In 2010, Mars became the first major manufacturer of chocolate products to commit to 100 % certification by 2020. At the same time, Mars recognized the limitations of certification-focused work and committed to go beyond certification to reach a yield goal of 1,000 kg/ha (this target was revised upwards to 1,500 kg/ha in 2013, aided by improved plant material, to make cocoa competitive and to reach ‘future living income targets’).
In partnership with international donor agencies, governments, and suppliers, Mars built a Cocoa Development Center (CDC) network across West Africa and Asia. The aim was to establish a private extension system that focused specifically on cocoa and promoted a ‘package of interventions’ for farm rehabilitation—including planting material, the use of appropriate inputs (especially quality fertilizer), and agronomic and economic training.
CDCs serve as distribution and training hubs, which provide support to selected farmers/business operators who are trained and coached as Cocoa Doctors. Each Cocoa Doctor runs a small independent business—a Cocoa Village Center (CVC)—and delivers agricultural training as well as access to good quality plants, fertilizers, and approved pesticides.
This creation of entrepreneurial cocoa farmers came to lie at the heart of CPQP, and it has become one of the guiding principles of IDH’s Cocoa Learning and Innovation Program (CLIP). In the Mars model, the thinking was to give enterprising farmers (the Cocoa Doctors) the opportunity to make a business out of generating success for other cocoa farmers. The net effect of this would be to increase yield and raise farmers’ profitability, while at the same time increasing the overall number of certified farmers (all of whom are trained by the Cocoa Doctors).
Mars had started the CDC/CVC model in Indonesia within its own pipeline. CPQP funding enabled lessons learned in Indonesia to be incorporated into a fully commercial program in Côte d’Ivoire. Intended as the core means for Mars’ Vision for Change program to reach scale (Vision for Change aims to reach cocoa producers in Soubré, revitalizing cocoa farms to enable higher yields and better quality), the Ivorian CDCs and CVCs made high-quality plant material available to farmers struggling with old trees. Mars intended to introduce clonal cocoa material and grafting techniques to aged farms in West Africa for the first time (alongside appropriate inputs and professional farm management).
Discover the stories behind five years of partnership with CPQP
- Early growth: how the Mars model evolved under CPQP
- Changing assumptions: Mars and the ban on grafting
- The three pillars of production: managing adoption problems in Côte d’Ivoire
Early growth: how the Mars model evolved under CPQP
In 2015, IDH carried out an analysis of Mars’ pilot CDC/CVC model for delivering the productivity package in Indonesia. The model was then in its early proof-of-concept stages. The study showed a workable return on investment at all levels of the model—from value-chain investor (Mars) to CVC operator and farmer. However, the payback period following the initial investment was revealed to be too lengthy for farmers. Access to tailored farm finance was then seen as a necessary component of successful farm renovation (because of the time lag between renovation and rejuvenation and a mature cocoa-producing crop). Mars has since begun working with IDH on a long-term financing concept incorporating a three-year grace period and three years of payback for farmers who undertake farm renovations.
The analysis also revealed that the scalability of the Mars model is heavily dependent on farmers achieving high yields. The potential achievement of high yields is also a significant motivation for farmers to invest in farm renovation and pay for services from Cocoa Doctors. However, Mars discovered that equipping Cocoa Doctors with superior-quality plant material was insufficient to create success. Farmers must also have a reasonable level of business acumen if they are to make profitable decisions and interest a sizeable potential client base in supporting the renovation of their farms.
Mars has now expanded its Cocoa Doctors’ agronomy training to include intensive business skills such as marketing and management. It has also revised the original yield target for the program (set under the CPQP at 1,000 kg/ha) upwards to ensure that farmers can make a living that allows them to invest in inputs and services.
Changing assumptions: Mars and the ban on grafting
CPQP aimed to create an enabling environment in which partners could prototype and perfect mechanisms for improving productivity and profitability in the cocoa sector (through the productivity package of inputs, training, and finance). In the case of the Mars CDC/CVC model in Côte d’Ivoire, this enabling environment was hampered by a shift in the landscape. Mars had been working on the assumption that permission would be granted to proceed with the introduction of grafting and clonal planting material on a large scale. This proved not to be the case. As the success of the CVC is built on increasing farmer yields to enable farmers to pay for the services offered, the business case for Mars’ program was weakened by a policy that restricted the use of grafting material.
In 2015, the ban on grafting was partially lifted—but only under highly controlled conditions. Mars is currently investing in a new strategy for its Vision for Change program, which will focus on developing public resources for smaller numbers of farmers: these include analysis of available plant material, next-generation plant breeding, and management of the swollen shoot virus (which severely affects both quality and quantity of yield, and which is eventually fatal to most trees that contract it).
The three pillars of production: managing adoption problems in Côte d’Ivoire
Mars has concluded that yield measurements are impractical as a benchmark of program success—particularly when farms are under renovation and will take several years to become productive. Instead, the company relies on ‘the three pillars of production’ (use of appropriate planting material, use of proper inputs, good farm management), believing that its technical expertise will allow it to forecast annual production when these are in place.
The key issue, as it was for all of CPQP, became whether the pillars were adopted by farmers. Both quantity and quality of adoption have been lower than expected. Mars has learned that farmers don’t tend to adopt all three pillars at the same time and are often reluctant to implement them even when all the inputs are made available. The company has come to view adoption not as about technical competency or even access to finance. Rather, farmers tend to make decisions when they trust they are receiving reliable information: in other words, information that is attractive enough for them to invest in its recommendations for the next 10–20 years.
Most farmers do not have the tools to plan more than one year ahead, which limits their motivation to invest. The current challenge, faced by Mars and by the cocoa industry as a whole, is how to target investment to adoption-ready farmers, or farmers that are trusting and entrepreneurial enough to make a change. It is through the segmentation and selection of farmers willing to invest and capable of investing (and via the delivery of information, technology, and trust) that Mars intends to help its suppliers move closer to envisioned productivity levels.
Farmer Development Plans will be used as a tool to help farmers be better informed: first by improving their knowledge on the condition of their farm as a system, and then by supporting good decisions regarding potential investments. Individual coaching will help selected farmers navigate detailed analysis of their entire farm, recommendations and costs for improving each section, and affordability estimates drawn up from roundups of family income. Mars will set up a tight monitoring system to track incremental change year on year at individual farm level, against the agreed plans.
See also: Training