Factors affecting production:
Return on investment - High returns from selling cocoa for little input will naturally cause more cocoa planting to take place. As a tree crop this affects long term production. In the short term higher returns encourage growers to apply more inputs such as fertilisers and pesticides which increases the yield. However, farmer prices are sometimes set by governments or can be influenced by internal market factors other than the world cocoa price.
Government schemes - The role of government in assisting growers is a leading factor in the grower's decision whether or not to plant cocoa. Assistance can take different forms, from assistance with setting up and rehabilitation to cheap loans. For example, in Indonesia in 1990 the government made available loans at low rates of interest for the establishment of plantations and many companies were tempted into cocoa growing. Extension services may also assist smallholders.
Alternative crops - Land suitable for cocoa is also able to support other crops. If cocoa has a low return for a long time, the farmer may switch to another commodity or food crop despite the costs of uprooting and replanting.
Pests, diseases, drought and floods - Pests and diseases, droughts and floods can destroy crops and make the decision to switch to another crop easier.
Yield - Yield depends on the age, type and planting distribution of trees and level of inputs needed. The balance between yield and input costs is important to the grower. For example, Malaysia had high yields of 700 kg per hectare but also had high costs of between 70 cents and $1.30 per kg.
Tree-stock characteristics - The production capability of the trees and their ability to resist disease are also an important factor in productivity. The grower with a large estate and more resources will naturally make more use of the most up-to-date planting material whereas the smallholder will depend on government extension services or neighbours. The age profile of tree-stock is also important when assessing potential production as yields will vary with age.
Environmental influences - The climate, soil, water supply, human actions and other environmental factors can also affect productivity.
Costs - A large part of the cost of establishment and maintenance of production is labour. The next major cost is inputs such as fertilisers and pesticides. Both these costs will vary with the size of the farm and the type of farming carried out. Financial success in setting up a cocoa farm depends on quick returns from the initial investment and increasing yields to cut unit costs.
Dand, R. The international cocoa trade. Woodhead Publishing Ltd, 1993
Some observations on the cocoa industry in Sarawak. Cocoa Growers' Bulletin, (50): pages 32-37, December 1996