Macadamia Spp. in Guatemala
Agronomics, Organic Best Practices, and Start-up Costs for the
Establishment of Smallholders Plantations

Written by Michele Bruni and Fernando Cojulun

epven, Ltd.

 
 
 

CRS - Clif Bar & Company macadamia nut initiative in Guatemala

Guatemala and Italy, October 1st 2014
Table of Contents
I.   Agronomics ........................................................................................................................ 1  
A.  Introduction  ....................................................................................................................................................................  2  
B.  Summary  Crop  Development  ...................................................................................................................................  7  
C.  Crop  management  .........................................................................................................................................................  8  
II. Economics, opportunities and challenges ........................................................................... 14  
A.   Key  actors  ..................................................................................................................................................................  14  
B.  Opportunities  and  challenges  for  small-­‐scale  farmers  ..............................................................................  15  
C.  Economic  Analysis  .....................................................................................................................................................  18  
Annexes.................................................................................................................................... 22  
 This document describes the best agronomic conditions for Macadamia Spp. and
presents some opportunities for the Guatemalan context. The document is currently
in a draft format and will be completed upon validation of information found through
literature review with the interviews and field workshops.

Most of the cases analyzed from literature emerged out of Australian and Hawaiian
cases, and some from Costa Rica, as not much literature emerged out of Guatemala.
This highlights one of the core issues that the macadamia nut industry might be
facing in Guatemala, the relative weakness of the research and extension support
system to provide crop development and innovation services.
The references provided in this document will be provided in scientific format where
possible or through hyperlinks to the URL where the referred document can be found
to facilitate the use of the document to the CRS and Clif Bar initiative.

The report is structured as follows: Section I provides an overview of the agronomics

(description, ecology, soil, water, crop development, canopy and root system).
Section II highlights the authors’ main reflections on opportunities and challenges
specific to Guatemala. Section III contains quantitative information for the
establishment of orchards, including a cost structure. All the information in this
version will need to be validated with key informants and fieldwork.

I. Agronomics
Executive Summary of Key Element for Organic Plantations of Macadamia Spp.
Site Warm, semi-humid sub-tropical climate, can adapt to Mediterranean
climate with lower yields – Altitudes 1000-1900 meters above sea
level. Avg temp 20-25°C, day/night temp difference at least 8°C, for
blossoming night temp below 19°C. Similar conditions than avocado,
lemons, oranges – Annual rainfall of 1,500-2,500 mm – better
performance if year round. Under 1,000mm irrigation needed. Very
strong winds will break branches, strong winds reduce growth,
blossom and yield. Soils should be firm, pH 5.0-6.5 (optimum 5.5).
Heavy and badly structured soils to be avoided for the need of well-
drained soil to avoid phytophtora
Planting In systems that allow wind resistance, symmetric insulation of canopy,
appropriate drainage. Plants should be protected for the first year and
receive at least 40 liters water per plant per week. Soil can be covered
with leguminosae and mulched (5-10cm deep) with pruning residues
and other solutions starting at 20cm from trunk. When temperature
above 32°C young trees should be shaded. Wind live barriers can
should be provided 15 meters from orchard side with fast growing
trees. When planting hole should be around 50 x 50cm and filled with
a mix of compost and rock phosphate, animal manure can be applied
under the mulching.
Association with Well suited to cultivation on agro-forestry systems. Plantations can be
other plants established in combination with both forest trees as well as tree crops.
Annual crops between lines are possible in the growth years,
especially if soil enhancers as beans and other leguminosae, maize,
vegetables and herbs provide good results as well. Multi-layered
systems with coffee are possible, but local conditions should
assessed to avoid yield reduction and excess of water in soil favoring

Bruni & Cojulun, epven de Guatemala S.A.. 1

 fungi infestations. Association works well with pineapples, bananas,
maracuja, papaya and avocado (where they do not overshadow the
macadamia).
Nutrients and During first 4 years: year round animal manure and thick mulching.
organic After year 4, excess in animal manure can raise pH provide excess of
fertilization N and reduce available P. Nitrogen rich fertilizers, such as fresh dung
should not be applied during nut growth. Rock (basalt)-meal and
compost have harvested good results. Macadamia trees are
specialised in extracting nutrients directly from decomposing organic
substances within soils of low fertility, therefore mulching is extremely
helpful. Suitable mulch include, e.g. grass and covering plant
prunings, material stemming from tree trimmings, well-composted
pericarp, barnergrass, sugar cane bagasse, legume foliage, maize
and sorgo stalks, peanut shells and dung.

A. Introduction

The tree nut crop known as macadamia includes two. The macadamia crop is based
on cultivated species of the Protecaceae family that readily hybridize: Macadamia
integrifolia Maiden & Betche and Macadamia tetraphylla L.A.A Johnon. Historically
the M. integrifolia is the preferred species for the higher number of healthy nuts and
their more homogeneous caliber. Although hybrid cultivars are common in some
countries the nut industry relies heavily on M. tetraphylla.
Macadamia Spp. reproduction cycle prefers outcrossing
with a gametophytic particle self-incompatibility system
(Sedgley et al.) with pollination relying on bees and other
insects. Natural seed dispersal is thought to be via animals
and water and native populations are often concentrated
along waterways and in nearby open rocky areas,
underlying the importance in the area of origin of water
availability and underground drainage.

This Australian native tree from subtropical rainforest was

domesticated recently, and cultivated trees are very few generations from their wild
progenitors. A genomic understanding of the crop has the potential to deliver
massive genetic improvements to a worldwide industry and reveal the genetic
changes that have occurred throughout the domestication process. Although
macadamia ha subtropical natural origins, it appears to have wide climatic
adaptability and it is grown in many tropical regions. Current limitations to crop
production might be addressed through breeding, and thus benefit from genomics
assistance, run the full gamut from propagation, through tree growth and stress
resistance to yield and kernel quality (Hardner et al, 2007).

While it has been domesticated in mid XIX century in Australia, commercial

advances were in Hawaii in the late '20s brought its expansion to the market.
Cultivars of M. integrifolia from Hawaii dominate the industry, followed by M.
integrifolia hybrid cultivars developed in Australia. M. integrifolia appears to perform
better in tropical regions, while hybrids and M. tetraphylla prefer cooler regions.

