Nestle Investing in Direct Trade Infrastructure in Philippines

Nestle has committed to buying 204,000 metric tons of robusta coffee direct from farmers in the Philippines by 2020. The company is rolling out its Farmer Direct program, which will strategically place buying stations throughout the Philippines and build further infrastructure to encourage direct trade.

Following is an announcement of the program from Nestle:

NESTLE, the biggest buyer of Robusta coffee beans in the Philippines, has committed to purchase 204,000 metric tons of Robusta coffee beans straight from farmers by the year 2020 through Farmer Connect, a direct buying system that encourages small farmers and small-scale intermediaries to sell their produce directly to Nestlé Satellite Buying Stations.

According to Hans Joehr, corporate head of Agriculture of Nestlé Ltd., Nestlé’s Farmer Connect forms an integral part of Nestlé’s commitment in supporting local coffee farmers, designed primarily to make coffee farming a more profitable livelihood for many coffee-dependent communities.

“As local farmers bring in and sell their coffee directly to us through Farmer Connect, we make sure that they gain access to competitive prices for their locally produced coffee beans. In effect, what we are really trying to achieve through Farmer Connect is to make coffee an attractive crop to grow and make it a sustainable livelihood for our growers,” Joehr said.

At the core of the Farmer Connect Model are the Nestlé Satellite Buying Stations, which are strategically situated at various points around the country. These buying stations are where coffee farmers are able to sell their produce based on prevailing world market prices, letting them get better prices, and therefore maximize profits from their produce.

Edith de Leon, senior vice president and head of Corporate Affairs of Nestlé Philippines Inc., said: “Nestlé endeavors to be as close to the coffee farmers as possible. Through our direct buying stations strategically located across the country, small farmers can sell their produce directly to Nestlé and they are guaranteed of getting a buying price which is aligned with global market prices. It also enables farmers to get the payment within 8 banking hours, thus the farmers can immediately benefit from the sale of their produce to Nestlé.”

For the past 25 years, the number of Nestlé Satellite Buying Stations has grown steadily in key coffee-producing areas throughout the Philippines. Currently, Nestlé has buying stations located in Calamba, Alabang, Cavite, Solano, Tuguegarao, Isabela, Palawan, Bohol, Bacolod, Iloilo, Agusan del Sur, Davao, Cotabato, Zamboanga, Tagum and opening in November, Lipa in Batangas.

The Farmer Connect Model also allows capacity-building and training of farmers through its Nestlé Better Farming Practices. Through the Nestlé Better Farming Practices, local coffee farmers can now gain entry to the best available agriculture practices and guidelines that are aimed at increasing yields, controlling costs, improving crop quality, and mitigating impacts of the changing climate.

“The Farmer Connect Program is part of our solution to get high-quality coffee delivered to us long term – beyond 2020,” said Joehr. “Through this model, we are creating for the next farmers and the next coffee farming producing generation, a sustainable income that helps keep coffee farming an accessible industry, helping to create and maintain a lot of jobs in the rural areas.”