PIP COURTNEY, PRESENTER: And now to the comfort food Australians reach for in good times and bad:

Chocolate.

It's a $2.5 billion our year business in this country and while there's never been any shortage of local manufacturers, only a handful can claim to be producing 100 per cent home grown chocolate.

And they're all at Mossman in Far North Queensland.

ON SCREEN: Cocoa country

(Melted chocolate streaming through production machinery)

Chocolate is one of the world's most popular foods and flavours, and given that Australian farmers have such a long and successful track record producing milk and sugar it's perhaps surprising that they've only now got round to supplying the other main ingredient - cocoa.

One of the biggest stumbling blocks has been the cost. Compared to the cheap often child labour employed in the world's major cocoa producing countries.

(Footage of African children harvesting cocoa beans)

Nonetheless, work began here in the mid 90s to scope the viability of producing home grown chocolate.

A study into the viability of a cocoa industry in northern Australia was in response to lobbying from Cadbury Schweppes. Back in 1998, the company was concerned about two things - rising world chocolate consumption and the security of world cocoa supplies.

Barry Kitchen was Cadbury's research director at the time.

BARRY KITCHEN, DAINTREE ESTATES: I sort of said to the board 'Look I think we've really got to have a go at not being of the whims of the economic conditions in the world', particularly in West Africa where there was always a coup or there was something happening that your supplies were affected.

And I said look let's have a go at seeing if we can start this project and at least see if we can grow it properly in Australia.

PIP COURTNEY: The research took eight years and swept across northern Australia.

BARRY KITCHEN: Cadbury's put a lot of money into it over a number of years - as did the Federal Government, as did Queensland Government, West Australian Government and the Northern Territory Government. Everyone chipped in, and out of the- The outcome was that the cocoa grew by far the best in Far North Queensland.

PIP COURTNEY: Despite being a key driver of the project, Cadbury lost interest since the economics of an Australian cocoa industry suited family farming done on a co-op model rather than a corporate enterprise.

BARRY KITCHEN: Cadburys, if we could prove it could work, was happy to sort of leave it as a legacy for the right entrepreneurial people to pick it up and take it forward.

Meanwhile, myself and a number of other people, together with the growers around Mossman, decided to take it forward in their own right.

PIP COURTNEY: That's where Mossman cane growers Gerard and Angelo Puglisi come into the picture.

With sugar prices in the doldrums seven years ago, they were looking to diversify and as it turned out, their farm was ideal cocoa country.

GERARD PUGLISI, COCOA GROWER: It's surprisingly quite easy to grow. The trees are a bit sensitive when they're younger, some insects that can attack them. Once you get them over that first two-year period they aren't too bad to look after.

PIP COURTNEY: What were the expectations when the trees went in about the financials of it?

GERARD PUGLISI: We knew we weren't going to get an income off them for three years.

We actually did get some small pods after about 18 months - not a lot to do it but it just gave us the confidence that yes they can grow and they will produce.

PIP COURTNEY: And with chocolate containing the Puglisi family's cocoa now on the market, Gerard Puglisi and his wife Therese now find themselves with new farm duties - like hosting curious visitors.

(Gerard Puglisi speaking to a group of tourists)

GERARD PUGLISI: Once the pods are split we pull the seeds out by hand and sit them in the ferment box.

PIP COURTNEY: ..and turning their tractor shed into a tasting station.

THERESE PUGLISI, COCOA GROWER: We're selling those chef buttons into many restaurants in Port Douglas and in Mossman itself. They're selling extremely well.

GERARD PUGLISI: Well Pip, you've seen the plantation, the estate. have you seen inside a cocoa pod?

PIP COURTNEY: No, dying to see what they look like inside.

(Gerard hacks open yellow cocoa pod)

GERARD PUGLISI: That's the inside of a cocoa pod. There's about 40 to 50 seeds usually inside it. It's got that white fleshy bit and it tastes similar to a custard apple.

When we split the pods and we take the seeds off, all that white bit gets fermented off and you're left with something similar to that. Then that goes on a drying table and it's left pretty much looking like an almond, same colour and shape.

(Cuts open seed to reveal purple interior)

That purple bit will end up being the cocoa nib.

PIP COURTNEY: The Puglisis have nearly two hectares under trees, making them one of the biggest growers. They expect to harvest 20 tonne this year.

GERARD PUGLISI: This paddock where we've got the cocoa now was a block that was average for sugarcane. It's close to the Daintree rainforest and the pigs used to come in and give us severe damage in this block. So cocoa is resistant to that - they don't just walk through, they don't annoy it.

This block will be more profitable under cocoa than it would've been under cane.

PIP COURTNEY: And Gerard believes with world chocolate consumption growing rapidly, investing in cocoa makes sense.

