be weakening domestic agriculture. (Presumably, this would be done only when it’s more profitable for the country to buy imports and sell its own exports – Ricardian theory.)

After returning, I ran out to shoot some photos in the early evening light, took in a hip hop act on the Malecón, and perused an artisan market with traditional handcrafts and interesting repurposed items, like a handbags made from records. Settling in bed, I felt deep gratitude for all who had shared their time so generously to support my learning journey, and stronger inspiration to foster positive development and sourcing efforts. Next up – a change in pace with a week at “Casa de Las Anas” in Moncion…

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