KIT Institute study notes key results for Nestlé cocoa income accelerator scheme
pic: Nestle
A report from the KIT Institute has revealed that Nestlé’s income accelerator programme for cocoa farmers has seen their household pay levels increase by a total of 38%, amid wider sector ambitious of delivering a living income for agricultural workers, writes Neill Barston.
The issue took centre stage at last month’s World Cocoa Conference event in Brussels, which explored the complete value chain in evaluating how the sector can work collaboratively to ensure true sustainability within the industry.
While pay levels were increased by 50% for farmers in core producer nations of Ghana and Ivory Coast for the upcoming crop season, questions remain as to whether this will set the tone for sustained uprating of farmer pay to ensure the future viability of the sector.
For its part, Nestlé’s work on raising overall cocoa farmer income was found to be having a positive impact, with the latest study revealing that high quality pruning being conducted at income accelerator farms contributed to a 32% increase in cocoa yields. The report from the Netherlands-based is formulated on a study conducted over the first 18 months of the income accelerator programme, in which a sample of 2,000 households spanning 28 cooperatives in Ivory Coast were examined.
Project scope
The scheme was initially unveiled two years ago targeting the reduction of the living income gap of cocoa-farming families and tackling child labour risks, based upon systems of encouraging behavioural change, greater access to education for children, and adoption of enhanced agroforestry practices to raise crop yields.
As Confectionery Production has previously reported, there has been only one public study from the sector, put forward by Mondelez, several years ago that estimated the wage gap in West Africa alone to be in the region of $10billion per year.
However, this was based upon pre-pandemic research, with communities in the region still facing notable challenges in the wake of Covid-19, including crop disease, unfavourable weather conditions that have left crop deficits in the past two years, issues of significant levels of child labour (more than 1.5 million children are still exposed to the worst forms of child labour in the region) and other external factors including galamsey illegal mining operations causing environmental degradation on a significant scale.
In terms of its reach, the company stated that its programme has so far reached over 10 000 families in Ivory Coast this year, including a total of 30 000 families. By 2030 it has targeted reaching an estimated 160 000 cocoa-farming families in Nestlé’s global cocoa supply chain. There are presently estimated to be somewhere between 2 and 3 million cocoa farmers in West Africa, though no precise figure has been defined.
As the Swiss headquartered company noted, the study additionally found that Nestlé’s program has effectively mitigated diseases and pests on farms, thanks to the implementation of good agricultural practices. The program has facilitated income diversification, promoted financial access and positively influenced women empowerment and child schooling rates. School enrolement is a key focus area of the income accelerator program, and the proportion of children attending school increased by of 10% points (vs. 5% points in the comparison group).
Furthermore, there has been a remarkable surge in the proportion of households investing in small businesses, such as agro-processing, boutiques, barbershops or soap-making. The increase is more than double, rising from 21% in 2022 to 55% in 2023. At the time of the study, these activities were still in an exploratory phase and had not yet generated significant income changes.
The program also promotes women’s financial inclusion by facilitating their participation in Village Savings and Loans Associations (VSLAs). These associations provide opportunities for savings and loans, with a particular focus on women looking to start or expand their own business. They offer various trainings on topics such as gender equality and entrepreneurship. The study highlights a 52% increase in the number of women enrolled in these associations.
“The test-at-scale of Nestlé’s income accelerator program has confirmed the initial results we saw in the pilot phase,” commented Darrell High, Global Cocoa Manager at Nestlé. “The program is transforming the way cocoa is farmed by professionalizing labor and ensuring trees are pruned. It is great to see that these professionally pruned farms deliver higher yields which translates to higher income for cocoa-farming families. By putting the family at the centre of the programme, we empower women who are supporting their children’s education and are pursuing opportunities to diversify their household’s income. We are continuing to gather feedback from the farming families, to learn and adapt the program accordingly. We are excited to have started to scale the program to 30,000 farming households and will continue to report on our progress.”