Policy brief No. 1. In recent years, food consumers have become in- creasingly aware of and concerned about the sa- fety of food products. As a response, public and private actors have introduced different standards to ensure that food safety reaches the degree de- manded by consumers. Developing countries often lack the institutional capacities and financial and non-financial resources to comply with standards.
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.
Rising demand for agricultural commodities coupled with population growth, climate change, declining soil fertility, environmental degradation and rural poverty in the developing world call for strategies to sustainably intensify agricultural production. Sustainable intensification refers to increasing production from the same area of land while reducing its negative environmental consequences.