Boost Cocoa Yields through Family Incentives

Boost Cocoa Yields through Family Incentives

Applied by
NestléNestlé

Summary

Providing cash incentives to cocoa-farming families for pruning, schooling, and agroforestry to improve income and resilience.

Context

Nestlé is a global food and beverage company operating across more than 180 countries, sourcing key agricultural commodities such as cocoa, coffee, and dairy. Cocoa farming in Côte d’Ivoire and Ghana faces persistent challenges: low income, child labour risks, and climate vulnerability. Nestlé launched the Income Accelerator Program to address these issues by incentivising practices that improve productivity, education, and climate resilience. The initiative is part of Nestlé’s broader decarbonisation strategy targeting Scope 3 emissions in agricultural supply chains.

Location: Côte d’Ivoire and Ghana

Solution

The program aims at improving cocoa livelihood via cash incentives, agroforestry and mechanisms to reduce child labor in cocoa supply chains. The programme offers up to €500 per household annually for the first two years, and €250 thereafter, split equally between both heads of household to promote gender equity. Incentives are tied to:

  • Farm support: Pruning, composting, agroforestry

  • Household support: School enrolment, diversified incomes

  • Verification model: 50% paid on promise, 50% on verified action

  • Delivery: Mobile money transfers to both partners

  • Scale: Expanded to 30,000 families in 2024, aiming for 50,000 by 2026 and 160,000 by 2030

Figure 1: Expected expansion of the project

Figure 2: Incentive system for families (1)

Impact

Sustainability impact

Climate

Targets Scope 3 emissions (Category 1: Purchased Goods and Services). GHG impact includes 35,661 tons CO₂ eq reduced and 9,509 tons of carbon sequestered through agroforestry and composting.

Nature

  • 556,220 forest and fruit seedlings planted

  • 34,039 hectares of cocoa fields pruned

  • 10,587 farms composting

These practices improve soil health, biodiversity, and climate resilience.

Social

  • 88% of children enrolled in school (vs. 81% in 2022)

  • 80% of households in Village Savings and Loan Associations (VSLAs)

  • +18% women empowerment index

  • +31% child well-being index

  • €303 average cash received per household over 2.5 years

  • 20422 households promised t o send their children to school

Business impact

Benefits

  • +21% cocoa net income

  • +15% total household net income

  • +18% cocoa yield (kg/ha)

  • +105% savings through VSLAs

These improvements enhance supply chain resilience and farmer loyalty.

Costs

  • Annual support: €500 (Years 1–2), €250 thereafter

  • Deductions: €25 for pruning, €7.50 for agroforestry (Years 1–2); €15 for pruning (Year 3)

  • Funded by Nestlé and partners including ICI, IDH, Rainforest Alliance, KIT Institute, and suppliers like Cargill, ECOM, ETG

Impact beyond sustainability and business

Co-benefits

  • Gender equity through equal cash distribution

  • Financial literacy and resilience via VSLAs

  • Community empowerment through shared decision-making

Implementation

Typical business profile

  • Large food manufacturers with agricultural sourcing and issues with child labour and scholarization in supply regions

  • Firms with Scope 3 emissions from smallholder agriculture

  • Relevant in West African cocoa supply chains

Approach

  1. Identify target households

  2. Offer cash incentives for pruning and schooling

  3. Deliver training and agroforestry support

  4. Verify actions and distribute payments

  5. Monitor impact via KIT Institute and local partners

Stakeholders involved

  • Project Leads: Nestlé Cocoa Plan team

  • Company Functions: Procurement, sustainability, operations

  • Main Providers: KIT Institute, Rainforest Alliance, ICI

  • Others: Farmer cooperatives, suppliers (Cargill, ECOM, ETG), local government

Key parameters to consider

  • Mature initiative (launched 2020)

  • Implementation timeline: 30 months to date

  • Technical prerequisites: mobile money access, pruning brigades

  • Subsidies: Partner contributions and donor support

  • Geographic relevance: Côte d’Ivoire, Ghana

Implementation and operations tips

  • Challenge: Incentive complexity

    • Solution: simplified structure

  • Challenge: cash flow timing

    • Solution: two step payment model

  • Tip: engage both heads of household to ensure gender equity and resilience