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    Nestlé's Public-Private Partnerships in Agricultural Sourcing


    International Trade Forum - Issue 4/2009

    © Nestlé

    The world's largest food and beverage company, Nestlé, sources raw agricultural materials directly from nearly 160,000 producers and 600,000 farmers in more than 50 countries around the world. the company recognizes the importance of its direct relationships with agricultural suppliers and its corporate social responsibility strategy focuses on sustainable business practices in the areas of nutrition, water and rural development.

    Operating through more than 20 formal, and many less formal public-private partnerships (PPPs), Nestlé works with agricultural producers and governmental and non-governmental agencies (NGOs) to deliver innovative solutions to water management and sustainable farming practices in developing countries. As the following examples from rural China and Viet Nam demonstrate, Nestlé has been active in investing in and cooperating with local authorities to share experiences and best practices from other regions in order to deliver real benefits to agricultural communities.

    Biogas technology:
    Milk production in Shuangcheng, China

    Nestlé set up the Shuangcheng milk production facility in Heilongjiang Province, north-east China, in 1987. It is the largest facility of its kind in Asia and ranks fourth in the world in terms of annual dairy production in the Nestlé Group.

    Demand for milk products from the district grew quickly, but with increased productivity came problems. The University of Bern carried out a sustainability evaluation to assess the environmental impact of the increase in production. It highlighted the importance of adequately storing manure to prevent possible contamination of ground water. As common manure storage systems require high investments with no immediate financial benefits, farmers have little incentive to construct proper storage. Nestlé, in support of an initiative by the local authorities, identified cheap, adequately sized biogas "digestors" as a possible solution. Nestlé agronomists worked with the local government to train farmers in the correct handling and storage of farm manure and helped to install more than 1,500 small biogas plants.

    These biogas generators not only help to prevent water pollution but also create enough energy to cover farmers' cooking and heating needs. Larger units are being tested, which may provide additional electricity for a number of community and household uses. The simple technology helps farmers reduce their wood and charcoal consumption, saving families money while reducing household carbon emissions, which contribute to air pollution and global warming. More importantly, biogas production provides farmers with an economic incentive to manage their manure supplies more effectively, reducing water contamination in the process. Since Nestlé initiated the biogas project in 2003, education and outreach programmes supported by the company at 74 local demonstration farms have led to increased demand from farmers for the technology.

    Promoting sustainable Robusta production in Viet Nam's Dak Lak Province

    In 2005 Nestlé entered into a PPP project to promote the sustainable production of Robusta coffee in Viet Nam. Together with the Neumann Kaffee Gruppe and GTZ, the German-based international cooperation enterprise, the company implemented a pilot project for best practices in sustainable coffee cultivation and processing in the country's largest Robusta-producing area, Dak Lak, and trained farmers in efficient irrigation techniques. The local coffee sector's major players were also involved in the project, including the Department for Agriculture and Rural Development, the Agricultural Extension Centre, CafeControl, the Western Highlands Agro-forestry Sciences and Technical Institute (WASI), and the Central Highlands Soil Research Centre (CSC).

    Project results and experiences were disseminated nationally and in cooperation with the Vietnam Coffee and Cocoa Association. Subsequently, a system was established to channel information about the results of research in agricultural techniques and processing to farming communities.  The following steps ensure farmers receive the necessary information and training:

    Step 1: Collection of all relevant local and up-to-date research information covering all aspects of the coffee supply chain. This information is verified and assembled into practical, technical documents for training the trainers. Responsibility: WASI and CSC.
    Step 2: Training of extension workers and key farmers in participatory agricultural extension methods (GTZ) and technical know-how of coffee production in training of trainer sessions (six modules undertaken annually by WASI and CSC).
    Step 3: Extension experts translate technical training of trainer modules into practical training manuals for coffee producers to train farmers in farmer field schools (six modules annually in groups of 20 farmers).
    Step 4: The project offers standard examples of good agricultural practices with a focus on irrigation and fertilizer management in the form of demonstration plots. WASI and CSC supervise the demo sites.
    Step 5: Farmers record their daily activities in farmer field books. These records allow the calculation of financial results and describe input-output relationships. The results are  included in farmer field school training sessions, so that farmers are able to learn from the experiences of others.

    Project results

    The 2005 project received positive feedback from the local coffee producers, partner organizations and policy-makers.  The project helped make the irrigation of coffee plants much more efficient, leading to the use of some 60 per cent less water. The experience gained is also being rolled out into neighbouring provinces.