|Biotechnology and the Future of World Agriculture (GRAIN, 1991)|
|Transforming the output|
The history of cocoa is fascinating. Perhaps no other agricultural commodity has travelled so much around the globe. In international trade, cocoa was a late starter, but now it is one of the most important agricultural commodities that the South trades with the North. Cacao is indigenous to the Amazon basin of South America, but the Spaniards also found it in Central America, where the Aztecs were using the bean in religious ceremonies. Until the early 19th century cacao consumption remained largely confined to Spaniards who at that time ate and drank a full one-third of the global production. Production was logically confined to the Spanish colonies in Latin America, notably Venezuela, which at the beginning of the 19th century accounted for half of global production. Somewhat later, the Portuguese started to plant cacao in Brazil, and only by the end of the 19th century did the French, Germans and British start planting it in their African colonies. This marked the beginning of a shift in production from Latin America to Africa. While in 1900 some 85% of world production came from Latin America, it was Africa which, by the 1960s, provided some 75% of the world's cocoa. (31)
The future looked bright for the African cocoa producers, as cocoa prices rose considerably from some $0.30 per pound in the 1960s (32) to the historic $1.72 in 1977. (33) A few African countries, notably Ivory Coast, Ghana, Cameroon and Nigeria, became heavily dependent on this single crop, and together these four countries provided 65% of global cocoa production. But golden years never last long. Encouraged by the high prices, countries in Latin America, especially Brazil, started planting massively and so did Malaysia on the other side of the globe. Between 1980 and 1987, Brazil increased its area planted with cocoa by over one-third, while Malaysia almost quadrupled its cocoa plantations in the same period. Of the African countries, only Ivory Coast managed to increase its acreage under cocoa. (34) Global production jumped from 1.4 billion tonnes in 1970 to some two billion in 1988, while consumption increased only marginally. (35) The chronic over-production resulted in steadily falling prices - often below the costs of production - and declining export incomes. Some important figures on world cocoa production and trade are given in Table 6.4. Graphs 6.3 and 6.4 show how world production of this crop has shifted during the 1970s and 1980s.
The figures indicate a tremendous shift of cocoa production away from Africa within the past two decades. Despite expansion of production in the Ivory Coast, Africa's share of global cocoa production dropped from 71% in 1970 to a projected 54% in 1990. Production is moving back to Latin America (Brazil), from where it came a century ago, but also into Asia (Malaysia) which increased its market share from virtually nothing in 1970 to some 12% by 1990.
This time, however, it is not the colonial landlords who decide from where the bulk of the production comes; at least, not in the straightforward way this happened in the 1 9th century. An increasingly important factor in who is able to reap the benefit this time is technology. While in the 1970s production increases were largely the result of area expansion, an increasingly important factor now is yield. Malaysia, for example, harvests almost twice as much cocoa from a hectare as does Brazil, and up to six time more than Ghana or Nigeria. One key to these differences is technology, especially the use of new hybrid varieties, fertilizer, pesticides and irrigation. The other key is scale: Malaysia, and to a somewhat lesser extent Brazil, produce much of their cocoa output on large plantations, while the African counterparts rely more on small, farmer-based production. (36) Much of the spectacular decline of Ghana's and Nigeria's share in the world's cocoa production is due to the fact that small farmers have not been able to incorporate new hybrids and other inputs into their production systems.
In Brazil, the gap between modernized plantations and the position of small farmers is especially apparent. Ninety per cent of Brazil's cocoa production comes from the Bahia province in the north-east, (37) where some 20,000 small farmers, using traditional trees, produce alongside modernized plantations which provide jobs for over 100,000 workers. (38) To expand cocoa production, Brazil started to set up new plantations in the 1970s. While the plantations boosted Brazil's total cocoa output, a decline in total production in the Bahia region is foreseen. (39) The modernization process brought about a tremendous concentration of land ownership and income, which led to many small cocoa farmers being pushed out of business and forced to work on the plantations. Between 1970 and 1980, the proportion of waged labourers versus small independent farmers in the region had doubled. (40) The collapse of cocoa prices in 1988 - the lowest for 14 years, with no signs of recovery (41) - will cost Brazil an expected $170 million in export earnings, but might also cost the livelihood of thousands of small, cocoa growers and farm workers in the Bahia region. (42)
On 30 March 1988, Bra Kanon, the Ivory Coast's Minister of Agriculture, responded to the cocoa crisis by announcing that his country would no longer develop new land for cocoa production but instead turn to extending coffee, palm-oil and rubber acreages. The largest cocoa producer in the world was losing one dollar on each kilogram of cocoa sold. (43) Kanon denounced industrialized countries for keeping cocoa prices down in search of 'exploitation, superexploitation, profit, superprofit'. (44) At about the same time, on the other side of the globe, however, an official from Kumpulan Guthrie announced it was substantially expanding its cocoa plantations. Kumpulan Guthrie is one of the Malaysia's largest plantation companies, controlling over 100,000 plantation hectares. The reason, according to a company official: 'our ability to compete from a position of strength in biotechnology'. (45)
Current biotechnology research relevant for cocoa can roughly be divided into two types. On the one hand, biotechnology is used to create higher yielding cocoa hybrids allowing developing countries to produce more of this precious commodity and the TNCs to get their raw material cheaper. On the other, dollars are poured into research to create high quality substitutes for cocoa-butter from other sources, resulting in a gradual elimination of the need to use cocoa beans for the production of chocolate.
