production by low-cost producers such as the Côte d’Ivoire. Furthermore,
witches’ broom disease has devastated crops and greatly increased production
costs for Brazilian farmers because controlling the disease requires substantial
labor investments (FAS 1999). As profits plummeted, Bahian cocoa output
shrank by 60–70 percent. Some landowners have turned to destructive and
economically dubious alternatives such as cattle ranching or robusta coffee
farming. Others have abandoned their farms or even encouraged land occupa-
tion by subsistence farmers, hoping to accelerate deals and leverage more gen-
erous compensation packages under the agrarian reform program. Small-scale
subsistence farmers in turn survive on annual crops and use slash-and-burn
techniques that exacerbate forest destruction, fragmentation, and isolation.
Finally, many landowners are seeking to completely divest or consolidate
properties to raise capital for investment in remaining farms (Alger 1998).
One element of strategies to conserve Bahia’s biodiversity involves a con-
servation corridor in which cocoa agroforestry systems serve as biological links
between protected natural forest fragments (CABS and IESB 2000). However,
as with shade coffee farms, even the most diversified cocoa farms do not har-
bor the same biodiversity level as natural forest (see Chapter 10, this volume).
Moreover, because of constant disturbance of the understory through weeding
and other activities, the canopy maintained by cabruca may be transitory, lim-
iting long-term biodiversity benefits. Therefore, a vital component of conser-
vation strategy consists of efforts to preserve remaining forest fragments and
encourage forest restoration where feasible. Brazilian law requires that
landowners maintain at least 20 percent of their land in natural forest.
Although this law often is ignored in practice, members of the southern Bahia
farmer cooperative for organic products are required to respect this law and
maintain set-asides as reserves to obtain organic certification. The prospect of
organic premiums, combined with nongovernment and government programs
to train farmers, provide access to markets, and facilitate adoption of organic
cultivation methods, serves as a financial incentive to maintain set-asides.
However, just like conventional cocoa prices, organic price premiums are sub-
ject to market trends. As a form of insurance against market fluctuations, con-
servation concession payments can directly reward farmers for setting aside
portions of their land, such that compensation is based on conservation ser-
vices rather than the indirect channel of markets for certified products.
Conservation concessions could take the organic cabruca cocoa program a
step further by offering farmers additional compensation for setting aside
more than the minimum requirement of 20 percent. This would enhance the
attractiveness of the program to those who otherwise might not be able to
forgo the potential revenue from resource exploitation, expand farmers’ free-
dom to determine their optimal composition of income from cultivation and
conservation, and make set-asides a financially viable means of consolidating
144 II. The Ecological Economics of Agroforestry