Bruni & Cojulun, epven de Guatemala S.A.. 2

Stephenson (1990) has summarized the attributes of the principal Hawaiian and
Australian selections. Hawaiian cultivars of M. integrifolia were introduced in
Guatemala in the late ‘50s (Hawaii Agricultural Experiment Station - HAES 246, 333,
344, 508, 660); farmers are currently planting as well local varieties: G2, G4 and a
Costarican cultivar (CARO).

Ecology - Macadamias are ideally suited to a mild, frost-free climate with abundant
rainfall distributed throughout the year, roughly the same climate suitable for growing
coffee. Both species, however, grow well in the coastal areas of temperate latitudes,
although adaptability varies based on the cultivars. The ideal temperature for
macadamias is between 16 and 25 °C. Although the trees can survive when
temperatures drop below 3 °C, they should not be regarded as frost resistant and
young trees can be easily killed by light frosts. M. tetraphylla appears to be slightly
more cold-tolerant. Consistently high temperatures will reduce yields, although M.
tetraphylla shows more tolerance.

Macadamias do best in full sun, although in hot climates partial shade can be
beneficial. Windy locations should also be avoided. The brittle branches can be
damaged by wind, especially when laden with a heavy crop of nuts.

Macadamia adapts to altitudes up to 1,800 meters, although different sources

present different climatic thresholds and in Guatemala ANACAFE reports as good
conditions altitudes between 600m and 1,600m. Above 1,800 meters kernel
production will drop drastically with altitude increase.

Macadamia has an optimal rainfall of about 1,600-1,800mm rain per year, but can
still provide an acceptable production with rainfall >2,000 mm if soil is properly
drained.

Description - A tree up to 18 m tall (with M. Integrifolia normally taller) with a largely

spreading crown up to 15 m in diameter. The oblong to lanceolate, leathery leaves,
occurring in whorls of 3, are 10–30 cm long and 2–4 cm wide, irregularly spiny-
dentate when young, later with entire margin. Leaf stalks 5– 15 mm long. The
inflorescence is raceme borne in leaf corners (axillary), 10–30 cm long, bearing 100–
500 creamy white flowers in groups of 2–4, each about 12 mm long, with 4 sepals.
Fruit globose, 2.5–4 cm in diameter with one seed (nut) inside. Tree shape is
variable – umbrella, columnar, pyramidal or broad depending on cultivar, bark is
rough and brown. Roots are proteoid and it is this development which seems to
relate to the vigour of seedlings as they increase the surface area of the root system
for maximum nutrition absorption. Macadamia trees are moderately fast growing
ones in the first five years of life. They start bearing fruits towards the end of this
period and the length of the growth to maturity does not seem to affect the
production at a later age, while it is important to acknowledge that the environmental
conditions influence the maturation process. Similarly to other tree crops Macadamia
commonly expresses alternate bearing induced by both nutrient use and hormonal
flower inhibition. Location and variety specific crop management practices (i.e.:
pruning) can reduce the effect of alternate bearing.

Bruni & Cojulun, epven de Guatemala S.A.. 3

Growth   Habit - Macadamias are large, spreading evergreen trees reaching 30 to
40 ft. high and almost as wide. More upright types are known and being selected
because of their suitability for closer planting. The bark is rough but unfurrowed,
brown and dark red when cut. The macadamia has proteoid roots, dense clusters of
short lateral rootlets in well defined rows around the parent root axis. The prime
function of such roots appears to be in increasing the surface area of the root system
for maximum absorption. The vigor of seedlings appears to be related to the degree
of proteoid root development. In South Africa, Allan (1972, 1983), used thermal time
or day degrees identify regions suitable for macadamia production, sums above a
mean daily base air temperature of 12.8°C.

Foliage - The two species are fairly easily distinguished by their foliage. The leaves
of M. integrifolia are 8 to 11 inches in length and occur usually in whorls of 3. The
adult leaves are entire with few spines. New growth is pale green. The spiny, often
sessile leaves of M. tetraphylla usually appear in whorls of 4 and may grow to
20 inches long. The new growth is bronzy pink. Growth in mature trees of both
species occurs in two flushes, in spring and midsummer. In young trees four flushes
may occur.

Flowers - Flowers are borne on long narrow racemes arising from the axils of leaves
or the scars of fallen leaves. They may be borne on the new
growth if it is mature, but more often on the two, or three
season's growth preceding the most recently matured flushes.
The flowers, about 1/2 inch long, are perfect but incomplete in
that they have no petals, but four petaloid sepals. M.
integrifolia has creamy white flowers borne in clusters 6 to
12 inches long, while the flowers of M. tetraphylla are cream-
colored or pink and borne in clusters up to 15 inches long.
Macadamias can self-pollinate, although varieties vary from
being totally self-compatible to being almost self-sterile. Wind
pollination may play some role, but bees are apparently the
major agent in pollination. Cross-pollination has been shown
to increase nut set and quality.

Fruit - Macadamia nuts have a very hard seed coat enclosed in

a green husk that splits open as the nut matures. As the
common name indicates, this seed coat is smooth in the case
of M. integrifolia. It holds a creamy white kernel containing up to
80% oil and 4% sugar. When roasted it develops a uniform
color and texture. Although M. tetraphylla is often referred to as
the rough-shelled macadamia, the seed coat of some cultivars
is smooth, while others are rough and pebbled. The quality of
the kernels of M. tetraphylla is also more variable. The oil
content ranges from 65% to 75% and sugar content ranges
from 6% to 8%. These factors result in variable color and texture when the nuts are
roasted under the same conditions as those of M. integrifolia. M. tetraphylla is well
suited to the home garden, however, and has been planted for commercial
production in California.

Bruni & Cojulun, epven de Guatemala S.A.. 4

Roots - macadamia roots systems are often relatively shallow and spreading. dense
clusters of rootlets increase the surface area of the root system enhancing nutrient
and water absorption (Stephenson and Trochoulias, 1994). The presence of an
established legume ground cover has been associated with a higher proteoid root
length density than the recorded under bare soil, (Firth et al, 2003).

