Michael Roberts is Country Director of IDE Cambodia. In May 2010, IDE Cambodia was awarded the first Nestlé Prize in Creating Shared Value for its innovative Farm Business Advisor (FBA) project, which aims to improve the living standards of the country’s rural population by increasing agricultural productivity and income. Here, he explains some of the ideas and background behind it…

Agriculture in Cambodia is at a very basic level with some of the lowest yields in the region. Consequently even very simple improvements in the quality of inputs or cultivation practices can have a big impact on productivity. Since the mid-1990s, we have been working to help Cambodian farmers increase their incomes. We began by introducing small-plot irrigation devices like foot powered treadle pumps and low-cost drip irrigation systems.

Incomes improved but even when their water constraint was solved, farmers would quickly run into another wall, which would limit profit. We spent a lot of time listening to them and found that to get the maximum benefit from better water control they needed to be able to access a more integrated package of agricultural inputs and advice.

Originally, we used our staff to deliver these services but then we realised that if a few inputs and a little advice could create significant value for small farmers then there must be a viable business in there somewhere. In 2005, we began to train and support a network of small rural entrepreneurs to become Farm Business Advisors (FBAs), selling a range of products and services to help small-scale farmers improve their farming techniques and income.

The surveys we have conducted with FBA clients demonstrate that on average, their income has increased by about USD 150 per year. This is a significant change in areas where cash income in an average household is only about USD 30 per month. The average monthly income for an FBA is currently about USD 60. This has been increasing month by month but is still too low given the amount of work they do. For now, most FBAs are content with this because of the high value that they place on the training that they receive. In the long-term, we estimate that FBAs will be able to make more than USD 200 per month as their client base, range of products, and experience grows.

IDE differs from the traditional NGO model in that we take a market-based approach to all of our projects. We treat people as customers, not beneficiaries. This simple change in perspective has profound implications on how we work. If I have to convince someone to purchase something, then my success is absolutely dependent on listening to them, understanding them, and responding to their highest priority needs.

This also means that we don’t provide direct subsidies to our customers. If we have done a good job of listening to their needs (including that for affordability) then even very poor people will be able to purchase items that improve their well being.

The Nestlé CSV Prize will help us to expand the current project, adding an additional 36 FBAs toward our ultimate goal of more than 500. We will also be leveraging the Prize to attract additional funding from several donor agencies that are planning substantial investment in the agriculture sector in over the next several years.

Once the project reaches the scale of 500+ FBAs, we expect that the franchise enterprise will be able to operate independently without additional donor funding. As we move from a successful pilot into a scale up phase we expect a number of challenges.

For instance, the FBAs have seen a rapid growth in clients over the past dry season. To ensure that most of these become repeat customers, the FBAs must find the right balance between client numbers and the amount of follow-up service that can be provided to ensure that the clients are successful.

Creating Shared Value is the very heart of this project. FBAs work with their farmer clients to increase agricultural production and improve incomes. If the farmers are successful, the FBAs are successful. If the FBAs are successful, the franchise enterprise is successful. The system flourishes only if there is real value being created at the farm level.

— Michael Roberts, Country Director, IDE Cambodia

Users and schematics for the award-winning IDE Easy Latrine. Photos courtesy Jeff Chapin and IDE Cambodia.

What do a consumer technology product, an ecologically responsible laundry detergent, and a simple design innovation for an age old product have in common? They were all selected as winners of the prestigious Best in Show Award at the 2010 IDEA Awards for international design excellence.

Latrines are a decidedly unsexy topic, more likely to induce uncomfortable giggles than provoke innovative thinking. People in the developed world take access to sanitation for granted. Yet in most of rural Cambodia, lack of adequate sanitation causes more deaths than HIV, malaria and tuberculosis combined. Despite this fact, many villagers view purchasing sanitation equipment as an unnecessary luxury, partly because of the expense and difficulty of installing traditional latrines.

Jeff Chapin, a designer on sabbatical from IDEO worked with our IDE Cambodia team to tackle the problem. The solution? A low-cost sanitation system that villagers could build themselves using cheap, locally available materials. Each latrine costs about $25, and more than 2,500 have already been purchased and installed by villagers.

2010 IDEA Awards Gallery

Fast Company story

Best in Show judges video at fastcodesign.com

The prize of 500,000 Swiss Francs (about $433,050) will improve the project by recruiting and training an additional 36 advisors, generating approximately US $1.9 million in new income to positively impact 20,000 people in more than 4,000 rural households across Cambodia.

Nestlé Chairman Peter Brabeck-Letmathe, who presented the award to the IDE, said: “We congratulate IDE Cambodia on being the first to be awarded the Prize. The work they do is inspirational. The support and training from IDE ensures that all involved work together to create sustainable farming enterprises.”

Accepting the award, IDE Cambodia Country Director Michael Roberts said, “It is an honor to receive this recognition from Nestlé. The prize will help us further IDE’s mission to create income opportunities for poor rural households. We hope to leverage the Prize to reach more than 75,000 rural Cambodian households in the next few years. On a global scale this is still very small but we think there are big implications in what we are learning.”

The CSV Prize – which received more than 500 applications from 79 countries – was awarded during Nestlé’s Creating Shared Value Forum, an international gathering of leading experts in water, nutrition, rural development, and the role of business in society which took place in London on 27 May. The Prize was created to provide financial support of up to 500,000 Swiss Francs to individuals, NGOs, or small enterprises who offer innovative solutions to nutritional deficiencies, access to clean water, or progress in rural development. The prize money will be disbursed over a three-year period to assist in the scaling-up of the project.

Learn more about IDE’s Farm Business Advisor Program.

Watch Nestlé’s video on the award below.

IDE runs a small factory for producing these affordable water filters here just outside the town of Kampong Chhnang in the province of the same name. SInce Kampong Chhnang is pretty close to the center of the country, it makes sense for distribution, but the province has also long been known for the ceramic vessels it produces. In fact, IDE’s filter factory is just down the dirt road past the area’s “pottery village” where tourists are sometimes taken to view the local ceramicists’ techniques and styles.

We’ll have two days of shooting at the factory and around the villages in the area, looking for random houses that have a CWP visible from the road (or path) and asking the residents how they like their CWPs. Certainly nothing as effective as a few old-school testimonials to help sell “product,” especially when the people are real and the product is a genuinely valuable tool that directly addresses a household’s health and productivity.

What would be the equivalent product here in the US? Something that saves a significant amount of time usually dedicated to gathering fuel and tending a fire for boiling, lessens smoke pollution in the house and the rest of the neighborhood, decreases cases of water-borne illness by more than half, and costs maybe four or five days worth of personal income. A bicycle? That’s getting to be the closest equivalence here with the cost of gasoline these days, but it pointedly leaves out the water-borne illness issue, especially as it affects children. Since we’re not nearly as attuned to clean water issues in our daily lives here, what would be the equivalent concern? And, if we can’t readily imagine what that might be, is the world headed not closer to a global culture, but further from it? Discuss.

— A.G. Vermouth, IDE Director of Communictaions