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Plan launched to achieve full traceability in cocoa, tackle child labour risks

Nestlé has announced a plan to tackle child labour risks in Central and West Africa's cocoa production

Cocoa Nestle 28 JanNestle is helping set up Village Savings and Loans Associations focused on women. (Image source: Nestle)

At the centre is an innovative income accelerator programme, which aims to improve the livelihoods of cocoa-farming families, while also advancing regenerative agriculture practices and gender equality. A cash incentive will be paid directly to cocoa-farming households for certain activities such as enrolment of children in school and pruning among several others. Nestlé’s new plan also supports the company’s work to transform its global sourcing of cocoa to achieve full traceability and segregation for its cocoa products. As Nestlé continues to expand its cocoa sustainability efforts, the company plans to invest a total of around US$1.39bn by 2030, more than tripling its current annual investment.

According to Mauricio Alarcon, Market Head of Nestlé Central and West Africa, “Child Labour is unacceptable. We are committed to working closely with key stakeholders to ensure that this novel approach will help address its root causes and support farmers and their families to transition to more sustainable cocoa farming in communities where we operate. Through this new plan, we will extend our cocoa sustainability initiatives to other parts of Central and West Africa”.

The incentives will encourage behaviours and agricultural practices that are designed to steadily build social and economic resilience over time. With 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. 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 cocoa is independently audited against the Rainforest Alliance Sustainable Agriculture Standard, promoting the social, economic and environmental well-being of farmers and local communities.

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 programme, Nestlé's new initiative sharpens focus on these root causes of child labour.

"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," said Mark Schneider, Nestlé CEO. "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."

Creating cash incentives to grow income substantially

The programme 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. By engaging in these practices, families can additionally earn up to US$536 annually for the first two years of the programme. The higher incentive at the start will help accelerate the implementation of good agricultural practices to build future impact. This incentive will then be levelled at US$268 thereafter as the programme starts delivering tangible results. Examples of practices that Nestlé is incentivising include school enrolment for all children in the household ages six to 16; implementing good agricultural practices, such as pruning, which increase crop productivity; performing agroforestry activities to increase climate resilience, like planting shade trees; generating diversified incomes, for example through growing other crops, raising livestock such as chickens, beekeeping or processing other products like cassava.

Helping farmers implement sustainable, scalable practices

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 programme 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.

Nestlé will help ensure farmers have the resources, training and social and financial structures to make lasting changes by organising and training local groups to perform pruning and other beneficial agricultural tasks within a given cooperative each year; providing income diversification opportunities for farmers and their spouses and helping set up Village Savings and Loans Associations (VSLA), focused on women, to encourage savings and provide loans for small business opportunities.

Tracing all cocoa from origin to factory

As part of the programme, Nestlé will transform the global sourcing of cocoa to achieve full traceability and segregation of its cocoa products from origin to factory. This new effort will help transform the supply chain of Nestlé and the broader industry. Nestlé will introduce a range of products with cocoa sourced from this innovative programme, 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.

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