Indian cocoa farmers deal with a challenging market
By Arnav Chandrasekhar
When TNAU graduate Saravanan first leased a piece of coconut farmland fifteen years ago, he faced a complicated choice: nutmeg or cocoa? As a trained agriculturist, he was intent on using the land between the coconuts to farm an “inter crop” to supplement his income.
Cocoa is a valuable crop for a host of reasons. It is essential to the manufacture of chocolates, cocoa powder, and is used in Mexican sauces. But the uses don’t end with sweet foods — a byproduct called cocoa butter is also used in cosmetic products.
Nutmeg is a money-maker for farmers too. The nut of the nutmeg plant is ground into an expensive spice, used in cuisines worldwide. The oil of the nut can also be used in fragrances and cosmetics.
Both nutmeg and cocoa would have been good choices. But in the end, the quick yield of cocoa made it an easy choice. According to Saravanan, nutmeg plants can take up to seven years to begin yielding their seeds.But cocoa plants can give a farmer a return on investment within three years.
Saravanan’s decision paid off – in the subsequent years, the cocoa market has grown considerably in South India.Cocoa isn’t a get-rich-quick card for farmers, though. Coconut farmers are used to the (relatively) low maintenance coconut tree. According to Saravanan, farmers must take care with the amount of fertilisers and nutrients they use, as the cocoa plant may end up using nutrients that coconuts may need. And the most pressing problem still remains — the product needs to be sold.
Selling the food of the gods
The problem that Indian farmers face is on two sides of the same coin – they don’t produce enough for the domestic market, and at the same time are competing with cocoa producers throughout the globe. Some of these, such as the farmers of Ghana and the Ivory Coast, are said to be some of the best in the world.
In 2016, favourable conditions in Africa led to a huge increase in the supply of cocoa beans. When these flooded the market, the worldwide price of cocoa dipped. Indian cocoa farmers faced another surprise the next year, when significant import duties were removed from powdered African cocoa beans.
India also doesn’t produce nearly enough cocoa to be a global player. According to the Directorate of Cashewnut and Cocoa Development, India produces about 10,000 metric tons in a global market of 2,700,000 tons. This isn’t enough to satisfy India’s domestic needs, resulting in a considerable amount of cocoa imports.
India’s imports have also consistently risen over the years, while its exports remain the same.
Though government sources have said in the past that Indian cocoa matches the quality of Ivory Coast cocoa, some local buyers remain sceptical. One of these is Swati Sanjeev, veteran Coimbatore chocolatier and proprietor of the Dark Secrets brand, who has been making chocolates for 25 years. She sources raw chocolate from factories in Singapore to make her chocolates. She’s had bad experiences with local produce — thanks to import issues some years ago, she had to make do with Indian chocolate. “My customers immediately noticed the difference. Even with some Indian-made chocolates, there is a sour aftertaste,” says Sanjeev.
It isn’t just the physical quality of the bean that is important for producing chocolate itself – the flavour of the bean creates subtle differences in the final product as well. It isn’t clear if the problems that Swati Sanjeev has observed are due to inferior beans or a faulty manufacturing process, however.
Saravanan points out that the quality of an Indian bean may also depend on where it was grown. “ Cocoa is basically native to tropical conditions. In neighbouring Kerala the conditions are closer to its native country. However in places like Tamil Nadu, the climate is not the same. So depending on the temperature and the shade that the plant gets from nearby plant trees, the quality of the bean may vary.”
On the other hand, some Indian chocolatiers are in a position to cut out the middleman and take questions of quality into their own hands. One such is Soklet, the chocolate business founded by Pollachi-based entrepreneurs Karthikeyan Palaniswamy and Harish Manoj Kumar. Soklet is one of India’s only tree to bar operations — everything from the planting of the cocoa beans to manufacturing the final product is done in-house.
Brothers-in-law Kumar and Palaniswamy started out as farmers, and grew cocoa as an intercrop to supplement the farm. “Originally we sold the beans to Cadbury. Later on we experimented with making our own chocolate instead. That’s where it began,” says Kumar. Marketing Soklet’s dark chocolate to consumers hasn’t been easy — Indian consumers are used to sweeter flavours instead of the bitter flavours favoured by Soklet. But word of mouth helps here, with well-travelled Indians recommending these complex flavours to their friends and families.
But this also indicates one of the challenges facing Indian cocoa farmers and chocolatiers alike. The cost means that only the Indian middle class and above are able to consume chocolate on a regular basis. This economic trend is proven by consumption worldwide — the wealthy Swiss consume 8.8 kilograms of chocolate per capita every year, for instance. India, on the other hand, consumes a mere 200 grams per capita annually.
While the market for cocoa products is growing in India, producers will have to come to terms with the fact that a large part of the market will remain inaccessible if consumers cannot afford their products. It isn’t easy to follow in Soklet’s footsteps either — smaller farmers will find it difficult to afford the complex machinery required to process beans efficiently.
Indian cocoa farmers do have some cards in their hand. The growing Indian middle class means a fast-growing customer base. Indians are also well known for their love of sweets — they will willingly make room for Theobroma cacao, the food of the gods.
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When Harish Manoj Kumar of the chocolate start-up Soklet began planting cocoa, they didn’t have dreams of selling their own brand of high-quality chocolate. “ We originally planted cocoa to supplement the farm,” remembers Harish Manoj Kumar. He doesn’t recall any advertisement from the government of Tamil Nadu either. For Kumar, cocoa was one of a series of experiments in agriculture – one that just happened to click.
His story is repeated across Tamil Nadu, with many farmers picking up cocoa farming either by observing their colleagues or experimenting by themselves. Tamil Nadu is the second-highest cocoa producer in India, outstripped only by Andhra Pradesh.
In recent years, Tamil Nadu government schemes have happened, though not on a large scale. Chocolate companies such as Cadbury have also incentivised the production of cocoa in the past. “ A few years back the Government was providing cash to grow cocoa seedlings. But that was a short-term scheme,” recalls farm manager Saravanan. Data from the Tamil Nadu Department of Agriculture seems to confirm this — from 2016 to 2018, just under Rs. 1 Crore was allocated.
In contrast, cocoa in Andhra Pradesh has been embraced wholesale by the Government. The Horticulture Department of Andhra Pradesh claims to have pushed productivity to over 800 kilograms for every planted hectare, against the national average of 600. Cocoa planting is also integrated with the private sector here, in partnership with Cadbury’s parent company Mondelez, along with integration into the Rashtriya Krishi Vikas Yojana subsidies.