GERARD PUGLISI: I recently went to a conference in Brisbane last year and they were sort of mentioning that by 2020 there could be a shortage of food in general, and cocoa was probably in their top three.

PIP COURTNEY: There are now five cocoa growers in Australia, all based in Mossman in Far North Queensland. And cooperation's the name of the game.

GERARD PUGLISI: We all work together. If anyone's got a problem, we'll help each other out.

PIP COURTNEY: The 300 page RIRDC Report has been some help but apart from talking to growers in Papua New Guinea, there's little local advice.

GERARD PUGLISI: We're slowly rewriting the menu I suppose for Australian conditions, and any new growers that come into the organisation they're going to benefit from some of the mistakes or some of the good things that we've done. So we can help them.

PIP COURTNEY: Don Murday is one of two cane growers who's taken a punt on cocoa.

DON MURDAY, COCOA GROWER: I've always been looking to diversify the income stream on the farm. I went into growing papaya 15 years ago and then the opportunity came to grow cocoa and I thought it was a very exciting opportunity.

I'm sort of hoping for 20 tonnes per hectare. So that's the $14,000 per hectare. It's a lot of work.

PIP COURTNEY: It's a tantalising figure though isn't it?

DON MURDAY: It is, yeah, compared to our returns off sugar. I never see cocoa replacing the sugarcane. I've got 140 hectares of sugarcane and I think five hectares of cocoa is probably all I'd be interested in having. It is a lot of work.

PIP COURTNEY: Work's the key word here, for growers were led to believe cocoa would fit neatly around peak cane periods.

GERARD PUGLISI: But we found we started in the end of April we go every two weeks until Christmas.

DON MURDAY: Picking something quite labour intensive because unfortunately the pod has to be physically cut off the tree by hand. We'll never get away from that.

Pruning is also a big deal. I've just been through now and pruned my 2,000 trees. And it's taken a good month to do it.

PIP COURTNEY: At the Puglisis, harvesting's a family affair.

GERARD PUGLISI: Can't sit on tractors, it's all hands-on. All the pruning has to be done by hand, all your picking has to be done by hand. In that side of thing, it's labour intensive.

PIP COURTNEY: Farmers are notoriously inventive. Do you think a solution to some of these labour issues will come out of a farmer's shed?

GERARD PUGLISI: The picking side of it, we're unsure. Because of the nature of the plant the pods can come off the trunk anywhere. They don't just hang off the end of the tree, so there's no way you can get it and shake it like other fruits do.

PIP COURTNEY: But to compete with overseas cocoa growers, Australian farmers will have to be innovative.

DON MURDAY: A local engineer has almost developed an automatic pod splitter, which we believe will be the world's first - and it's looking tremendous at this stage.

DARRYL KIRK, COCOA GROWER: You can really smell that, that bean now, can't you?

JENNY KIRK, COCOA GROWER: They smell fantastic don't they?

PIP COURTNEY: Darryl Kirk and his wife Jenny are both chefs. A mix of curiosity, a love of food and suitable small acreage led them to cocoa.

JENNY KIRK: Who wouldn't want to grow chocolate? (laughs)

I like the idea that it was a hardy crop and also because it was a new industry, the Government was going to help fund the initial setting up of the crop. And it's a unique product, Australian grown chocolate.

So why not?

PIP COURTNEY: The Kirks have 1,400 trees.

DARRYL KIRK: Each time we have spare seeds we've been planting then and getting them out, so another few more years we'll hopefully take it up to 2,000 trees altogether.

PIP COURTNEY: They know how labour intensive this game is, having spent hours podding cocoa beans by hand at Don Murday's farm where initial processing is done before the nibs are sent to Melbourne.

JENNY KIRK: I don't find it a chore, it's just beautiful out there in the trees.

DARRYL KIRK: I don't think I have ever sort of said 'Oh God I've got to go and pick the cocoa'. Like Jenny said, it's nice out there it's not like work.

PIP COURTNEY: And they appreciate that they're part of a small group of pioneers.

DARRYL KIRK: There's no secrets between all of us. We're all striving for the same result.

PIP COURTNEY: The way the group of five is getting around Australia's high labour costs is to retain ownership of the cocoa.

BARRY KITCHEN: We handle everything from the seeds to the seedlings to the nurseries - all the way through to the chocolate.

DON MURDAY: The opportunity to be share holders and also participate in sharing in the gross margin, that's when it sort of looked like a goer to me.

BARRY KITCHEN: They're sharing in the whole value adding of the supply chain. It's quite a different model and I believe it's the only way it will work in Australia.

PIP COURTNEY: Cocoa plantations are called estates. The plan is to make a marketing virtue of the separate farms.

