Supply Chain

Toward Resilient Coffee Farming:
Nestlé Offers Farmers Weather Insurance, Contributes to Regenerative-Ag Guidebook

Nestlé is piloting a weather-insurance program for over 800 smallholder farmers in Indonesia and has contributed to a guide for coffee farmers to shift to regenerative practices.

Published 1 year ago | About a 4 minute read

Image: Quyen Luong

Financial protection for smallholder coffee farmers

Climate change is putting many commodity-growing regions under pressure. Many smallholder coffee farmers around the world are now at the mercy of irregular weather conditions that can affect their crops.

Major coffee brands are taking action: Last month, for example, Starbucks announced the development of six new coffee-tree varietals that are resistant to some of the impacts of climate change.

Now, Nestlé has announced it is piloting a weather-insurance program for more than 800 smallholder farmers in Indonesia that supply coffee for its Nescafé brand. Launching in collaboration with Blue Marble — a specialist in climate insurance — the program provides financial protection to help farmers cope with unpredictable, crop-battering weather patterns including rainfall and severe drought.

"This weather insurance helps to establish a support mechanism for smallholder coffee farmers in Indonesia,” says Marcelo Burity, Global Head of Nestlé's Green Coffee Development. “It allows them to access financial resources to re-establish their crops in the event of irregular weather conditions while building resilience in coffee farms."

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The insurance uses satellite-based climate data to determine when coffee output has been impacted by either too much or not enough rainfall during key phases of the crop cycle. Payments are issued automatically to registered coffee farmers that have been affected, according to the severity of the weather.

"Smallholder coffee farmers in Indonesia are vulnerable to climate risks and need access to insurance to protect against extreme weather events," said Blue Marble CEO Jaime de Piniés. "We are proud to partner with Nestlé and its brand, Nescafé, to develop innovative ways to support the climate adaptation of smallholder coffee farmers and their families."

This initiative will help further Nescafé Plan 2030 — the brand's vision to support the long-term sustainability of coffee and to help improve farmers' livelihoods. Based on the results of the pilot, Nestlé will determine whether to expand the approach to other Nescafé sourcing locations around the world.

Sharing knowledge to accelerate the transition to regenerative agriculture

Speaking of climate-resilient farming: As more and more global food and beverage producers are acknowledging every day, a shift toward regenerative agriculture helps farmers restore soil health, reverse biodiversity loss, strengthen ecosystems and reduce the amount of greenhouse gases released during farming. But changing agricultural practices requires access to knowledge and time to learn and implement.

Having committed to sourcing 20 percent of its key ingredients through regenerative methods by 2025 and 50 percent by 2030, Nestlé has already begun shifting some of its agricultural supply chains — including wheat and cocoa — to regenerative practices. Now, hot on the heels of the release of SAI Platform’s regenerative-agricultural framework — which offers a much-needed globally aligned definition of regenerative agriculture, to which 30 agriculture co-ops and 170 companies (including Nestlé) have committed — Nestlé has contributed to Regenerative Agriculture for Low-Carbon and Resilient Coffee Farms, a guidebook developed by the Alliance of Bioversity International and the International Center for Tropical Agriculture (CIAT). The guidebook — which Nestlé says complements its own Regenerative Agriculture Framework — provides field agronomists, trainers and professionals working with coffee farmers with a set of best practices that they can use and adapt to different farming contexts, helping farmers transition to regenerative practices — including agroforestry, intercropping, soil conservation and cover crops, integrated weed and pest management, integrated nutrient management, efficient water use, waste valorization, landscape actions and the rejuvenation of coffee trees with well-adapted varieties.

Pascal Chapot, Global Head of Sustainable Agriculture Development at Nestlé, said: "The guidebook gives coffee farmers a set of field actions they can implement tomorrow to help them become more resilient to climate change and to diversify their sources of income. Knowledge is key; and we hope that this guidebook makes these regenerative-agriculture practices more accessible to farmers and supports an accelerated transition towards them — this is essential to tackling the climate challenges ahead."