Rehabilitating cocoa growing in Ecuador

Area: 2,000,000 hectares
Level of the Study: Advanced Feasibility
Location: El Oro, Guayas, Los Ríos, Cañar, Bolívar, Pichincha, Manabí and Esmeraldas Date Consultancy began: March 1981
Date Consultancy ended: September 1982
Total Contract Amount: USD $ 338,297
Name of associated firms: Association ASTEC-PIDELTA
Customer: National Development Bank

Characteristics of the Project:
The study area is located in the coastal region of Ecuador, i.e., the provinces of El Oro, Guayas, Los Ríos, Cañar, Bolívar, Pichincha, Manabí and Esmeraldas; in approximately two million hectares, 825,000 ha. have suitable soils for growing cocoa but only about 340,000 ha. are currently used for this crop.
Tecnad S.A.

The fundamental aim was to increase cocoa growing and enhance cacao production and productivity by rehabilitating and renewing this tree species. This will provide work for more farmhands, enhance medium and small farmers’ standard of living, and improve the balance of payments by increasing exports.

Description of the study:

It involved three stages:
  • Preliminary
  • Assessment
  • Development project

a. Preliminary stage, to establish the strategy and procedure for the assessment, including a base map and defining homogenous zones for cacao development.

b. Assessment stage, to do the detail work:

1. Study the project area

  • Physical study of the area: photography, climate, soils, current and potential use, irrigation, zoning, forestry
  • Physical infrastructure: main and secondary roadways, ports
  • Socioeconomic characteristics: population, human settlements, health, education

2.Cacao crops, production and exports:

  • Area growing cacao: by ecological zones, by productive age in each ecological zone, by technological level and farm size, by genetic material and age of the genetic material
  • Cacao production and companion planting: By technological level and stratum
  • Current status of crop: cultivation, pruning, fertilization, health control, irrigation, processing
  • Characteristics of cacao plantations: current land use, technological level of plantations, characteristics of family groups, housing, infrastructure for processing cacao, location and access and economic aspects

3. Marketing, industrialization and market study:

  • Domestic marketing: production, volumes sold, domestic gathering and markets, quality and classification, transport, marketing channels, prices, marketing margins, infrastructure, governmental action
  • Marketing abroad: supply, demand, consumption, prices, Ecuador’s position on the international market, customs tariffs
  • Situation of the cacao processing industry (1980): evolution, technology for production, location, size, lines of production, typology of industries, personnel employed, equity and earnings status, economic policy regarding cacao industrialization.
  • Market research: world market and Ecuadorian production forecasts

c. Project: proposing to improve cacao growing by renewing and rehabilitating plantations, totaling an area of 268,000 hectares, in the zones defined ecologically as “wet” and “dry”, located in the provinces of Los Ríos, Guayas, El Oro and Manabí.

The project was planned for five stages, over 20 years, the first studied at the feasibility level, including:
  • Characteristics of the Project
  • Goals, strategy and beneficiary selection
  • Components of the project’s first stage:
  • Components of production: renewal, rehabilitation, processing cacao, other crops, livestock, forestry, farm infrastructure, model farms
  • Production support services: technical assistance, extension, credit (policies and procedures), providing inputs
  • Marketing: quality standards, gathering centers, cacao marketing fund
  • Training technicians: approach, levels, methodology, field days, seminar-workshop, lectures
  • Project organization and administration: Implementing Unit, organizational structure, functions of the organization, functions of the National Development Bank, growers’ entity
  • Required personnel, vehicles, furniture and equipment
  • Investment amount and timing: overall cost, timing of costs and investments, accounting, auditing, etc.
  • Production, yields and costs
  • Economic and social benefits: financial analysis, economic analysis (indicators of profitability, sensitivity analysis)

ASTEC @ 2009