Improve farm economics among the farmers who supply us
Delivering impact through Farmer Connect
Improving farm economics and ensuring viable futures for farmers are essential if we are to achieve long-term supplies of safe, quality raw materials.
Why it matters
We need to understand farmer needs if we are going to help farmers address their challenges. Our Theory of Change approach shifts the focus towards outcomes and impacts, and assessing the improvements facilitated by our actions. This allows us to evaluate and demonstrate the results of our activities on farmers’ livelihoods and rural communities.
We have adopted a deeper understanding of what our suppliers need through our Theory of Change (ToC). This represents a significant shift in focus for Nestlé, moving away from previous reporting activities, and towards assessing the positive impacts of our actions. The greater sense of context gained through ToC enables us to adopt a more comprehensive approach to addressing the issues farmers face.
What we are doing
We’ve focused on training farmers in good agricultural practices, helping them grow safe, high-quality raw materials, and develop resilient, sustainable farms.
Improve farm economics in seven priority sourcing locations based on the results of the RDF baselines.
Our result: We have results from four out of the seven locations. Three other studies are planned for 2019/20 as part of the Farmer Connect program.
How we deliver impact
Nestlé works directly with 716?000 farmers around the world through Farmer Connect, which enables us to develop supply chains that meet our social, environmental and ethical requirements. We trained 440?000 farmers in Farmer Connect in 2018.
As stated in our 2017 report, we have rolled out 18 baseline rural development assessments to understand the needs of the farmers who supply us, using two key tools: the Rural Development Framework (RDF) and Response-Inducing Sustainability Evaluation (RISE). Using these baselines, we are implementing programs to improve farm economics in seven priority locations, in line with the priorities of farming communities. We have results from four out of the seven priority sourcing locations and three other studies are planned for 2019 as part of the Farmer Connect program.
Our model for impact
The five stages of ToC are to:
- Identify and prioritize issues through a materiality assessment exercise (e.g. RDF and RISE).
- ‘Reverse engineer’, mapping backwards from intended impacts to the preconditions needed to achieve them.
- Define assumptions about the context.
- Identify interventions that create the desired changes.
- Define performance indicators to measure outcomes.
By using the ToC model, we can:
- Define and articulate long-term sustainability goals and outcomes.
- Measure ongoing progress toward short- and medium-term milestones.
- Question any assumptions we have made in defining our goals.
- Identify and mitigate physical and reputational risks.
- Allocate resources and prioritize activities to do the most good.
- Communicate our impact on farmer livelihoods and rural development to stakeholders.
- Use the information to support training and technical assistance for our suppliers.
We recognize that different markets have their own local needs and situations. We have therefore developed a generic group-level ToC for key categories, which can be reviewed and adapted to suit local requirements. Local markets propose their changes to Nestlé and, once approved, KPIs are consolidated at group level to give a comprehensive model for measuring and monitoring impacts, which is reviewed annually.
System model for ToC
Improving farm income in Brazil
NATA (Center of Authorised Technical Assistance) is a technical assistance program developed to support Brazilian dairy farmers, encouraging better management of their farms and enabling them to drive their businesses more profitably. Veterinarians, agronomists and zootechnicians visit farms to collect data, which they then analyse for economic indicators using specially developed software. The results are presented to farmers to help them in their planning and enable them to make better-informed decisions. By the end of 2018, 550 farmers had registered in the NATA program, and had grown their volume by 50% more than non-NATA milk producers.
Farmers are also encouraged to adopt best practices to ensure quality and safety in milk production. The Best Practices on Farm Standards program (BPF), introduced in 2006, enabled farmers to receive R$0.03 more per liter than non-certified farmers. In 2018, we introduced an additional program, Best Practices on Farm Nature (BPF Nature), which builds on BPF and supports farmers who produce milk through natural farming methods. BPF Nature farmers receive an additional R$0.10 per liter. So far, 140 farmers have been certified.
We have also pioneered digital support for farmers. Leiteria is an app that offers farmers quick and easy access to key information such as milk collections, payment statements and invoices, quality results, and comparisons across time periods. The app has already been uploaded more than 1000 times since its launch, demonstrating its worth to farmers.