The collaboration sees the launch of a pilot weather insurance program, specifically tailored to offer financial protection to over 800 smallholder coffee farmers in the region, shielding them from the uncertainties of unpredictable weather, including rainfall and drought.
The weather insurance initiative is underpinned by advanced satellite-based climate data, providing a sophisticated tool to gauge the impact of adverse weather conditions on coffee output during crucial phases of the crop cycle. This data-driven approach enables swift and accurate identification of instances where too much or insufficient rainfall has adversely affected the coffee yield.
Under the parametric insurance scheme, payments are automatically issued to registered coffee farmers who have borne the brunt of the weather’s severity. This ensures a prompt and targeted response to mitigate the financial losses incurred by the farmers.
According to reports, more than 800 smallholder coffee farmers benefiting from this pilot program are integral suppliers to Nescafé, a prominent brand under the Nestlé umbrella. The collaboration not only safeguards the livelihoods of these farmers but also contributes to the resilience and sustainability of the coffee supply chain.
This initiative represents a proactive step towards addressing the vulnerabilities faced by smallholder farmers in the face of climate uncertainties. By combining Blue Marble’s expertise in climate insurance with Nestlé’s commitment to sustainable sourcing, the partnership strives to create a positive impact on the lives of farmers while reinforcing the resilience of the agricultural sector in Indonesia.
Marcelo Burity, Global Head of Nestlé’s Green Coffee Development, commented, “This weather insurance helps to establish a support mechanism for smallholder coffee farmers in Indonesia. 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.”
Forming a crucial component of the Nescafé Plan 2030, this initiative aligns with the brand’s overarching vision for the enduring sustainability of coffee and the enhancement of farmers’ livelihoods. Nestlé, driven by its commitment to long-term impact, envisions positive outcomes for both the environment and the communities involved.
Pending the outcomes of the pilot program, Nestlé will assess the feasibility and potential benefits of extending this innovative scheme to other Nescafé sourcing locations. The results of the pilot will play a pivotal role in shaping the future trajectory of this initiative, signaling Nestlé’s dedication to impactful and scalable solutions.
In a parallel effort, back in 2019, Blue Marble, a consortium comprising nine companies including Zurich, AIG, Aspen, and Hamilton, took substantial strides in renewing and expanding its weather index insurance program. This program, initially launched in 2018 in collaboration with Nespresso, an operating unit of the Nestlé Group, has been instrumental in providing support to smallholder coffee farmers in Colombia. The renewal and expansion underscore the ongoing commitment of the consortium to fortify the resilience of coffee farmers in the face of climate-related challenges.
Jaime de Piniés, CEO of Blue Marble, also commented, saying: “Smallholder coffee farmers in Indonesia are vulnerable to climate risks and need access to insurance to protect against extreme weather events.
He added: “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.”