Home-Grown Cocoa?

Sam Madell offers three reasons not to grow cocoa commercially in Australia

March 1, 2006

I am often asked whether the cocoa we sell is grown in Australia. It is not. Currently, all of our cocoa is grown in Vanuatu.
Although cocoa will grow in Australia, I urge people to ponder whether being able to grow something in Australia makes it a good idea.
As a student of agricultural science, I learned that you can grow just about anything, anywhere - as long as you have enough resources at your disposal.
Most of Australia is well south of the
world's optimum cocoa-growing region
- and the entire country is too dry
to grow cocoa without irrigation
It seems fair to assume that, in the past, cocoa hasn't been grown commercially in Australia for a good reason. Afterall, Cadbury alone imports thousands of tonnes of cocoa into Australia every year. So why doesn't Cadbury grow its own cocoa in Australia?
I'm here to suggest that growing cocoa in Australia is:
1. unnecessary;
2. a waste of precious water; and
3. unfair to Third World farmers who are already struggling to make a living from cocoa.

  1. Growing cocoa in Australia is unnecessary.
    As Tava's reputation for buying high quality cocoa at a fair price grows, we are increasingly approached by sellers from neighbouring countries including Vanuatu, the Solomon Islands and Samoa, asking us to buy their cocoa. We are offered far more good cocoa than we can currently buy.
  2. Growing cocoa in Australia is a waste of precious water.
    Cocoa is a thirsty crop; Australia is the driest inhabited continent on earth.
    Cocoa is at home in the wet tropics. The cocoa tree - Theobroma cacao - is native to equatorial Amazonia. The tree thrives in a relatively small temperature range of between 18 and 32ºC.
    Most of Australia is too cold for cocoa, while the areas that aren't too cold tend to be too hot. In Queensland (the Australian state earmarked for growing cocoa), only the northern tip (north of Mission Beach) meets the temperature requirements for growing cocoa. However, Craig Lemin [1], an expert on the subject of growing cocoa in Australia, has stated that "natural rainfall is inadequate for successful cocoa production" in Australia. Lemin concludes that "supplementary irrigation would be needed" to grow cocoa in Australia, and that the "total water requirements [are] likely to be significant".
    Today, just over 60% of Queensland is officially drought-declared [2]. Surely a state in drought can ill afford to waste water on an unnecessary new agricultural industry.
  3. Growing cocoa in Australia is unfair to Third World farmers who are already struggling to make a living from cocoa.
    I urge anybody who is interested in the question of "who should grow what" to research the theories of "comparative advantage" [3] and "the tragedy of the commons" [4].
    The economic theory of comparative advantage clearly illustrates that net increases can be achieved in world productivity (and thereby prosperity) when countries trade in commodities produced with comparative advantage. Comparative advantage boils down to each country exporting what they can produce most easily, and importing what their trading partner can produce most easily. In relation to growing cocoa, Australia's neighbours (Vanuatu, PNG, the Solomons, Samoa, Indonesia) have the comparative advantage.
    An Australian cocoa farmer might respond to the notion of comparative advantage by saying, "My business is not a charity. I can legally and profitably grow the cocoa that my business needs here in Australia, so I will continue to do so. It is not my concern if cocoa growers in a neighbouring country experience destitution as a result of diminished trade."
    The problem with this response is described in the phenomenon known as "the tragedy of the commons", which illustrates that people tend to be motivated by self-interest, to the detriment of society at large. As an example, I will use a simplified version of the relationship between Australia and Vanuatu.
    Vanuatu is a poor country, which receives tens of millions of dollars in aid money from Australia every year. Currently, Vanuatu exports cocoa to Australia. If Australia became self-sufficient in cocoa production, then cocoa imports from Vanuatu would cease. As a result, Vanuatu would earn less income. If Vanuatu's already low income fell, then Australia's aid contribution to Vanuatu would likely increase. In this scenario, the Australian cocoa farmer is effectively subsidised by the Australian tax payer. In other words, the Australian cocoa farmer would receive 100% of the profit from growing cocoa in Australia, while the burden of supporting the redundant farmers in Vanuatu is transferred to the Australian tax payer.
I have no doubt that Australians can conquer (or at least work around) all of the natural barriers to growing cocoa in Australia. But I have to ask: Why? And at what real cost? 

References:
The following internet references were accurate at the time of writing on 01/03/06.

The Cocoa Communiqué

Lang & Sam meet some cocoa growers in a remote part of Vanuatu

Three good reasons not to grow cocoa commercially in Australia

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