Jan. 27, 2022

Nestle will start paying cocoa farmers cash if they send their children to school rather than out to tend crops as part of a push to purchase all of its cocoa through a fully traceable, directly sourced supply chain by 2025.

Chocolate makers are under increasing pressure from investors, consumers and governments to ensure that the cocoa beans they source have not been produced using child labor or on illegal cocoa plantations in protected forests, which They are common in West Africa.

The food group behind KitKat chocolate bars and Smarties confectionery said it will triple its current annual spending on sustainable cocoa for a total investment of 1.3 billion Swiss francs ($1.41 billion) by 2030.

“Only by addressing the root causes will we have an impact,” Nestle’s chief operating officer, Magdi Batato, told Reuters in an interview this week.

A recent survey by the University of Chicago found that among children in farming households in the cocoa-growing areas of Côte d’Ivoire and Ghana, 45% were involved in child labour.

To qualify for the payments, farmers must send their children to school, prune cocoa trees, plant shade trees and diversify their income with other crops or livestock.

To verify that the children actually attend school and that the farmers follow the rules, IDH, the Sustainable Trade Initiative, will monitor the program with other third parties.

Children who occasionally help on family farms outside of school hours are not included in the International Labor Organization’s definition of child labour.

Sustainability schemes that chocolate makers have used to date have had limited success in addressing environmental and human rights issues in cocoa, and Western governments are now seeking to legislate.

Nestlé said that 51% of the cocoa it used in 2021 was directly sourced and traceable, up from 46% in 2020. By 2025, it wants to be able to trace 100% of its cocoa to specific farms under its internal sustainability scheme. the Nestlé Cocoa Plan.

“We are very confident that this will be a game changer on the road to reducing the risk of child labor,” said Batato.

Under the new program, farmers will receive direct cash payments via mobile transfers of up to CHF500 ($543) a year, which Batato says represents 20-25% of a farmer’s average annual income. The incentive will then level off at CHF250 after two years and be progressively extended to all 160,000 Nestlé cocoa farmers by 2030.

Unlike current premiums that are paid per tonne and can encourage overproduction, Nestlé, which used more than 436,000 tons of cocoa in total in 2020, said it would pay farmers and their spouses directly, regardless of the volumes produced.

REUTERS