Insight: a new approach to agricultural development

Sep 6, 2012
Hans Jöhr

By Hans Jöhr

At Nestlé we are well aware of the need to make sure that our operations have a positive impact on our suppliers and the communities they live in.

Rural development is one of the three priorities we have set ourselves for Creating Shared Value or CSV – our approach to doing business.

CSV requires us to look for ways to create value for our shareholders while also ensuring we create value for the communities in which we operate.

So what does that mean in practice?

Well, we source raw materials such as cocoa, coffee and milk from more than 680,000 farmers worldwide.

Sometimes, a lack of investment in the social and agricultural infrastructure in a region or country can make it difficult for farmers to supply us with high quality, safe and sustainable-grown crops.

“Extension services”

So, where we can, we try to contribute towards what those working in agricultural development call “extension services”, for the farmers who supply us.

This means providing people with the access to knowledge and information they need to increase productivity and establish sustainable production systems.

It also involves sharing knowledge from agricultural research with those who supply us.

Last year about 200,000 of our farmers received this kind of training in farming practices, post-harvesting and quality management.

Prize winning partnership

One of our partners, iDE Cambodia has shown what success a new innovative approach to extension services can deliver.

iDE Cambodia was the winner of our first Nestlé Prize in Creating Shared Value.

It recruits and trains rural business people to become Farmer Business Advisors who can then work closely with small-scale farmers in an area, and through that direct access, spread a better understanding of good farming practices.

The programme aims to help advisors become successful entrepreneurs.

They are trained for nine months in subjects including agronomy, sales, business and using their own ‘demo plot’ to illustrate their agricultural learnings and knowledge.

The advisors are also expected to develop entrepreneurial skills they can pass on to their clients, such as teaching the farmers how to generate a profit.

Sound results

The results speak for themselves.

Our investment helped iDE Cambodia to nearly double the number of advisors they have recruited and trained.

More than 100 of them are now working with 15,000 farmers. That has generated sales revenues for the farmers of more than USD 215,000 (about CHF 195,000).

Now it is easier for farmers to obtain technology they need to boost productivity too.

Products that used to be difficult to access at competitive prices are offered more cheaply through the iDE scheme.

They can get special bags to store harvested crops for longer periods, keeping them moisture-free without using chemicals or refrigeration.

There are also locally-produced ceramic water filters to remove harmful micro-organisms from water to keep crops and communities safe.

Replication in Africa

The success of the scheme is an important incentive for other farmers to take part.

This year another 140 advisors have joined the programme.

It is being extended to Mozambique and Ghana and we hope, in time, iDE can introduce this successful model elsewhere.

Beyond our supply chain

Partnerships like this help us towards our goal of maintaining a sustainable supply chain that also provides value for farmers and their communities.

I really believe this is more than just two organisations benefiting from knowledge transfer and expertise.

We are taking another step forward in agricultural development and making a positive contribution to the lives of the farmers and their families.

I look forward to working with the next winner of our Prize in Creating Shared Value, who will be announced in November.

Related link
The Chicago Council – Global Food for Thought blog

Hans Jöhr is Corporate Head of Agriculture at Nestlé, responsible for providing technical and strategic leadership for Nestlé’s worldwide agricultural material supply chain.

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