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28 Jan 2022

Financial Times

West Africa: Cocoa farmers to receive payments from Nestlé to end child labour in their supply chains

‘Nestlé to pay cocoa farmers to stop using child labour’ 28 January 2022

Nestlé, the world’s largest foodmaker, will triple its cocoa sustainability funding to SFr1.3bn ($1.4bn) over eight years, including direct payouts to African cocoa farmers in a bid to remove child labour from its supply chain. The Swiss group said it was focusing on poverty as the root cause of child labour. It will be the first multinational food company to pay farmers directly, starting in Ivory Coast and Ghana, the two largest producers of the key ingredient for chocolate. The company, whose brands include Kit Kat and Aero, will distribute payments of up to SFr500 a year for two years to households from whom it sources its cocoa, followed by payments of SFr250 a year until 2030.

… In Ivory Coast and Ghana, which account for almost 65 per cent of global cocoa production, 1.56m children, or 45 per cent of agricultural households in the two countries, were engaged in child labour in the industry, including those using sharp tools and agricultural chemicals and carrying heavy loads, according to a study in 2020 by social research group NORC at the University of Chicago. “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,” said Mark Schneider, Nestlé’s chief executive.

… Campaigners, who have been calling on the chocolate industry to pay more for cocoa to reduce poverty, said Nestle’s announcement was encouraging. “As part of a broader strategy to encourage higher productivity and fair pay for cocoa, [direct payments] could be successful,” said Antonie Fountain, managing director of the Voice Network, an umbrella group for 17 non-profit organisations. He said the programme’s broader impact remained to be seen, but added that “maybe every company will need to do this in the future”. The payments will help farmers who have struggled with volatile cocoa prices as chocolate demand fluctuated because of the effects of the pandemic. The border closures because of Covid also left some cocoa farmers without migrant labour, affecting production.