Genomics – (Mainly from Moore P.H., Delmer D., Ming R. (2008), Genomics of
Tropical Crop Plants, Springer) - The tree nut crop known as macadamia includes
two cultivated species that readily hybridize. This Australian native from subtropical
rainforest was domesticated recently, and cultivated trees are very few generations
from their wild progenitors. A genomic understanding of the crop has the potential to
deliver massive genetic improvements to a worldwide industry and reveal the genetic
changes that have occurred throughout the domestication process. Although
macadamia ha subtropical natural origins, it appears to have wide climatic
adaptability and is grown in many tropical regions. Current limitations to crop
production might be addressed through breeding, and thus benefit from genomics
assistance, run the full gamut from propagation, through tree growth and stress
resistance to yield and kernel quality (Hardner et al, 2007).
1. The macadamia crop is based on two members of the Protecaceae family:
Macadamia integrifolia Maiden & Betche and Macadamia tetraphylla L.A.A
Johnon. Historically the M. integrifolia is the preferred species, although
hybrid cultivars are common, and the industry in some countries relies heavily
on M. tetraphylla. M. prefers outcrossing with a gametophytic particle self-
incompatibility system (Sedgley et al.), and pollination relying on beed and
other insects. Natural seed dispersal is thought to be via animals and water
and native populations are often concentrated along waterways and in nearby
open rocky areas.
2. Domesticated in mid XIX century in Australia, but commercial advances in Hawaii
in the late '20s brought its expansion to the market. Cultivars of M. integrifolia
from Hawaii dominate the industry, followed by M. integrifolia hybrid cultivars
developed in Australia.
3. M. integrifolia appears to perform better in tropical regions, while hybrids and M.
tetraphylla prefer cooler regions. Stephenson (1990) has summarized the
attributes of the principal Hawai'ian and Australian selections.
4. Initially introduced varieties in Guatemala Hawai'ian varieties: 246, 333, 344, 508,
660; Farmer now planting local varieties: G2, G4 and CARO (Costa Rican
Variety)

Soil   and   water - Macadamias will perform on a wide range of soil types from open
sands and lava rock soils to heavy clay soils, as long as the soil is well drained. They
do best, however, in deep, rich soils with a pH of 5.5 to 6.5. Macadamias will not
tolerate soil or water with high salt concentrations. In areas with low annual rainfall,
leach the soil regularly.

Macadamia has physiological and morphological attributes that help to explain the
apparent tolerance to periodic dry conditions (as found in its native habitat) flowering
and oil accumulation stages are particularly sensitive to water stress. Yields tend to
be enhanced by irrigation in areas where relatively dry periods coincide with

Bruni & Cojulun, epven de Guatemala S.A.. 5

flowering and early nut development stages, but yield responses to irrigation
investments have been inconsistent, making it difficult to establish cause and effect
between irrigation and yield. Irrigation of mature trees is practiced in areas with
average annual rainfall < 1300mm. Macadamia nut trees can be grown on deep,
well-drained soils with a pH of 5.0-6.5 or on well-drained volcanic soils land that are
sufficiently weathered to support natural vegetation.

Phosphorus - Macadamia has shown to suffer from Phosphorus deficiency affecting

kernel quality and quantity. The plant has originally adapted through the
development of proteoid rootlets that increase tree efficiency in extracting P and are
not generally formed in case of P fertilizer application.

The most common Guatemalan soils for coffee

and Macadamia are Andisols, followed by
Inceptisols. Andisol and are able to fix high
quantities of phosphorus, through reaction of Al
ions with P ions. The high P-Retention (low
available P, especially compared with
Nicaraguan and Costariccan volcanic soils) of
the Andisols implies the continuous need for P
application, even though Andisols can release
the available P slowly (see table 1 below).

The need for P on perennial crops poses an

important sustainability challenge for the future
of Guatemalan Macadamia nut industry
as Global phosphorus (P) reserves are being depleted, with half-depletion estimated
to occur around 2033. Similarly to most of Australian and South African plantation
macadamia plantations are currently relying on non-renewable phosphorus
applications1. The research has shown that there is a need to develop crops that are
highly effective at acquiring inorganic P (Pi) from P-sorbing soils. Traits such as
those found in non-mycorrhizal root-cluster-bearing species in Australia, South Africa
and other P-impoverished environments are highly desirable for future crops. Root
clusters combine a specialized structure with a specialized metabolism. Native
species with such traits could be domesticated or crossed with existing crop
species. New discoveries of the development and functioning of root clusters in both
monocotyledonous and dicotyledonous families are essential to produce new crops
with superior P-acquisition traits and this is going to be fundamental for the economic
and agronomic future of long-term investments in macadamia nut plantations. In
addition the utilization of microorganisms to increase the availability of P in soil
therefore is an attractive proposition for developing a more sustainable
agriculture. The additional advantage of microorganism inoculants resides in the
slowest and more constant release of available N, reducing the risk of branches
flushes associated with wind related risks. This mechanisms is intimately related with

                                                                                                               
1  Research (HANS LAMBERS, MICHAEL W. SHANE, MICHAEL D. CRAMER, STUART J. PEARSE, and ERIK J.
VENEKLAAS Root Structure and Functioning for Efficient Acquisition of Phosphorus: Matching Morphological and
Physiological TraitsAnn Bot (October 2006) 98 (4): 693-713 first published online June 12, 2006 doi:10.1093/aob/mcl114)  

Bruni & Cojulun, epven de Guatemala S.A.. 6

the phosphorus cycles related to high organic matter, in fact a high organic matter
fraction would buffer changes in pH and reduce the amount of fixated P.
More sustainable, P-efficient cropping systems are urgently needed, and knowledge
about native plant physiology in ancient landscapes may guide us toward their
development, either through directing the breeding or engineering of existing major
crop species or through aiding the development as crops of species that originate
from these P-impoverished landscapes2. In non P-impoverished soil, one important
strategy might reside in testing mycorrhized plants to increase N absorption and
reduce (for competition and establishment of a more stable roots' ecosystem) the
emergence of pathogens, in particular fungi. In P-impoverished soils, the use of
mycorrizae, for their "scavenger" strategy, can be less effective in extracting
phosphorus, but it has shown to reduce the formation of proteoid rootlets less than
inorgranic P fertilization.