Increasing the yield
Genetic research on cocoa has already resulted in the production of new hybrids which produce considerably more than the traditional trees. The enormous yield differences between Malaysian and Ghanaian cocoa trees are an indication of this. Traditional plant-breeding in cocoa is, however, extremely painstaking as it takes several years before the trees mature and are ready for crossing and back-crossing. Tissue culture could speed up this process enormously and, additionally, provide the basis for introducing genetic changes at the cellular level. Tissue culture would also hasten the dissemination of already existing superior cocoa varieties. Up to now scientists have not succeeded in developing tissue-culture techniques that can be used commercially, but those working on it are confident that this will be possible in the near future. (46) Hershey Foods has already filed a patent application at the European Patent Office in which it claims a method for the production of 'genetic carbon copies' of cocoa plants, using culture. (47)
Many of the most important TNCs processing cocoa are either conducting or funding biotechnology research in this area, including Hershey Foods (USA), Cadbury-Schweppes (UK), Nestle (Switzerland) and Mars Inc. (USA). These four companies are among the nine TNCs that control 80% of world production of chocolate and other cocoa products. (48) The interest of the cocoa processing TNCs is obvious. Now depending on a narrow range of cocoa-producing countries, and highly susceptible to weather conditions, diseases and political circumstances, TNCs are eager to find a stable supply of cocoa beans from well-run plantations. When commercially available, the result of tissue-culture techniques will undoubtedly be a further shift of cocoa production to large plantations, a process that has been taking place during the 1970s and 1980s, but which will be further intensified. Small farmers in Africa and Brazil's north-east will simply not have the means and inputs necessary for the new hybrids, as is already the case. Consequently, it will also enhance the current trend of a further decline in Africa's share of world cocoa production, as these countries do not have the infrastructure in place to cope with the new technology.
The hunt for substitutes
'There are many different kinds of chocolate but no matter how sweet or bitter it is an chocolate starts with cocoa beans.' (in an educational book for children) (49)
Biotechnology may mean that we have to change the stories we tell to our children. One angle from which cocoa is being attacked by biotechnology is in the production of cocoa-butter substitutes (CBS). The use of cocoa substitutes in chocolate and related products is not new, and certainly not limited to developments in biotechnology; but biotechnology promises to make a major contribution to the production of higher quality substitutes. Today, global production of CBS is some 200,000 tonnes, of which only 50,000 are of high quality. This roughly corresponds to half a million tonnes of cocoa beans, which is a quarter of world cocoa bean production. Interestingly, the main drive for cocoa substitutes comes not from the chocolate manufacturers, but rather from the edible oils industry; Unilever and Fuji Corp. are the world's largest CBS producers. (50) Both are using biotechnology to produce cocoa butter from cheaper oils, as do other foodprocessors. Table 6.5 lists the major actors in the hunt for substitutes. Depending on quality, CBS can come from the whole range of crops that produce oil-seeds, and even fish and whale oil are being used. The main bottleneck to further progress is the limitation of the currently used methods to isolate specific fractions from different oils for the CBS production. Improved enzyme techniques and genetic engineering of the fermentation microbes are, however, already resulting in giant leaps forward towards the successful imitation of cocoa.
Again, the main interest of the industry in conducting this type of research is obvious. The substitutes come from cheaper and more reliable sources. Oil-palm, producing the cheapest vegetable oil around, is a main candidate. But also the oils and fats of crowps that grow well in the North are being converted. Chang, working for USDA/ARS, reports work on cotton-seed and olive oil, (51) and in European patent applications safflower, sunflower, soybean and rape-seed are mentioned as possible competitors with cocoa. (52) But the research does not stop there. Apart from converting plant-produced vegetable oils, biotechnology also opens up ways for cocoa to be produced by micro-organisms - doing without plants altogether. Wessanen, a Dutch subsidiary company of the UK-based Berisford, has filed several patent applications in the Netherlands for a technique to produce cocoa-butter substitutes using different yeast strains. (53) CPC International, in the USA, holds a patent on a process to produce cocoa-butter substitutes with yeast. (54) Fuji Oil, in Japan, is developing techniques to do the same with other microbes. (55)
It will take some time, but slowly and quietly the world's main foodprocessors are making it possible to decrease the need for real cocoa beans for the production of chocolate and related products. Biotechnology is the key factor to this. Current legislation in different countries, specifying how much 'natural cocoa' should be in products called chocolate, is hardly seen as an impediment. Within the EEC, for example, these requirements are continually debated under strong lobby pressure from the chocolate and edible oils industries to liberalize them. (56) Whether the cheapest technique will finally be to obtain substitutes from yeasts, from bacteria, from cultured cells or from oil-seeds makes hardly any difference to the small cocoa farmers of Africa, Brazil, or anywhere in the developing world. With the large plantations stepping-up their production and the giant food companies looking for other raw materials, the current cocoa crisis seems far from over. In the past two decades, policy makers at the international level have tried four times to guarantee stable and reasonable prices in the context of the International Cocoa Agreement. None of the attempts really worked. Diverging interests of producer and consumer countries rendered most of the attempts useless even before the negotiations had started. Biotechnology is bound to complicate matters even more. Differentiated access to the technology within the producers' block is already resulting in different interests as well.