May 15 2014, 5:25am CDT | by Forbes
In Yunnan, Nestlé not only brought a new cash crop to the southern province, but also imposed a nationally unheard of rural structure which is now empowering the communities, and may well bring about further social changes in future.
From the launch of Nestlé’s action plan in Pu’er City in Yunnan Province in 2002, many peasants had been converted to coffee growing. Now, they are ready for the next step: sustainable growth. In 2011, the Global Nescafé Plan was offered to the providers, giving them three years to secure the “4C” label (Common Code for Coffee Communities). It has been set in Germany in 2003 by the world community of coffee growers, to ensure fair production while preventing soil exhaustion and pollution. By November 2014, all farms having failed to do so, will be barred from Nestlé’s partnership list.
Under the 4C system, only natural pesticides are allowed. Waters sullied by the de-beaning process are recycled, and the remains of the berry are used as fertilizer. Biodiversity is recommended, and children’s work banned. To bring awareness on his costs, the farmer must also keep an account book, which is once a year reviewed by the Action Center.
In machinery and water system, the “4C” label supposes an investment of up to one of two seasons of profit. In exchange, the farmers draw a slightly improved buying price and a few bonuses, like the free delivery of leaf-bearing trees for biodiversity (protecting the coffee plantations from drought in summer, frost in winter) and mass-ordered fertilizers at a 20-30% discount.
But for Wouter De Smet, manager of Nestlé Coffee Agriculture Service, this bid was far from secured upon launching: “we were worried – why should farmers invest without receiving an obvious material plus?” Very fast however, the Nestlé’s team ceased worrying: “The normal time for converting a farm to “4C” is six months, but the first growers to report that they were ready, did so in 2 months. Thus we became aware or the true gain of the system: through it, the farmers got what they needed most, ie recognition, the stainless steel sign at their door stating their name and the “4C” label”.
In May 2014, the Nestlé action plan will regroup 1,429 farms into three “units”. 416 others will receive the label by November, shaping the fourth unit.
The sizes vary vastly, from the midget one on 0.4 hectare producing 900kg/year, to the behemoth on 453ha delivering 890 tons. But for each farm, the cost of “4C” verification is the same, borne by Nestlé, which also bears the cost of overall verification by international 4C inspectors –this has just been done, valid for the next three years, at the cost of 12,000$.
The rules of the game are strict, and known by all. In each unit, a few farms are randomly selected: if only one is red-handed caught cheating, for instance using outlawed pesticides, the whole unit loses the label – all will have to go through the whole process again…
Last figure to be quoted: during the 12 years of existence of its Global Coffee Plan, Nestlé spent 6 million dollars, largely paid back by the directly sourced beans for its Nescafé plant in Dongguan (Guangdong) – a modest amount, for such a large result!
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