Nitrogen - A recent study (Fletcher A., Rennenberg H. and Schmidt S. (2009)

Nitrogen partitioning in orchard-grown Macadamia integrifolia, Plant Physiology,
Oxford University Press) highlights how excess Nitrogen might be an issue for
growing nuts. The study provides evidence that N supply to developing nuts is not a
primary cause for nut abscission, supporting the notion that high N fertilizer
application rates do not improve nut retention. Research suggests that current
orchard design and hedging practices should be reviewed in context of the role of
outer canopy leaves as a source of N for reproductive tissues. This is important as
excess of fertilization might let the canopy flush in directions and shapes that might
leave the tree more exposed to wind risk.

B. Summary Crop Development

1 - Vegetative growth occurs in a series of flushes
2- Variation of light intensity within canopy can lead to uneven distribution of the fruit:
50% of flowers are produced in canopy areas exposed to only 9% of the full sunlight
3 - Mild water stress suppresses vegetative growth, but after re-watering a large
flush can compensate for previous loss.
4 - Daytime temperatures in excess of about 30°C can be damaging. The minimum
mean air temperature for the growth is about 12-13°C, but the optimal is about 25°C
5 - Less is known about the response of macadamia trees to atmospheric humidity
(saturation deficit): no thresholds values have been specified
6 - Depending on location there can be unto three discernible flowering peaks
7 - Although a single tree can produce more than 10000 inflorescences, only 5-10%
of the flowers might set fruit and as few as 0.3% reaching maturity
8 - Root system relatively shallow and spreading. undamaged root can extend to a
depth >1.2m, while a dense mat of fibrous roots occupies the top 0.40 m of soil. It
can extend over 2 times the canopy area.
9 - Clusters of rootlets increase the surface area of the root system, and do not

                                                                                                               
2
(Ryan et al., 2009;Pang et al., 2010a, 2010b; Suriyagoda et al., 2010; Bell et al., 2011)

Bruni & Cojulun, epven de Guatemala S.A.. 7

generate problems in interacting with other recommended intercropped shrubs.
10 - roots can represent 28% of the total plant biomass.
11 - Photosysntesis is depressed at air temperature >30°C

C. Crop management
Propagation  and  planting  - Macadamias are easily grown from seed, but the seedlings
may take 8 to 12 years to bear a crop and the quality of the nuts is unpredictable.
Macadamia tree is usually propagated by grafting M. integrifolia onto seedling
rootstock of M. inegrifolia or M. tetraphylla. Seelings of hybrids and cuttings are also
used. Growth occurs in a series of vegetative flushes. M. integrifolia leaves are
arranged in whorls of three, with three buds in the axil of each leaf. Multiple branches
may therefore be produced at every node. The most used rootstock varieties are H2
and Beaumont. Rootstock varieties have demonstrated to have a lower impact on
yield than scion varieties. The wood of macadamia is hard, however, requiring the
propagator to have experience to be successful. The
scionwood is girdled some 6 to 8 weeks beforehand,
the preferred wood being healthy mature material of
the previous flush. The recommended graft is the
simple whip, using material 3/8 to 5/8 inch thick. The
side graft is also successful, and tip, wedge or cleft
grafting is used under greenhouse conditions for
working small seedlings up to 1 ft. high. Budding is
also possible as well as propagation from softwood
cutting and air-layering. Cutting-grown trees take
some time to develop an adequate root system and will need staking when young.
Some grafted varieties of macadamias begin bearing within 2 years, while others not
for 7 to 8 years, depending on quality of grafting, soil and roots/rootlets development
and varieties. A guide for nursery operations can be found at
http://www.agrimac.com.au/files/nursery%20operations.pdf Training of seedlings is
fundamental from the nursery to develop a strong central leader.
Planting density depends on varieties, topography and future economic and
management systems. Close plantings such as 7 m x 4 m have higher establishment
costs but reach an earlier positive cash flow. Higher
densities require pruning earlier in the orchard's life in
case of the need for machinery access. Wider spacing,
such as 10 m x 5 m may be easier to manage as they will
require pruning later and might be more adapt to smaller
operations. Planting density in Guatemala has evolved
over the last few years to achieve a higher plantation
density from 15 x 8, 10 x 8 (meters) to 10 x 4, 15 x 4
(meters), this is mainly due to intercropping with Arabica
coffee. It is highly recommended to plant north-south in case topography allows it to
increase a symmetric irradiation of the canopy and to plant windbreaks (one to three
rows) to reduce wind risk. Planting should be carried out towards the end of the dry
season, not in the hotter time of the day and requires watering the transplanted
material. Interplanting with two cultivars, can improve yield through cross-pollination.
Beehives near the orchard can generate additional revenue through honey

Bruni & Cojulun, epven de Guatemala S.A.. 8

production, while supporting the desired inter-pollination.

After transplanting the trees should be protected with cardboard or plastic tree guard.
The guard should be left in place for at least 12 months to protect trees from
application of chemicals (in case of conventional crop management) and avoid
sunburn. Suckers emerging out below the grafting should be removed 3 to 4 times a
year. During dry seasons (year 1 to 4) trees are recommended to receive 40 liters of
water per plant per week in case of prolonged dry season.

Pruning  and  training - Pruning and training are needed during the first three years after
planting in order to produce a conical-shaped tree with a strong vertical central
leader and scaffold horizontal branches starting at 3 ft. above the ground and from
there at intervals of about 1-1/2 ft. In M. integrifolia there are 3 buds in a vertical row
in each of the three leaf axils of a node. When the stem is topped, all three upper
buds will grow straight up. Only one of them must be allowed to remain and to
continue the main stem, the other two being clipped off to a stub of about 3/8 inch.
Now the buds below those two stubs will grow out in a more or less horizontal
direction. Only these branches will flower and fruit. This process is repeated until a
good framework has been established. Cultivars differ considerably in the shape and
structures of the canopy might make the plant susceptible to wind
damages. Hedging after the harvest and annual pruning to mitigate alternate
bearing should be applied. The pruned material can be generally used as mulching
under the trees. Canopy management can intensify after year 10 to preserve shape
and reduce wind related risks, as well as to allow the transit of mechanic machinery
in case they are used on the orchard. Studies in Queensland have demonstrated a
linear relationship between nut yield per tree and the surface area of the leaf canopy
(Bell and Bell, 1983; Russel, 1985).

