Rural Development


Agriculture employs over one-third of the world’s working population and three-quarters of the world’s poor people live in rural areas. Nestlé spends approximately CHF 20.4 billion a year on raw materials, and works directly with approximately 540 000 farmers to help them to increase their productivity, protect the environment and climb out of poverty. About 3.4 million people in developing countries earn their livelihoods from our supply chain, so we can have a positive long-term impact on economic and environmental development and standards of living, sometimes helping entire regions to increase agricultural productivity and economic performance. Sourcing in ways that minimise impact on climate change and long-standing social issues such as child labour in the rural sector are among the challenges we face.

 

 

Our goals


The wellbeing of the communities from which we draw our agricultural raw materials and local labour is vital to our success as a business and to our shareholder value. Through rural development, providing local employment and encouraging sustainable production practices, as well as purchasing directly from small-scale suppliers and intermediaries, we not only seek to protect the supply and quality of our raw materials, but also to have a positive, long-term impact on the local economy and standards of living of rural people.

 

 

Our actions


We supported direct suppliers through technical assistance and knowledge transfer, and provided microfinance loans totalling USD 45 million, and ensured they operate responsibly and sustainably through the Nestlé Supplier Code. Our rural development principle is to manufacture, wherever possible, in countries from which we source commodities; today, about half our [443] manufacturing plants are in the developing world, primarily in rural areas and directly provide local employment to over 200 000 people. We also actively participate in multi-stakeholder initiatives to promote best practice.

 

 

Our performance


During the year, we enhanced our approach to supplier development and farmer training and developed more Sustainable Agriculture Initiative Nestlé (SAIN) initiatives, which were coupled with the ongoing communication of, and assessment against, our Supplier Code of Conduct. We also consolidated our support for the coffee industry under The Nescafe Plan, committed 220 million high-yield coffee plantlets
distributed to farmers by 2020 with science and sustainable initiatives over the next decade and developed our policy on palm oil.

 

 

CSV summary:

 

  • Value for Nestlé: More secure supply of better-quality raw materials; lower procurement costs; consumer preference for our products; profitable growth
  • Value for society: Advice and technical assistance; greater yields; higher quality crops; lower resource use; increased income; wider employment and economic development opportunities; consumers aware our products are safe, of high quality and produced using sustainable practices

To create value for our shareholders and our company, we must create value for people in the countries where we are present. This includes the farmers who supply us, the employees who work for us, our consumers and the communities where we work.

The following stories and case studies of Nestlé’s efforts in the areas of “rural development” provide an interactive view of what the concept of shared value looks like in action.

• Arabica Experimental & Demonstration Farm
• Robusta Coffee and Development Program
• Programme of Assistance to Dairy Farmers