T

he government needs to introduce a new cocoa revitalization program to boost bigger output to meet growing demand from the domestic industry, a business group says.

The new project should focus on empowering growers as well as intensive counseling by experts, the Indonesia Cocoa Association (Askindo), an alliance of cocoa growers and exporters, said.

'€œInstead of introducing new seeds, the government needs to facilitate farmers to boost productivity'€ said Askindo chairman Zulhefi Sikumbang in a press briefing on Tuesday.

Counseling the farmers was crucial, particularly after their plants had aged seven years, when they were vulnerable to diseases due to density levels, he said.

Similar to palm oil and rubber, the life span of a cocoa plant is 30 years.

With the right focus, the program should run at least three years to help push up output to 1 million tons a year just by relying on existing plantations, according to Zulhefi.

Indonesia, the world'€™s third-biggest cocoa producer after the Ivory Coast and Ghana, has seen its annual productivity shrink from 800 kilogram per hectare before 2010 to only 300-350 kilograms per hectare at present. In 2009, the government launched a five-year revitalization program to markedly raise national output with an ambitious goal of 1.2 million tons by 2014, especially to ensure a stable supply for the fast-expanding local grinding industry.

Through the project, it carried out a wide-range of intensification, rehabilitation and rejuvenation activities covering an overall area of 450,000 hectares and prioritized the transfer of new seeds and fertilizers.

However, national output has yet to climb as expected and due to sizeable demand from the local grinding industry, which in past years has experienced robust growth, mainly thanks to export taxes on cocoa beans introduced in 2010.

The taxes, ranging between 5 and 10 percent, aim to retain the beans for the domestic grinding industry. The surging allocation of cocoa beans to domestic processors in recent years has helped push local firms to raise their capacities, while also inviting foreign investors such as Cargill and Barry Callebaut to enter the processing industry here, where consumption of cocoa per capita is still very low.

Indonesia would likely import up to 150,000 tons of cocoa beans this year, soaring by more than 300 percent from 40,000 tons last year, as production might plunge by 6 percent to 425,000 tons '€” its lowest level in eight years '€” due to bad weather, the association earlier said as quoted by Reuters.

Exports are expected to remain steady at around 125,000 tons, but may fall below 100,000 tons when Cargill starts grinding this year.

Local grinding capacity could reach 600,000 tons per year by 2014, the association said, adding that without major improvements in productivity, imports would soar above 100,000 tons on an annual basis by 2015.

In a separate development, Indonesia is scheduled to hold the sixth Indonesian International Cocoa Conference and Dinner in Nusa Dua, Bali, on May 15 and 16.

The conference would discuss, among other things, challenges and opportunities for smallholder cocoa farmers, said Bill Guyton, the president of the World Cocoa Foundation (WCF), which will co-host the events with Askindo.