Intercropping - Macadamia has demonstrated to be well suited to cultivation on agro-

forestry systems. Plantations can be established in combination with both forest
trees as well as tree crops. Annual crops between lines are possible in the growth
years, especially if soil enhancers as beans and other leguminosae, maize,
vegetables and herbs provide good results as well. Multi-layered systems with coffee
are possible, but local conditions should be assessed to avoid yield reduction and
excess of water in soil favoring fungi infestations. No specific studies conducted in
Guatemala could be found. An research conducted by the Department of
Environment of the Kenyatta University (Kenya)3 on the effect of intercropping has
indicated: “Intercropping coffee with fruit trees significantly depressed coffee yields to
sole coffee but gave higher Percentage (%) grade A, with mangoes being
significantly higher. Intercropping coffee with guavas significantly depressed soil
moisture content, organic matter, Potassium and Calcium, coffee yields and
percentage grade A. The study concludes that intercropping coffee with fruit trees
depressed coffee PAR (photosynthetic active radiation) and coffee yields but
improved on percentage (%) grade A and soil nutrients. Intercropping coffee with
avocados, mangoes and macadamia ameliorated the leaf temperatures to near
optimum required during the two distinctive seasons (June 2010 and February 2011).
                                                                                                               
3  http://ir-­‐library.ku.ac.ke/handle/123456789/9034    

Bruni & Cojulun, epven de Guatemala S.A.. 9

Both eco-physiological and soil factors improved with distance from the tree. In this
regard the study recommends that coffee can be intercropped with avocados,
macadamia and mangoes at a distance longer than the study distance used (2.74 x
2.74 meters). For this practice to succeed all agronomic practices for both coffee and
the fruit trees must adhered to recommendations. The mango intercrops led to
significantly higher yields than all other fruit trees except the macadamia which was
low but not significantly different. The study results indicated that coffee intercropped
with macadamia exhibited significantly higher calcium and magnesium levels than all
other intercrops at 2.74m top soil”.

Association tests carried out in Latin America (Costa Rica – interviews and
background papers) worked well with pineapples, bananas, maracuja, papaya and
avocado (where they do not overshadow the macadamia) in intercropping with coffee
several researches (Carr et al.) show that water conservation pits and other
techniques to increase soil water storage capacity are needed at planting (to
preserve adequate reserves in during dry season – but needs to be assessed on
location specific conditions). However, studies about intercropping of coffee with
macadamia trees (Macadamia integrifolia Maiden & Betche) are almost nonexistent.
Few studies (
https://scisoc.confex.com/crops/2013am/webprogram/Paper79524.html )
evaluated the growth and yield of Arabica coffee (cv. Obatã - IAC 1669-20) and
macadamia trees. Macadamia trees reached a higher growth and accelerated
production when intercropped with coffee trees and under irrigation. The macadamia
nut production and quality were benefited by intercropping and irrigation, while
almond yield under irrigated intercropping ranked 27%, 133% and 251% above
irrigated sole cropping, rainfed intercropping, and rainfed sole cropping, respectively.
On the average, coffee production ranked 60% higher under irrigation, but was not
influenced by intercropping in such condition. In rainfed condition, intercropping
increased coffee yield by 10%. Conventional production of macadamia is carried out
mainly on large plantations.
These sites have been adapted to maximize mechanization and yield, and
experience problems when being converted to organic cultivation. In less
industrialized countries, the intensive use of machines is usually not worth it. Use of
manual labor allows the plantation to be run more flexibly, and better adapted to the
site conditions, as no allowance need to be made access by machines. The rows
can then be planted along the contour lines, whilst manual harvesting allows thicker
mulching layers to be applied.

From several interaction with ANACAFE and MAGA agronomists emerged that
Macadamia can be associated with coffee both as a coffee shading crop as well as
planted in more complex agroforestry systems at 180 trees/ha density.

Macadamia is well-suite to cultivation on agro forestry systems. Several plantations

in Africa (Kenya, Tanzania, Malawi) have been successful by also cultivating coffee
in multi-layer systems, as well as in central and Latin America (Columbia,
Guatemala, Bolivia). The local conditions need to be considered when setting the
distances between the plants, so that fungi infestations are not stimulated by too wet
conditions in the crop. In New Zealand and Australia, plantations have been

Bruni & Cojulun, epven de Guatemala S.A.. 10

established in combination with forest trees. The combination of macadamia with
Paulownia has produced good results; certain eucalyptus varieties are aggressively
competitive towards macadamia. During the first few years, annual crops can be
planted between the macadamia-rows, such as manioc, maize, beans, vegetables
and herbs. If this is to be carried on after the first 10 years, then the distances
between the macadamia-rows must be accordingly large. Perennial crops are also
suitable, such as pineapples, bananas, coffee, maracuja, papaya and avocado (the
latter should not overshadow the macadamia, though). In agro forestry systems, care
must be taken that the varieties of tree that are to provide shade for the macadamia
are deciduous. Non-deciduous trees will need to be cut back before the blossom and
fruiting periods, to provide enough light. Principally, as many of the local varieties as
possible should be integrated into the cultivation system.

Arachis pintoi is a good, perennial soil coverer, tolerant of shade, yet it will attract
rats lured to the peanuts it produces. Lotus pendunculatus (Maku Lotus) has shown
good results in tests, although it takes two years to establish. It also needs to be
mown before harvesting due to its upright growth. Other suitable legumes include
lucerne, lupines, Crotalaria spp. and Desmodium spp. An inoculation of legume
seeds with the appropriate rhizobium is recommended, to ensure rapid nodulation
and nitrogen fixation.

Fertilization - Since macadamias grow slowly, they do not require large quantities of
nitrogen fertilizer. Six months after planting out the trees should receive light
applications of a balanced fertilizer such as a citrus mix or fish emulsion, which
contains no more than 1% nitrogen. Applications should be made twice a year, but
mycorrizae and leguminosae soil coverage can reduce the need for N applications
and support a more stable provision of nitrogen, reducing the risk of flushes that can
increase wind related risks. A mature tree should receive approximately 5 pounds of
citrus mix per application and young trees proportionally less. Too much nitrogen
may result in chlorosis. Micronutrient deficiencies are common in some areas, but
are normally less frequent when correct organic soil management is practiced. As
mentioned in the soil and water section specific strategies for phosphorus should be
assessed for low available P soils such as Guatemalan Andisols and Inceptisols.

