Photo (The Guardian): Farmers breaking cocoa pods for the beans.
By IJEOMA UKAZU
In a bid to better the livelihoods of cocoa farming families, Nestlé has set a new plan to support farmers in their transition to more sustainable cocoa farming using various innovative income accelerator programs.
Nestle said this new plan also aims to tackle child labor risks in cocoa production, advance regenerative agriculture practices as well as achieving gender equality goals.
The global food and beverage company adds that the income accelerator program would provide incentives that will encourage behaviors in agricultural practices that are designed to steadily build social and economic resilience over time.
According to Nestlé’s new approach, cocoa-farming families will now be rewarded not only for the quantity and quality of cocoa beans they produce but also for the benefits they provide to the environment and local communities, adding that these incentives are on top of the premium introduced by the governments of Côte d’Ivoire and Ghana that Nestlé pays and the premiums Nestlé offers for certified cocoa.
This, Nestle, said it would be doing by providing cash incentives that will be paid directly to cocoa-farming households for certain activities such as enrollment of children in school and pruning among several others, stating that, the new plan would also support the company’s work to transform its global sourcing of cocoa to achieve full traceability and segregation for its cocoa products.
Speaking during a webinar recently to herald the launch, Nestlé CEO, Mark Schneider said, “Our goal is to have an additional tangible, positive impact on a growing number of cocoa-farming families, especially in areas where poverty is widespread and resources are scarce, and to help close the living income gap they face over time.
Continuing, Schneider said, “Building on our longstanding efforts to source cocoa sustainably, we will continue to help children go to school, empower women, improve farming methods and facilitate financial resources. We believe that, together with governments, NGOs, and others in the cocoa industry, we can help improve the lives of cocoa farming families and give children the chance to learn and grow in the safe and healthy environment they deserve.
“This cocoa is independently audited against the Rainforest Alliance Sustainable Agriculture Standard, promoting the social, economic and environmental well-being of farmers and local communities.”
Nestlé’s CEO further adds that Cocoa-farming communities face immense challenges, including widespread rural poverty, increasing climate risks, and a lack of access to financial services and basic infrastructure like water, health care, and education. These complex factors contribute to the risk of child labour on family farms. Together with partners, including governments, and building on a promising pilot program, Nestlé’s new initiative sharpens focus on these root causes of child labour.
On tracing all cocoa from origin to factory, Executive Vice President and Head of Operations, Nestle Global, Magdi Batato, said as part of the program, Nestlé will transform the global sourcing of cocoa to achieve full traceability and segregation of its cocoa products from origin to factory, adding that this new effort will help transform the supply chain of Nestlé and the broader industry.
Batato added that Nestlé will introduce a range of products with cocoa sourced from this innovative program, offering consumers the opportunity to support the improvement of the families’ livelihoods and the protection of children. This will start with a selection of KitKat products in 2023.
According to the Executive Vice President and Head of Operations, Nestle Global, “Our actions can help catalyze change on an important topic that is so close to our hearts. They will drive accountability and transparency across the industry, at a time when customers, employees, and communities increasingly expect companies to deliver on their shared values. By increasing traceability at scale, we will help build consumer trust in our products and respond to the growing demand for responsibly and sustainably sourced cocoa.”
He said this new approach targets to build on Nestle’s longstanding efforts to tackle child labor risks in cocoa production, stressing that, the company has invested in sustainability through the Nestlé Cocoa Plan since 2009 and through a robust monitoring and remediation system instituted since 2012, 149,443 children have been assisted to protect them against the risk of child labor, and 53 schools have been built or refurbished, pointing that this system is now the industry standard by which companies monitor their supply chains.
On creating cash incentives to grow income substantially, Nestle program rewards practices that increase crop productivity and help secure additional sources of income, which aim to close the gap to living income and help protect children, noting that by engaging in these practices, families can additionally earn up to CHF 500 annually for the first two years of the program.
According to Nestle, “The higher incentive at the start will help accelerate the implementation of good agricultural practices to build future impact. This incentive will then be leveled at CHF 250 thereafter as the program starts delivering tangible results. It is not paid based on the volume of cocoa sold and is inclusive to provide smaller farmers meaningful support, leaving no one behind. In a departure from normal practice, the program also offers financial incentives for the farmer’s spouse, who is typically responsible for household expenses and childcare.
“By dividing the payments between the farmer and the spouse, the program helps to empower women and improve gender equality. Examples of practices that Nestlé is incentivizing include: School enrollment for all children in the household ages 6-16; Implementing good agricultural practices, such as pruning, which increase crop productivity, and performing agroforestry activities to increase climate resilience, like planting shade trees among others.”
On helping farmers implement sustainable, scalable practices, Nestle is targeting on building on the positive results of an initial pilot in 2020 with 1,000 farmers in Côte d’Ivoire, in 2022 Nestlé will expand the program to include 10,000 families in the country, before extending it to Ghana in 2024. It will then assess the results of that test phase and adapt where necessary, before moving to reach all cocoa-farming families in its global cocoa supply chain by 2030.
On investment, Nestlé plans to continue to expand its cocoa sustainability efforts, the company aims to invest a total of CHF 1.3 billion by 2030, more than tripling its current annual investment.
The company said payments will be delivered via a secure mobile service transfer that will ensure traceability directly from Nestlé suppliers to the intended recipient. Because cash flow throughout the year is often a challenge, cash incentives will be distributed when they are needed most. Based on feedback from farmers, this includes the back-to-school period and before the rainy season. Third parties, including International Cocoa Initiative and Rainforest Alliance, will work with Nestlé to monitor participation.