CHILLI SOURCE: A proud farmer from Kelantan, Malaysia, whose chillies are used in Maggi chilli sauce.
In line with our policy of procuring commodities for our business from local suppliers and creating shared value for both parties, the Agricultural Services Department at Nestlé (Malaysia) Berhad began engaging local farmers in Kelantan to produce chillies as long ago as 1995.
In return for providing the key ingredient for our Maggi chilli sauce, the Contract Chilli Farming Project provides the farmers with a secure market for their produce – via the local Farmers Organisation Board – at a pre-determined price. Approximately 80% of the chillies produced under the scheme are purchased by Nestlé.
The programme shares sustainable agricultural practices with the farmers, and Nestlé staff train them on efficient and environmentally friendly farming systems, including pesticide application technology, waste management and good harvesting techniques, and provides field demonstrations on increasing productivity, reducing costs, minimising environmental impacts and worker safety. The contract also ensures greater product traceability.
QUALITY GRAINS: A traditional red rice farmer in Sarawak, Malaysia, sieves through his crop.
On average, the farmers on the scheme now earn MYR 8000 per six-month season – double their previous income – enabling them to educate their children, invest in machinery and purchase more land. Just four farmers produced 16 tonnes of chillies from four acres of land in 1995, but there are now 300 farmers involved in the scheme, producing 800 tonnes on 300 acres of land, and many more have expressed an interest.
Ten years on, the project has also won the Prime Minister’s Award for Socio-Economic Development, and the farmers have been granted the SALAM accreditation for excellence in farming practices – a pre-requisite for attaining the Ministry of Agriculture’s “Malaysia Best” label. More recently still, the Chilli Puree Project was initiated to stabilise prices, minimise wastage and create new income opportunities in times of over-supply, by processing fresh chillies at a new chilli puree factory.
The successful chilli contract farming scheme has since been replicated in Sarawak with the cultivation of red rice, an ingredient in locally produced Cerelac infant cereals. This initiative also gives local farmers the opportunity to be part of Nestlé’s supply chain, involving more than 500 farmers and 350 hectares of rural farmland. The project also enables good agricultural and labour practices to be shared, and through Ministry of Science, Technology and Innovation funding, Nestlé has procured agricultural machinery suitable for traditional farmers.
The content of this page was externally assured by Bureau Veritas, March 2011.