Irrigation  - Irrigation of mature trees is practiced in areas with average annual rainfall
< 1300mm. Both drip and sprinklers are suitable methods for applying water, even if
fungi diseases might be harder to control when sprinkler irrigation is practiced.
Macadamias can withstand periods of drought, but the harvests will be small and of
low quality. Irrigation seems to be more important during certain critical periods in the
crop cycle, particularly from the time of nut set, through nut filling and through the
vegetative growth period. The trees can be compared with the water need of the
avocado tree. The actual amount depends on the soil. Young trees also have higher
water requirements than mature trees.

Bruni & Cojulun, epven de Guatemala S.A.. 11

Harvesting - Macadamia nuts are harvested manually after they have fallen. Large-
scale producers also employ mechanical sweepers and pickup devices on relatively
even land to offset the cost of agricultural labor. Nuts should be harvested at least
every four weeks when the weather is rainy and less often in dry weather. This is to
prevent losses from mold, germination, and animal damage. Mature macadamia
nuts will fall to the ground from late fall to spring. It is best to harvest fallen nuts,
since shaking the trees to dislodge the nuts may also bring down immature nuts. A
long pole can be used to carefully knock down mature nuts that are out of reach. A
reasonably good tree will produce 15-20Kg of nuts at 10 years age and gradually
increase for many years.

Diseases - In relation to other types of trees, macadamia is affected by only few

serious diseases. Viruses play no role, and bacteria only a small one. The choice of
the cultivation site plays a large part in preventing an infestation by fungi. Most of the
pathogenic fungi for Macadamia thrive in wet conditions, have rapid life cycle and
infects multiple plants, the most aggressive are from the Phytophtora genus: P.
capsici, P. tropicalis, P. palmivora, P. cinnamomi. More in details:
• Macadamia root rot - Kretzschmaria clavis
• Trunk canker - Phytophthora cinnamomi
• Dieback or slow decline - disease infection in trunk or root, prolonged drought,
anaerobic conditions caused by compaction or poor drainage, poor root
structure caused by planting root bound trees, toxic chemicals from herbicides
or overapplication or uneven application of fertilizers, or nutritional problems
• Macadamia quick decline (MQD) - unknown stress factors (Waterlogged soil,
low pH, nutritional problems, and fungal and stem rots are suspected stress
factors with ambrosia beetle attacks hastening the tree decline. The fungi
Xylaria and Nectria are frequently associated with MQD.)
• Flower blights - Phytophtora capsici or Botrytis cinerea with Cladosporium
usually secondary or affecting raceme tips
The most aggressive and wide-spread in Guatemala are the Phytophtora and the
Rosellinia. Key practices to prevent the spread of these fungi infections are:
• Disease free planting materials (need for soil sterilization and inoculation for

Bruni & Cojulun, epven de Guatemala S.A.. 12

 seedlings reproduction)
• Proper grafting management and grafting materials and tools disinfection
• Maintaining healthy soil and root system
• Monitoring roots and soil health
The most effective way of treating and preventing the disease is using a holistic
approach. The combination of 2 or more cultural, rootstock and biological tactics has
demonstrated to be the most effective way of supporting the suppression of the
disease. Among the best practices for prevention:
• guaranteeing good drainage
• applying Ca++ that promotes roots resistance, acts as a mild fungicide and
improves soil aeration or
• applying organic amendments such as woody mulch (C:N 25-100:1), compost
and green manure.
To foster disease tolerance and suppressivity two main strategies can be deployed:
• evaluating clonal and seedling rootstock for resistance, health and disease
suppressivity
• application of compost inoculated with Trichoderma that has proven increased
diseases suppressiveness

Table 1 – Fungi infestations, preventive and combative organic measures

Source: Naturaland, 2000

Pests - Occasionally, thrips, mites and scale may be troublesome, and anthracnose
can infect leaves and nuts in humid climates. Canker can also result from wounds to
the tree. The roots of the macadamia do not appear to be very attractive to gophers,
but deer will browse on the new foliage.

Bruni & Cojulun, epven de Guatemala S.A.. 13

Table 2 –Insects that can become pests of Macadamia plantations

Source: Naturaland, 2000

II.  Economics,  opportunities  and  challenges    

A. Key actors
Producers (contacted or visited): 15 groups (see Annex)
Producers groups were assessed (based on interviews, workshops, focus groups
and observation) with a traffic light system along five dimensions: (i) capacities (ii),
long term plans (iii), perceptions of organic production (iv) Potential for ops scale-up
(v) integration into a formal value chain. An overall value was assigned based on a
higher weight for ops scale up and integration in value chain. Details in Annex 3.

Processors and others

Role Name Contact
Processor Guatemala CALZADA ROOSEVELT COLONIA COTIO 619,
macadamia Gourmet ZONA GUATEMALA.
oil/exporter
Processor Industria MACADAMIA, S.A. DIAGONAL
macadamia Guatemalteca 6, 1065
oil/exporter de Macadamia ZONA 10 CENTRO GERENCIAL LAS MARGA
(Mayan Gold) RITAS, NIVEL 14 – tel 23865700
Processor Extract SA 24 AVENIDA CALZADA ATANACIO TZUL 4285
macadamia ZONA 12
oil/exporter
Processor Vegetal Extracts RUTA 7 642
ZONA 4 OFIC 301 GUATEMALA

Bruni & Cojulun, epven de Guatemala S.A.. 14

macadamia SA
oil/exporter
Processor/exporter Plantaciones 77725261 – 2 calle 8-94 zona 1
nuez del
Pacifico SA
Processor/Exporter JI Cohen KM. 14, CALZ. ROOSELVETH 619
MIXCO GU GUATEMALA

Processor/exporter Swiss Gourmet KM 19.5 CARRETERA PANAMERICANA,

BODEGA 9, ECOBODEGAS LOTE 7, MIXCO
Certifiers OCIA Regina Cosenza – rcosenzaz@gmail.com
International
Certifiers Mayacert Noe Rivera - 52082266
(merging with
BCS)
Certifiers BCS (merging http://www.bcs-oeko.com/sp_bcs_servicios.html
with Mayacert)
Organic regulator CNAE 7 av 12-90 zona 13 Guatemala, 2413-7478
Certifiers IMO Control http://imo-la.com/
Certifiers Control Union http://www.controlunion.com/en/certifications
Certification
Certifiers ECO-LOGICA http://www.eco-logica.com/
SA
Certifiers NATURLAND http://www.naturland.de/certification.html
Certifiers ECOCERT http://www.ecocert.com/es
Nurseries Vivero Botanik 24731941

B. Opportunities and challenges for small-scale farmers

Macadamia is perceived as an opportunity by many of the groups interviewed during
the month of September 2014, especially for the potential of intercropping with
coffee, which in the last decades has been hit in waves by diseases (such as
Hemileia Vastatrix – “Roya”) and prices fluctuations.

