Does Fermentation of Cocoa Beans Increase Farmers' Income? A Case Study Using a Nationwide Survey in Indonesia

Yuli HariyatiVina Yunita RiaRena Yunita RahmanIndah IbanahSetiyonoMuhammad Ghufron Rosyady

DOI 10.7160/aol.2026.180103
No 1/2026, March
pp. 29-42

Hariyati, Y., Ria, V. Y., Rahman, R. Y., Ibanah, I., Setiono and Rosyady, M. G. (2026) "Does Fermentation of Cocoa Beans Increase Farmers' Income? A Case Study Using a Nationwide Survey In Indonesia", AGRIS on-line Papers in Economics and Informatics, Vol. 18, No. 1, pp. 29-42. ISSN 1804-1930. DOI 10.7160/aol.2026.180103.

Abstract

This study evaluates the impact of cocoa bean fermentation on costs and revenues among cocoa farmers using Propensity Score Matching (PSM). The study used nationally-representative data of Indonesian cocoa farmers from the Indonesian Plantation Farm Household Survey 2014 comprised 23,189 farmers. The result shows that non-fermented cocoa bean farmers achieve higher production (1.04 kg/year) compared to fermented bean farmers (0.83 kg/year), a 26.27% increase. They also have higher revenue, earning $100.67 per year versus $84.42 for fermented bean farmers, a 19.25% increase. Additionally, non-fermented farmers exhibit higher farm value per hectare ($1,772.50 compared to $1,350.00). However, non-fermented farmers incur higher costs: seed costs ($7.19 vs. $5.58), labor costs ($329.05 vs. $295.25), and fertilizer costs ($39.95 vs. $36.46). Conversely, they have lower pesticide costs ($21.95 vs. $26.12). The findings indicate that while non-fermented cocoa beans result in higher production and revenue, they also come with higher input costs. Fermented cocoa farmers benefit from lower costs but achieve lower production and revenue, highlighting the trade-offs between fermentation practices and economic outcomes.

Keywords

Cocoa bean fermentation, Propensity Score Matching (PSM), non-fermented cocoa, fermented cocoa, input costs, economic outcomes

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