Nestlé offers cash to cocoa farmers to try to reverse wrongdoings of the past

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Nearly two decades ago, major corporations pledged to stop using cocoa harvested by children, but failed to take meaningful action.

Chocolate producers face increasing pressure from investors, consumers and governments to ensure cocoa beans are not produced using child labor in West Africa.

However, most cocoa, the main ingredient in chocolate, is still produced using child labor.

The majority of the world’s crop, around two-thirds of the world’s cocoa, is grown on small farms in remote areas of Ghana and Côte d’Ivoire.

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It is estimated that 2 million children work in cocoa plantations. (AP)

Child labor has increased to 45 percent in these countries and about 2 million child laborers work in cocoa plantations, according to a study by the University of Chicago.

Nestlé has announced that it will start paying cocoa farmers cash if they send their children to school rather than tending the crops in order to solve the problem.

The huge Swiss multinational, criticized for allowing children to be used in the production of its chocolates, said it would triple its current annual spending on sustainable cocoa to reach a total investment of $1.41 billion from here 2030.

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Nestlé will start paying cocoa farmers in cash if they send their children to school. (Reuters)

“It is only by tackling the root causes that we will have an impact,” said Nestlé chief operating officer Magdi Batato.

To verify that children are actually going to school and that farmers are following the rules, IDH, The Sustainable Trade Initiative, will monitor the program with other third parties.

“We believe this will be a game-changer on the path to reducing the risk of child labor,” Batato said.

“It is only by tackling the root causes that we will have an impact,” said Nestlé chief operating officer Magdi Batato. (Reuters)

Under the new program, farmers will receive direct cash payments via mobile transfer of up to $543 per year, which Batato says represents 20-25% of a farmer’s average annual income.

The incentive will then stabilize at around $270 after two years and will gradually be extended to all 160,000 Nestlé cocoa farmers by 2030.

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

The incentive will then stabilize at around $270 after two years and will gradually be extended to all 160,000 Nestlé cocoa farmers by 2030.

The incentive will then stabilize around $270 after two years and will gradually be extended to all 160,000 Nestlé cocoa farmers by 2030. (AA)

“A household incentive is much more inclusive for small farmers, really ensuring no one is left behind,” confectionery chief Alexander von Maillot said in the interview.

Nestlé will launch KitKat products made with cocoa from farms that have received cash incentives next year.

Von Maillot said the company’s efforts could ultimately lead to higher prices for consumers.

Nestlé said it aims to source all of its cocoa through a fully traceable, direct-origin supply chain by 2025.

Nestlé has said it wants to source all of its cocoa through a fully traceable, direct-origin supply chain by 2025. (AA)

The challenge of traceability of the origin of cocoa

The prevalence of children performing hazardous work, including the use of sharp tools, has also increased in the world’s two main cocoa producers, according to the study funded by the US government.

Levels were higher than in 2010, when companies such as Mars, Hershey, Nestlé and Cargill agreed to reduce the worst forms of child labor in the cocoa sectors in Ghana and Côte d’Ivoire by 70% d 2020.

It is extremely difficult to trace the origin of cocoa beans, in part because the cooperatives regularly buy from producers who are not members.

Nestlé said it aims to source all of its cocoa through a fully traceable, direct-origin supply chain by 2025.

However, only 51% of the cocoa it used in 2021 was directly sourced and traceable.

The prevalence of children doing hazardous work, including the use of sharp tools, has also increased in the world's two major cocoa producers.

The prevalence of children doing hazardous work, including the use of sharp tools, has also increased in the world’s two major cocoa producers. (AA)

“Using child labor to get cheap cocoa”

Last year, the cocoa industry also faced allegations that young children were being used to work on farms harvesting cocoa beans.

Eight children have claimed they were used as slaves on cocoa plantations in Ivory Coast and have taken legal action against seven of the world’s biggest cocoa companies.

The companies have been accused of aiding and abetting the illegal enslavement of thousands of children so they can “continue to benefit from cheap cocoa”.

Nestlé, Cargill, Hershey, Olam, Mars, Mondelez and Barry Callebaut are named as defendants in the caseand a filed opposition brief alleges that they formed a “business to enable them to continue to benefit from the cheap cocoa harvested by forced child labor”.

The companies claimed there was insufficient evidence to link them to the abuses allegedly suffered by the eight plaintiffs.

Although these cocoa companies have all pledged to solve the problem, they have been criticized for continuing to use forced child labor while claiming to solve the problem.

There are many children who are tricked or sold into slavery on the farms where they are forced to carry heavy loads of cocoa, use harmful pesticides and handle machetes.

There are many children who are tricked or sold into slavery on the farms where they are forced to carry heavy loads of cocoa, use harmful pesticides and handle machetes. (AA)

Child labor is worse than before

Figures suggest the problem is getting worse, despite promises from big chocolate producers.

There are many children who are tricked or sold into slavery on these farms where they are forced to carry heavy loads of cocoa, use harmful pesticidesand handle machetes.

Eight children have claimed they were used as slaves on cocoa plantations in Ivory Coast and have taken legal action against seven of the world's biggest cocoa companies.

Eight children have claimed they were used as slaves on cocoa plantations in Ivory Coast and have taken legal action against seven of the world’s biggest cocoa companies. (AP)

Leaders of multinational chocolate companies have admitted that the cocoa supply chain is “broken”.

“The cocoa supply chain as it operates today is broken,” said John Ament, the private company’s global vice president of cocoa.

“It’s time to recognize this and build a new model and a new approach that puts the focus on the smallholder.”

Leaders of multinational chocolate companies have admitted that the cocoa supply chain is

Leaders of multinational chocolate companies have admitted that the cocoa supply chain is “broken”. (AA)

The VOICE network, a global grouping of non-governmental organizations and trade unions working on cocoa sustainability, said Nestlé’s cash transfer plan was “a big step forward”.

He added, however, that cash transfers did not replace the commitment to pay a fair global price for beans and that farmers were still vulnerable to low world market prices.

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