Rural Development

Context

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 $20.8 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 minimize 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

In 2009, we supported direct suppliers through technical assistance and knowledge transfer, and provided microfinance loans totalling $ 30 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 of our 456 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 cocoa industry under The Cocoa Plan, committed $470 million to coffee and cocoa plant 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.