Our thinking

Chocolate coins

4 February, 2022

Child labour in the agricultural supply chain is a persistent and concerning issue affecting 45% of children in agricultural households in Côte d’Ivoire and Ghana cocoa growing areas.

Now Nestle has responded, promising cash incentives to cocoa farmers who send their children to school to help achieve their goal of 100% fully traceable, directly sourced cocoa by 2025.

These incentives will be paid to farmers directly, independently of volumes produced. To qualify, farmers must send their children to school, prune cocoa trees, plant shade trees and diversify their income with other crops. Annual cash payments of up to 500 Swiss francs, roughly 20-25% of a farmer’s average annual income, will be delivered via mobile transfer, halving after two years. The scheme will be extended to all cocoa farmers who supply Nestle by 2030.

Traditional approaches to eradicating child labour have focused on educating farmers and increasing scrutiny of farming practices. However, such an approach fails to recognise the importance of improving the material conditions of farmers. There is now consensus that tackling child labour requires a systems-based approach focused on poverty reduction as well as education.

We are pleased to see Nestle, who used more than 436,000 tonnes of cocoa in 2020, recognising poverty as a root cause of child labour. However, while cash transfers go some way towards tackling poverty in the short-term, they are no substitute for a long-term commitment to paying a fair price for cocoa. While this might lead to higher prices for consumers, given growing consumer demand for responsible business practices, this is likely to be a price chocolate-lovers are willing to pay.

By Miriam Shovel