cocoa farmer with children

NESTLÉ TO PAY COCOA FARMERS TO KEEP CHILDREN IN SCHOOL

Nestlé has announced plans to combat child labour in cocoa farming across Ghana and Côte d’Ivoire, where the company sources most of its Cocoa. The food group intends to incentivise cocoa farmers to send their children to school instead of farms. 

This will be accomplished by paying farmers cash directly, on top of the Living Income Differential (LID) and premiums for certified Cocoa, which meets the Rainforest Alliance Sustainable Agriculture Standard. 

The change can be seen as part of Nestlé’s objective to have a fully transparent and traceable supply chain by 2025. In addition, the company reportedly plans to increase sustainable cocoa spending to 1.3 billion Swiss francs annually by 2030, tripling its current amount.

The move comes when consumer demand for sustainable and ethical sourcing is on the rise, and chocolate makers are faced with increased pressure to be transparent about how and where they source their Cocoa. 

Reuters cited a University of Chicago survey, which reported a staggering 45% of children from agricultural households in cocoa-growing areas of Ghana and Côte d’Ivoire were engaged in child labour. We tried to verify how this number was reached with the University of Chicago but were unable to access the original report. Various categories of child labour can be used, including benign activities, such as those involved in helping the family as well as the more sinister indentured labour.

Nestlé’s new initiative focuses on the root causes for child labour and the living income gap farmers and their families face

Nestlé Chief Executive Officer Mark Schneider

The topic of child labour in cocoa farming is hugely controversial, however, and more complex than it might appear. For example, if a child helped with farm work outside of school time, it would not be considered child labour by the International Labour Organization. However, the same work done by a child during school hours may be evaluated differently. 

A source close to the production told Bartalks of children who were not attending school because they did not have enough money for school meals.

Additionally, there are other factors such as unpredictable climate risks, lack of educational facilities, and others that may not be as easily addressed with more money.

Nestlé’s initiative will be interesting to watch, but we are supportive of the effort regardless.

Côte d’Ivoire’s Prime Minister Patrick Achi welcomed the new initiative on behalf of his country, saying that “we must at all costs and by all means deal with the root cause of the ills on which we all agree, which is the income of the farming population.”

The introduction of the LID, which attempted to tackle the issue of low farmer income, has thus far yielded mixed results, according to Achi.

To qualify for the payments, farmers must meet certain criteria. Children have to go to school, shade trees have to be planted, cocoa trees have to be pruned, and other crops and livestock must be raised to supplement their income. This process will be monitored by The Sustainable Trade Initiative, along with other third parties, to ensure that these rules are followed.

A recent article by Michiel Hendriksz identified another problem with linking payments to children who are registered in school, namely, that there are a large number of children who do not have birth certificates and therefore are not officially recognised in school. While they may be allowed to attend, once they reach the age of 12, they must take exams, which is not possible without a birth certificate. Therefore this entire group of children will be excluded from the Nestlé plan, which is a shame.

we must at all costs and by all means deal with the root cause of the ills on which we all agree, which is the income of the farming population.”

Côte d’Ivoire’s Prime Minister Patrick Achi

Nestle will pay farmers’ families directly, independent of the amount of Cocoa they produce, under the new programme, which differs from the Living Income Differential (LID). This is hoped to have the effect of discouraging intentional overproduction.

Once eligible, farmers will be paid up to 500 Swiss francs a year directly via mobile transfer. Speaking with Reuters in an interview, Nestlé’s head of operations, Magdi Batato said the initiative would be a “game-changer on the road to reducing the risk of child labour”. Batato also said that the extra payment represented a 20-25% increase on a farmer’s average annual income. After two years, the amount will be sustained at 250 Swiss francs annually and offered to all of Nestlé’s 160,000 cocoa farmers by 2030. 

This increase in pay is eventually expected to find its way to the food company’s price tags, as Batato admits, “over time, there might be an increased price for some of the products, definitely.” However, he remains confident that consumers will be willing to pay extra for more responsible business practices.

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