Nestlé announces plan to reduce child labor, boost farmer income, and ensure cocoa traceability

Published on: 27 January 2022
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Nestlé plans to reduce cocoa child labor. A new program aims to improve cocoa farmers' incomes while promoting regenerative agriculture and gender equality. Cocoa farmers will get cash for school enrollment and pruning. Nestlé's new plan aims to trace and segregate its global cocoa sourcing. Nestlé will triple its annual cocoa sustainability investment by 2030.

The income accelerator program helps farmers and their families transition to sustainable cocoa farming. The incentives will encourage social and economic resilience-building behaviors and agricultural practices. Nestlé's new approach rewards cocoa-farming families not only for the quantity and quality of cocoa beans they produce, but also for their environmental and community benefits. These incentives are in addition to the premiums Nestlé pays Côte d'Ivoire and Ghana for certified cocoa. This cocoa is audited against the Rainforest Alliance Sustainable Agriculture Standard, promoting farmer and community well-being.

Cocoa-farming communities face poverty, climate risks, and a lack of financial services and basic infrastructure like water, healthcare, and education. These factors contribute to family farm child labor. Nestlé's new initiative targets child labor's root causes with partners, including governments, and a promising pilot program.

Nestlé CEO Mark Schneider said,

"Our goal is to have a 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 their living income gap over time. We'll continue to help children go to school, empower women, improve farming methods, and provide financial resources. Together with governments, NGOs, and others in the cocoa industry, we can help cocoa-farming families and give children a safe, healthy environment to learn and grow."

Increasing income with cash incentives The program rewards practices that increase crop productivity and help secure additional income, which helps protect children. Families can earn up to CHF 500 annually for the first two years of the program by following these practices. The higher initial incentive will help implement good agricultural practices to build future impact. As the program delivers results, this incentive will rise to CHF 250. It's not based on cocoa sales volume and is inclusive to help smaller farmers. The program offers financial incentives for the farmer's spouse, who usually handles household expenses and childcare. The program empowers women by dividing payments between the farmer and spouse. Nestlé's incentives include:

Enrollment of all 6-16-year-old children; Pruning to increase crop productivity; Planting shade trees to increase agroforestry's climate resilience; Diversifying incomes by growing crops, raising chickens, beekeeping, or processing cassava.

Payments will be made via a secure mobile service transfer from Nestlé suppliers to the recipient. Because cash flow is often a problem, cash incentives will be given when needed. This includes back-to-school and before the rainy season, according to farmers. Nestlé will be monitored by International Cocoa Initiative and Rainforest Alliance.

Helping farmers adopt scalable practices Nestlé will expand its pilot program for 1,000 farmers in Côte d'Ivoire to 10,000 families in 2022 and to Ghana in 2024. It will then evaluate the test phase's results and adapt as needed before reaching all cocoa-farming families in its global supply chain by 2030.

Nestlé will help farmers make lasting changes by: Enhancing the monitoring and remediation system to identify, prevent, and address child labor risk and increase school enrollment; Training families on household financial planning and entrepreneurship through the Gender Action Learning System; Training local groups to perform pruning and other agricultural tasks for a cooperative each year; Diversifying farmers' and spouses' incomes, Helping women start Village Savings and Loan Associations (VSLA) to encourage savings and provide small business loans.

As the program expands to more communities, feedback from farmers and farmer cooperatives, as well as ongoing data collection and evaluation, will be used to modify and improve it. A multistakeholder strategic advisory committee managed by IDH-The Sustainable Trade Initiative will provide independent oversight.

Cocoa origin-to-factory traceability Nestlé will transform its global cocoa sourcing to ensure full traceability from origin to factory. This will transform Nestlé's and the industry's supply chain. Nestlé will introduce a range of products with cocoa from this innovative program, allowing consumers to support family livelihoods and child protection. 2023 KitKat products will be included.

"Our actions can help change a topic we care about. They will drive accountability and transparency across the industry, when customers, employees, and communities expect companies to uphold their values"

Magdi Batato, VP-Operations, said.

"By increasing traceability at scale, we'll build consumer trust in our products and meet demand for responsibly sourced cocoa.

Today's announcement continues Nestle's efforts to combat child labor in cocoa production. Nestlé's Nestlé Cocoa Plan promotes sustainability since 2009. Since 2012, 149,443 children have been helped to avoid child labor, and 53 schools have been built or remodeled. Companies monitor their supply chains with this system.

Source: Nestle news

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