We have received a number of questions since we announced that our KitKat two-finger and four-finger will move to Rainforest Alliance certification from October 2020. We want to answer your questions as openly as we can.
Please can you explain your decision to move from Fairtrade to Rainforest Alliance certification for KitKat two-finger and four-finger?
We have been using 100% certified sustainable cocoa in the UK & Ireland since 2015 and that has mostly been achieved though Rainforest Alliance certification (formerly UTZ). We want to use one consistent certification system around the world and bringing these KitKat products under the same certification as the rest of our chocolate and biscuits will help us to track the commitments we have made through the Nestlé Cocoa Plan more closely.
Is Nestlé saying that Rainforest Alliance is a better scheme than Fairtrade?
No, both schemes are different, but we are not saying one is better than the other. We have chosen Rainforest Alliance certification because our aim is not only to make sure farmers receive a fair price for their cocoa, but to also make sure that we are tackling key social and environmental issues including child labour and deforestation. Those aims match the mission and goals of Rainforest Alliance where there is a focus on how farms are managed and certification is awarded to farms that meet comprehensive social, economic and environmental standards. Addressing these issues is vital to making sure the industry is sustainable in the long term.
How can you justify leaving farmers worse off at this time?
Nestlé is fundamentally committed to responsible sourcing throughout our supply chain and to ensuring that all our farmers are treated fairly. This decision has not been taken lightly. We have spent a lot of time looking, in detail, at the potential impacts on farmers of making this change. Our team of experts has worked very hard to put in place a detailed and comprehensive plan to continue to support our cocoa farmers’ livelihoods following the decision. We value the relationship we have with the cocoa cooperatives and farmers we work with, and we want this to continue.
As an initial measure, we will offer to pay for any farmers who currently have only Fairtrade certification to get to the level required by the Rainforest Alliance certification programme. This will include providing farmer training and helping with the completion of necessary paperwork. If they are not able to do this in time for the next crop, we will also provide them with financial support for the coming year.
Similar to the Fairtrade Premium, we will also pay the Rainforest Alliance premium on top of the farmgate price for cocoa, and the Living Income Differential (LID) which is a mechanism introduced by the Ghanaian and Ivorian governments.
Additionally, recognising the unprecedented disruption caused by the current global pandemic, we are guaranteeing the current minimum price for the next two years for those farmers affected by the transition.
OK, but what else are you doing to support farmers financially at this very difficult time?
We are investing in a series of initiatives to help farmers and our cocoa growing communities over the next two years to overcome some of the long-term systematic problems that farmers face. This includes £1m to develop a living income pilot and a further £500,000 for community projects.
The pilot is all about closing the gap on living income. It works by agreeing targets or commitments in advance with farmers and co-operatives for good agricultural practices, reforestation, child labour and alternative incomes. Direct cash payments are made to farmers for achieving them. What it means in practice is that not only do farmers have the opportunity to boost their income, they will be benefitting their farms, their families and the local environment in doing so.
How is the money for community projects being spent? Do the cooperatives have any say in the matter?
We have been working with the individual farmer cooperatives affected by our move from Fairtrade to Rainforest Alliance cocoa certification for the past three months. We gave the cooperatives some broad guidance on the budget for community projects, and we listened as they shared their development plans and their ideas for the projects that Nestlé could support.
We have already allocated around £440k of the £500k we’ve committed to investing between 2020 and 2022. The way that the funds are being used are diverse – here is a snapshot of the activities that the money will be used for:
- The building of a school
- Adding classrooms and canteens to existing schools
- Refurbishment and equipment for health centres
- Repairs and refurbishments to cooperative warehouses
- Pruning kits to help farmers keep their cocoa trees healthy
- Motorbikes to enable local trainers to get out to farms to provide information and education to farmers.
We will be sharing regular updates on the progress of these projects and details of what we have been able to achieve with the cooperatives.
Can you say categorically that farmers will be paid the same as they were under Fairtrade next year?
Farmer income is based on some variables that we do not control but we can say that the amount we spend on premiums and additional projects with farmer cooperatives in the year ahead will significantly exceed the Fairtrade premium we would have paid. Variables we do not control include the annual price of cocoa, which the Ivorian and Ghanaian governments will only confirm shortly before the new cocoa year begins, as well as the portion of the Fairtrade premium that the farmer receives, as this is decided by each individual cooperative.
What is the actual Rainforest Alliance premium that you’ll be paying?
We will be paying a Rainforest Alliance premium of $180 per tonne.
Will Nestlé still have a relationship with Fairtrade?
Yes, we will. Fairtrade remains a partner at a global level with some of our other products. We are also fellow signatories to the new EU cocoa coalition as part of our proactive engagement on cocoa sustainability at EU level. This coalition comprises other major confectionery brands, NGOs, as well as the Rainforest Alliance and Fairtrade certification schemes.