The Macadamia appears well adapted to many of theregions where bananas and
coffee are produced, nevertheless several groups have reported low yields,
especially when they shifted to organic. From the literature review and from epven
expertise, most of the issues with low productivity are an effect of less than optimal
application of best practices for organic tree farming. The low capacities are to be
related to a low level of applied research available globally and, even more so, in
Guatemala on the crop management of organic Macadamia.

Most of the producers interviewed feel strongly that they need four-five years to
recover and improve yields when transitioning to organic. Most producer leaders
reported “a fight against the chemical companies” that try to convince them to use
synthetic products, while they feel that the organic production benefits their
landscape, water catchments, use of organic solid waste (reducing cost). Most of
them reported that their boards have already ruled to go organic and that they

Bruni & Cojulun, epven de Guatemala S.A.. 15

consider organic communities are “cleaner” and will be able to attract more
community tourism.

Box 1 – Market asymmetries in value chain

“Pueblo chico, infierno grande”

The Nueva Alianza group of 40 producers with 135ha of planted Macadamia on land reclaimed
after the peace agreements started receiving support from AgExport around 2008. They were
supported to transform their association in a Sociedad Anonima with the objective of direct export
and market linkages (encadenamientos) to the US market. When in 2010 the first shipment
reached the port, it was embargoed as they did not have any processing or export permit. The
following year they report they started selling to CJ COHEN to supply ClifBar (as they reported a
visit of ClifBar staff in 2012). The agreement (verbal) with CJ COHEN worked well for two years,
then in 2013 they were told the global price dropped and the buyer could offer only 60% of the
previous year. A coyote got into the picture, offering 25% more price for the product. The coyote
reported to have sold the product to the same buyer. The new arrangements resulted in conflict
within the community that ended splitting businesses and productive and value addition assets,
with the final result of not carrying out any value addition and finding themselves vulnerable and
with almost no support. Where the value chain could have leveraged an incredible productive and
value addition potential ended up generating frustration and missed opportunities related to lack
of transparency and coordination along the chain.

Almost all interviewed groups did not show

a clear understanding of their cost
structure, volumes, weights and prices they
receive, nevertheless they consider the
Macadamia important as it is additional
revenues compared to the coffee and
banana only, and many of them reported to
have made artisanal value addition for local
markets. Farmers reported as well that
technical assistants from MAGA don’t have
any specific knowledge or capacity on
Macadamia.

From a varietal point of view most groups

report they have been using 333 and 508
(HAES) varieties.
Farmers would need expertise to support
the adoption of best practices that would
reduce issues such as wind break,
alternate bearing, fungi attack, and this can
be managed with fairly low-cost, non-
synthetic technologies. A clear example is
the wind damages suffered by over
100,000 trees in January 2008, mainly due to the absence of windbreaks and
opportune pruning and training systems.

Bruni & Cojulun, epven de Guatemala S.A.. 16

Another challenge that is and can be faced by producers in the future is the
management of plant nutrition, as some intrinsic characteristics of the soil, Andisols
and Inceptisols, can reduce the most effective phosphorus absorption, reducing the
kernel yield.

A broader introduction of the crop with smallholders would require, as demonstrated

as well by the economic assessment (carried out and presented below), investment
to cover the cost of the orchard start-up, technical assistance to support the growth
of producers’ capacities, and potentially support to the implementation of best
practices in nurseries and planting. These practices have demonstrated the ability to
harness better long-term results on the tree’s yields seven or eight years after the
grafting.

One weakness of the chain that emerged out of the interviews with farmers is how
recommendations not aligned with globally recognized best practices are given to
smallholders by bigger producers. A clear example of this emerged with several
groups in the boca costa of the Quetzaltenango Department. Several producers have
been: planting trees of 1 year, increasing the replanting needed; have avoided
grafting planting less than optimal material; have not managed distance in planning.
These choices are reported to be based on conversations with bigger producers
from the Sacatepéquez Department, choices that the same advisors are not
apparently implementing in their operations.

Few associations and organizations have the capacity to carry out value addition,
moreover the thinness of the market (with only two processors in the country)
generate a wider set of issues. Some level of value addition (nurseries, composting
units, post-harvest handling facilities) at orchard level, for example, would allow
producers to:
(i) maintain at community level more organic matter (the husks) that can be used as
fuel, composting material or mulching material; (ii) increase the revenue stream for
the farming communities, (iii) allow some level of product diversification for the local
market, and (iv) reduce the transportation cost and carbon footprint by transporting
less volume for the same weight.

Macadamia aligns well with the “landscape” vision of smallholders that are often
managing complex agroforestry systems. The intercropping with coffee, the potential
of having crops between rows before the bearing starts, the options for associating
with more tree crops and shade crops, and the opportunity of having good to
excellent honey productions in a Macadamia system (with mutual benefits for the
higher cross-pollination and the high availability of nectar from the abundant
Macadamia blossom) present an excellent opportunity for working on sustainability in
an integral manner, working at landscape level.

While a complex system like the one highlighted above can surely pose some
challenges in implementation, would as well constitute a valid example for a

Bruni & Cojulun, epven de Guatemala S.A.. 17

productive landscape and watershed management, increasing both the amount and
the quality of the environmental services produced by a smallholder-managed
agroforestry systems. This might be an important bet for a future of increased
uncertainty, in which the level of natural resources and environmental services could
determine the degree of resilience to shocks and might have (one day) a market.

