Nestlé's Contribution to Global Food Supplies

Most of you have noticed that this year's Tropentag is being held in Zurich. Therefore, there was a Swiss Session today, giving Swiss organizations from the field of agricultural and rural development like the Swiss Agency for Development and Cooperation or the Swiss College of Agriculture an opportunity to present their work. One special guest of the Session was a Swiss institution far older than the other organizations that many people do not relate to issues of development at the first glance: Nestlé. The world's largest food company was represented by Hans Jöhr, Corporate Head of Agriculture of Nestlé. Mr. Jöhr delivered an adress on “effective contribution to ensure supply of safe, quality assured and affordable products to consumers”, in short, Nestlé's contribution to global food supplies. Mr. Jöhr informed the audience about several of Nestlé's activities in rural and agricultural development that – in corporate speech – are by and large traded under the name of Supply Chain Management (SCM). To be able to cater the food stuffs demanded by its customers, Nestlé is eager to improve its supply chains and the agricultural raw materials which are traded along these chains. (In the case of Nestlé, these are mainly cocoa, coffee, milk and sugar, accounting for approximately 40 percent of all of the company's raw material costs.) Ideally, SCM should contribute to improving the living conditions of the farmers cultivating the raw materials that Nestlé is processing into high-value products. For example, if farmers grow produce of higher quality this can fetch a better price, thus creating higher incomes for them. As Nestlé is sourcing produce from more than 540.000 farmers worldwide of which about 80 percent are small holder cultivators in developing countries and emerging markets SCM can have a lot of leverage. So what does rural and agricultural development in the guise of SCM look like? Mr. Jöhr gave several examples of which I want to mention three. First and foremost, there is the Sustainable Agriculture Initiative (SAI), which was launched by Nestlé in cooperation with other food companies. SAI's understanding of sustainable agriculture is “a productive, competitive and efficient way to produce agricultural products, while at the same time protecting and improving the natural environment and socio-economic conditions of local communities.” This definition is reflected in the so called Triple Bottom Line Approach that considers People, Planet and Profit. In order achieve sustainability in agricultural production, the SAI platform is conducting research, elaborating sustainable agricultural practices with stakeholders, and conducting extension work to bring new practices to farmers who are part of Nestlé's global supply chain. Besides supporting farmers in improving their cultivation methods, SAI serves as a “reference center” for sustainable agriculture for more than thirty leading companies active in food business and SCM. Second, there are programs that are conceived to improve specific supply chains, for instance the cocoa supply chain through The Cocoa Plan. One central aspect of Nestlé's Cocoa Plan is to improve and increase cocoa production of cocoa farmers in West Africa. To achieve this goal, the company is, among others, supporting farmer field schools that deal with pruning, bean drying and pest management and founded the agricultural “Nestlé Research and Development Centre” in Abidjan, Côte d'Ivoire, in 2009. This kind of specific supply chain improvement was done by Nestlé before with regard to coffee in Thailand, were company programs led to an increase in yield from 1,02 t/ha in 2004 to 2,38 t/ha in 2009 as Mr. Jöhr stated. The third and final example is a new cooperation between Nestlé and the “International Institute of Tropical Agriculture” (IITA) in Ibadan, Nigeria, that is working for improving agriculture in Sub-Saharan Africa for more than forty years now. Together, both organizations initiated a program that should reduce mycotoxins in produce bought by Nestlé (but that are also partly consumed by the farmers themselves). Until today, more than 10.000 farmers were trained and equipped so that levels of mycotoxins in their crops are considerably lower and comply with Nestlé's norms of 4ppb (2008/09). While it sometimes seems that the development community is skeptical about working together with the private sector (not to talk about the corporate one!) the speech of Mr. Jöhr demonstrated that there are various possibilities of cooperation, be it called Supply Chain Management or agricultural and rural development. One has to admit that Mr. Jöhr's explanations should have presented a bit more evidence that the various projects he mentioned actually contributed to the betterment of the living conditions of the targeted groups. But if this is the case and SCM really benefits poor farmers in the developing world why to eschew major players in the field of food production like Nestlé? In particular in times of increased Corporate Social Responsibility and the expansion of Public Private Partnerships (look at the IITA example above) the development community should recognize the opportunities the private sector offers – even if it's corporate! (Considering the potential reach of transnational corporations one might even say: especially if it's corporate!) Privatizing water might not be a proper idea, but projects like SAI or the Cocoa Plan can definitely be. So, good food, good life in the developing world together with the world's largest food company? Why not. Hopefully, corporate business will be present at the next Tropentag too to open new horizons.

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