Food and beverage company, Nestlé, is to give direct payouts to cocoa farmers in a bid to remove child labour from its supply chain.
The organisation will also invest more than $1.4 billion over the next decade in a new programme aimed at helping cocoa-farming families to close living income gap.
Nestlé made the announcement at a virtual launch of a plan aimed at combating child labour in cocoa industry.
The initiative followed September 2021 launch of Nestlé’s intention to support a just transition to regenerative food systems.
Cocoa-farming communities face challenges, including widespread rural poverty, climate change, and lack of access to financial services and basic infrastructure such as water, healthcare services and education.
The factors contribute to child labour on family farms.
Under Nestlé’s new plan, farmers and their spouses will receive cash incentive for activities that help women and children, increase crop productivity, ensure sustainable agricultural practices and secure additional sources of income.
The cash incentive will be paid directly to cocoa-farming households for enrolment of children in schools and pruning, among other activities.
The plan supports Nestlé’s work to transform its global sourcing of cocoa to achieve full traceability and segregation for its cocoa products.
Mr Mark Schneider, Nestlé Chief Executive Officer, said: “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 overtime.
“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, non-governmental organisations 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.”
According to him, the programme rewards practices that increase crop productivity and help to 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 CHF 500 annually for the first two years of the programme.
“ The higher incentive at the start will help accelerate implementation of good agricultural practices to build future impact.’’
The CEO also said that tracing all cocoa from origin to factory would be part of the programme.
According to him, Nestlé will transform the global sourcing of cocoa to achieve full traceability and segregation of its cocoa products from origin to factory.
He hoped that the effort would help to transform the supply chain of Nestlé and the broader industry.
He added that Nestlé would introduce a range of products with cocoa sourced from the innovative programme, offering consumers the opportunity to support improvement of families’ livelihoods and protection of children.
This will start with a selection of KitKat products in 2023.
“Our actions can help catalyse 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.
“Today’s announcement builds on Nestle’s longstanding efforts to tackle child labour risks in cocoa production,’’ said Magdi Batato, Executive Vice President and Head of Operations, Nestlé Global.
By Vivian Ihechu