C. Economic Analysis
Three type of analytical tools have been used to draw estimates of cost and break
even:
(i) A gross revenue model based on the economic model developed by the
University of Hawaii (developed for conventional crop) and feeding it with
organic best practices operations (as found in literature) and the cost for the
same operations collected from direct sources in Guatemala. The model has
then been summarized to provide a snapshot of the gross margin for one year
of production. The model developed is considered quite conservative in terms
of costs, product price (no premium has been attributed to the organic
product, and yield (it is based on the application of all best practices for
organic, while keeping the productivity around the average).
(ii) A basic cost structure for organic certification based on the information
provided by certifiers.
(iii) A DCF (discounted cash flow) model for the start-up of a ten hectares orchard.
The model has been developed for this purpose by epven and structured
around ten hectares to reach a minimum viable economic scale for the
orchard and to reflect a small producer group that would share some costs.
The DCF does not reflect labor has revenue to the community, but as a cost to
the start-up of the orchard, it is therefore quite conservative in terms of
economic results. The DCF model considers all costs as explicit, with inputs
purchased on the market. In addition it assign a fairly high discount rate based
on both operational and financial risk in Guatemala. The DCF includes all the
costs for organic certification.

Gross  Revenue  Model  Estimation  (per  hectare)  

The model is annexed in excel format and data can be modified based on changing
assumptions. The estimation of the crop cost model has been made under the
following assumption:
Yield: 22kg/tree
Density: 180 trees/ha (relevant for intercropping with coffee)
Product: Nut In Husk
Price at farm gate: 5.50 GTQ/Kg – 0.72 USD/Kg
Average cost of money: 14.5%year
Labor cost 60 GTQ/day – 7.88 USD/day
Fertilization 1800 Kg/ha compost (C:N 25-100:1)
20 hr/ha
Mulching 45 hr/ha with pruning and other locally available materials
Cleaning 30 hr/ha fire and weed prevention
Rat baits 10 Kg/ha
Organic pest control 1,200 GTQ/ha – 158 USD/ha
Pruning ops 96 hr/ha
Harvesting capacity 80 kg/person/day - manual
Mangement and overhead 8%

Bruni & Cojulun, epven de Guatemala S.A.. 18

Summary

The gross revenue model for one hectare suggests a total pre-harvest cost of 6,907
GTQ – 907 USD (31.7% of total revenues) and a harvesting cost of 3,984 GTQ –
524 USD (18.3% of total revenues) with total operating costs of 50% of the gross
revenues. The fixed cost for management, capital and land are 3,586 GTQ – 471
USD (16.5% of gross revenues). After covering all operating and fixed cost, the
economic profit for one hectare of organic macadamia (21,780 GTQ – 2,863 USD)
would be 7,303 GTQ – 960 USD (33% of revenues). Price and risk factors and not
discounted in this model, as they have been discounted in the DCF.  

Organic  Certification  Cost  

Cost of organic certification based on OCIA International (http://www.ocia.org/) fees
and costs

The reported costs for Mayacert are aligned with the previous, even if the information
provided has been less detailed. Mayacert works as well with a twin Non-profit
Organization called Mayaverde that can provide extension and training services to
producers where needed and in case funds are available. Mayacert, compared with
other certifiers seems to have more focus and capacities on the capacity building

Bruni & Cojulun, epven de Guatemala S.A.. 19

dimension of certification. The following table provided by Mayacert highlights
overlapping and differences of certification processes for different markets.

Discounted  Cash  Flow  (10  ha)  

The model is annexed in excel format and data can be modified based on changing
assumptions. The estimation of start-up cost has been carried out using a DCF
model projecting cash flows for 12 years. The model is fed with the output from the
previous model and uses the following additional assumptions:

Grafted 3y old grafted seedlings 60 GTQ/each – 7.88 USD @180 trees/ha

Replenishment seedlings year 1 60 GTQ/each – 7.88 USD @27/ha (15%)
Fertilization (planting) 1,800 kg/ha
Fertilization years 1-3 after planting 600 kg/ha
Cardboard protection 5 GTQ/each – 0.65 USD @180/ha in y1 and 27 in y2&3
Land preparation 5000 GTQ/ha – 657 USD
Irrigation (buckets) 40 liters/tree/week
Weed control as per bearing trees in gross revenue model
Pest control as per bearing trees in gross revenue model

Bruni & Cojulun, epven de Guatemala S.A.. 20

Pest control innovation 15% savings in y7
Pruning as per bearing trees in gross revenue model
Bearing in y5 after planting
Cost of Capital 950 GTQ/ha in y1 – 125 USD/ha in y1
Cost of Land resource 1,250 GTQ/year – 164 USD/year
Cost of Organic Certification 22,800 GTQ in y1 – 2,997 USD in y1
Recurring cost of certification 8,400 GTQ/year – 1,104 USD/year
Discount rate 14%/y for operational and financial risk

The DCF model suggests that the initial investment need (or funding gap) for the
establishment of a 10ha orchard and ensure no negative cash flow to farmers is of
about 20,000 GTQ/ha (2,628 USD/ha). The break even is reached somewhere
between y11 and y12 and the Net Present Value after 12 years is slightly positive
(1,404 GTQ – 184.55 USD). The DCF is relevant for investment dimension, but hides
most of the social benefits for labor generation and all the intangibles. The model (for
financial purposes) considers the compost as a cost purchased at market reference
price, while it can be produced in the communities.

Alternative scenario
An alternative scenario for DCF has been taken into account to better reflect the
economics at community level. For the second scenario, labor has not been
considered as explicit cost for the investment, similarly for fertilizer and seedlings
that are considered as produced and grafted in a nursery in the community. Under

Bruni & Cojulun, epven de Guatemala S.A.. 21

this more “closed cycle” model, the NPV results much higher (around 400,000 GTQ
– 52,580 USD) and break even is reached in Y6, and with a funding gap of around
43,000 GTQ/ha (5,652 USD/ha)

Annexes  
1. Best Practices for Organic Macadamia (pdf)
2. Economic analysis – Gross revenue, cost of certification and DCFs (xls)
3. Full list of Producers and contacts (xls)

Bruni & Cojulun, epven de Guatemala S.A.. 22