ALAN MORTIMER, DAINTREE ESTATES: The five different farmers are producing five slightly different chocolates. The equivalent I can make is in the wine industry where you grow the grapes on the east side of the mountain or the west side you get slightly different cases even though it's the same variety.

PIP COURTNEY: Daintree Estates produced the first Australian chocolate last year.

(The Daintree estate product line)

Barry Kitchen's perseverance and patience paid off.

BARRY KITCHEN: You do some times when you don't feel it's going to get there but you know, I had, you know, a passion to see it did work.

But yeah, look, we're there now. And it was such a great thing to see eventually a commercial outcome.

PIP COURTNEY: Do you like your own chocolate?

GERARD PUGLISI: We love our own chocolate. (laughs)

PIP COURTNEY: This chocolate's a boutique product that's not trying to compete with Cadbury's.

Waiting for this all day! Alright...

(Pip eats some Daintree chocolate)

Yum!

GERARD PUGLISI: Now you've tried the milk, do you want to give the dark a go?

PIP COURTNEY: Mm! Thank you.

(Gives paper to Gerard)

Here you go - I'll share. I'm a good sharer.

GERARD PUGLISI: Thank you.

(Pip bits the dark chocolate)

GERARD PUGLISI: It's got a lot stronger taste than the milk.

PIP COURTNEY: I see what you mean about that fruity taste. I mean, it's still chocolate but if you told me that there was a 1 per cent raisin in there or something I'd believe you.

(Chocolate being poured into moulds)

Here at former Cadbury executive Alan Mortimer's business in Melbourne is where the chocolate's made.

ALAN MORTIMER: We started this off with- all on the pilot scale because the one thing you can't go into is to try to do things on too big a scale.

Three and a half million tonne of cocoa beans are produced around the world. We're going to produce 10 tonne of cocoa beans up in North Queensland so to recover the cost on such a small volume we've got to be innovative.

And that's where we've got this bean to bar processing place here and hopefully further down the track either this equipment or equipment like it will go back up to North Queensland.

PIP COURTNEY: As well as being a food scientist, Mr Mortimer's a cocoa farmer. He now owns the old Cadbury's plantation.

ALAN MORTIMER: I never, ever dreamed that I'd be ever be able to be involved all the way back to the farm.

PIP COURTNEY: At the Queensland food and Wine Show's recent chocolate competition, judge Russell Smith gave his verdict.

RUSSELL SMITH, FOOD JUDGE: Great texture... Nice. Yep. Beautifully conched so... And lots of cocoa flavour coming through there in the chocolate - but not powdery or anything, so mm lots of flavour.

I'd like to see them next year in the competition here. Love to. That's great chocolate.

PIP COURTNEY: So you would rate that.

RUSSELL SMITH: Oh yeah, yeah. That's a good start, that's a really good start. And I mean because they're made at 45 per cent, it's got lots of flavour.

PIP COURTNEY: With chocolate now on the market, interest in Far North Queensland cocoa is growing, with agronomists and cane growers regular visitors.

GERARD PUGLISI (presenting to a tour group): This is one of our older plots. It's about seven years old, it's been in the ground for. And it's been producing fruit for just about two years now.

PIP COURTNEY: The five founders want others to join them, convinced that cane farms and cane farmers are a natural fit.

GERARD PUGLISI: Most farmers have got these little blocks that are just a pain to look after and a pain to cut. So that's where we see its place.

We don't see it taking big blocks of big area of cane out but these little hectare, two hectare blocks can be a good marriage for sugar and for cocoa.

BARRY KITCHEN: We just need more cocoa in the ground because every bean that we produce, I know we will make it into chocolate and it will sell.

PIP COURTNEY: The diversification push is supported by the cane industry.

STEVE GREENWOOD, CANEGROWERS: Our prices are good there's no doubt about that but I think it's very fresh and real in a lot of growers' minds that things could go bad. We don't think they are at the moment but they could - and so I think there is potential for both those industries to exist beside each other.

And our industry's built on people that have a go and build new things. So I think it is actually very exciting.

THERESE PUGLISI (at a tasting session): And our milk variety, which contains a 45 per cent cocoa content in our milk variety. So other brands on the marketplace are only- contain 15 to 20 per cent cocoa content in their milk variety.

PIP COURTNEY: For years people have laughed at the pioneer cocoa growers, saying it was a crazy plan. But the little group that could has big plans.

BARRY KITCHEN: In five years' time, we will be selling it actively in Europe, in the United States, and in some parts of Asia no doubt. So that would be my vision for five years.

DON MURDAY: I always maintain that growing grapes and making your own wine and having your own wine with a steak at night would be the ultimate, but I guess this is the next best thing.

GERARD PUGLISI: Chocolate is something that people eat when they're sad and when they're happy, so it should be a good fit and gives us security that people will always want chocolate.