27 The Hershey Company | 2021 ESG Report Cocoa The Big Picture Our Company Cocoa Responsible Sourcing and Human Rights Environment Our People Youth Community About This Report Lifting up Rural Livelihoods Several overlapping Supporting the Development Improving Income Through Supporting Income Diversification factors contribute to the of Farmer Groups Farm Development Plans To help diversify economic opportunities, prevalence of poverty Farmer groups are essential platforms for farmers We support farmers in achieving economic we support cocoa community members in in cocoa-growing to unify their voices to increase their earning gains by actively exploring how to improve their developing alternative means of generating potential and economic resilience. In 2021, farming practices through creation of tailored income. In 2021, more than 2,600 community communities. through Cocoa For Good, Hershey expanded farm development plans. Through Cocoa For members were trained in alternative income- its support to 102 farmer groups, reaching more Good and associated farmer groups, farmers generating opportunities, such as soap making than 94,300 farmers through our suppliers have access to higher-yielding cocoa varieties and cassava processing. These factors include low access to credit, across seven origins. and are trained on the proper pruning of shade limited negotiating power for farmers to set and cocoa trees, fertilization and irrigation, crop prices, a singular reliance on cocoa for Our support has assisted these farmer groups and weed and disease control. Farmer group income, falling cocoa yields as cocoa trees age, and farmers in receiving independent verification members also have improved access to credit illiteracy, a lack of proper business and financial of their cocoa in compliance with credible and loans to make further investments in their training and persistently disempowered women. sustainability standards. This action not only farms. In 2021, this support included more than Additionally, we know that the cycle of poverty helped us reach our goal of sourcing 100% 31,000 farm development plans. continues to exacerbate the existence of child independently verified cocoa but also ensures labor and deforestation in these communities. the farmer groups and farmers are paid a higher Our aim is to support cocoa farmers’ transition premium for their harvests. out of poverty, and we support development of Farmers receive direct cash payouts from the multiple opportunities to increase income and certification premium, which enables them to build resilience. reinvest in their farms and their families. At the group level, the certification premium is used to further strengthen the resiliency of the group as a whole through investment in shared equipment and capacity building, like training on climate-smart cocoa techniques and income- diversification opportunities.