New Nestlé Incentives To Stop Child Labour, Kids In School, Cocoa Tracing

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Chocolate maker Nestlé has announced new measures to tackle child labour among cocoa producers, which include paying an incentive for children to go to school.

“Child labour is unacceptable,” said Mauricio Alarcon, Market Head of Nestlé Central and West Africa. 

Chocolate is a product of the cacao bean, which grows primarily in the tropical climates of Western Africa, Asia, and Latin America.

On Friday Nestlé said its new plan to tackle child labour risks in cocoa production involved a “cash incentive” that “will be paid directly to cocoa-farming households for certain activities such as enrollment of children in school and pruning among several others”.  

For years the chocolate industry has been tainted by unacceptable child labour practices on cocoa farms.

Western African countries, mostly Ghana and the Ivory Coast, supply about 70% of the world’s cocoa.

“Through this new plan, we will extend our cocoa sustainability initiatives to other parts of Central and West Africa,” said Alarcon.

“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. “

Nestlé’s said at the center of its new plan was “an innovative income accelerator program, which aims to improve the livelihoods of cocoa farming families, while also advancing regenerative agriculture practices and gender equality”. 

The chocolate maker said its 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 CHF 1.3 billion by 2030, more than tripling its current annual investment.

“The incentives will encourage behaviors and agricultural practices that are designed to steadily build social and economic resilience over time,” said Nestlé.

“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 in addition to the premium introduced by the governments of Côte d’Ivoire and Ghana that Nestlé pays and the premiums Nestlé offers for certified cocoa. 

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 such as 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 said its new initiative sharpens focus on these root causes of child labour.

As part of the program, Nestlé said it will transform the global sourcing of cocoa to achieve full traceability and segregation of its cocoa products from origin to factory. 

“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. 

“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.”

Creating cash incentives to grow income substantially

The 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. 

By engaging in these practices, families can additionally earn up to CHF 500 annually for the first two years of the program. 

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. 

In summary Nestlé incentives include:

  • School enrollment for all children in the household ages 6-16;
  • 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.

Payments will be delivered via a secure mobile service transfer that will ensure traceability directly from Nestlé suppliers to the intended recipient.