Policy brief No. 3. Adequate nutrition is a crucial welfare dimension. Malnutrition at a young age can have severe con- sequences for a person’s development of human, social, and economic capital. Also in later phases of one’s life, malnutrition can severely affect health and restrict productivity as well as overall quality of life. Efforts to improve nutrition among rural populations, for example through more diversified diets, are therefore key components of many rural development agendas, especially in Africa where undernutrition is still a large public health prob- lem.
We look at the trade-off between smallholder cocoa intensification and the ecosystem in Indonesia and investigate the determinants of environmental efficiency in cocoa production. In our analysis, we apply a distance output function that includes cocoa production and the abundance of native rainforest plants as outputs. Our data set, based on a household and environment survey conducted in 2015, allows us to analyze 208 cocoa producers with both measured and self-reported data. We find that the intensification of cocoa farms results in higher ecosystem degradation.