Cocoa is a crop grown largely by smallholder farmers in the lowland tropics, including parts of Latin America, West Africa, and Indonesia. Research suggests that it has the potential to provide biodiversity benefits when grown under certain shade conditions, especially when compared with alternative land uses. The primary literature on cocoa production reveals a range of objectives for improvement of cocoa production on small farms. These objectives are sometimes in direct opposition to each other, for example, increasing productivity through shade removal and chemical inputs, and the desire to increase biodiversity benefits. These opposing goals demonstrate some real trade-offs faced by cocoa producers. We summarize the current literature, drawing attention to some of these trade-offs and highlighting important ecological, economic, and social considerations. In considering strategies for ameliorating these negative tradeoffs, we make two primary policy recommendations. First, we suggest that outreach focusing on farm diversification may be the most effective way of optimizing ecological, economic, and social outcomes. Farm diversification may provide an effective means of achieving improved farmer security and dissuade farmers from abandoning or planting cocoa according to price fluctuations, thus reducing the use of new forest areas in cocoa production. Secondly, we suggest greater focus on determining effective economic incentives for maintaining shade in cocoa production. For example, price premiums associated high quality shade-grown cocoa may increase economic benefits while simultaneously providing incentives to farmers to maintain shade in production. Lastly, we identify some important areas of research for further informing policy in this arena.
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