We often work with the private sector in Cambodia because they play an essential role in agricultural systems, selling necessary inputs like seeds and fertiliser and buying farmers’ outputs like rice and vegetables.
Sustainability is another reason, as businesses typically remain in communities well beyond the life of any aid program. Also, by working with companies, CAVAC can indirectly reach a much larger number of farmers, achieving better value for money.
The business innovation Fund
CAVAC supports companies that are trialing new business models, services and/or technology through the Business Innovation Fund (BIF), if these activities may lead to innovations that help farmers. CAVAC is willing to co-invest in these activities provided that certain conditions are met.
CAVAC identifies the business sectors with the potential to help farmers and welcomes applications from companies working in these sectors. CAVAC also encourages multiple submissions from separate companies.
Final approval depends on a proposal showing sufficient quality and commitment. Quality is assessed by an evaluation panel and commitment is assessed by the level of contribution proposed by the company.
Learning to listen to farmers
Three years ago, Tann Phalla, a Sales Manager for Papaya Company joined 12 other fertiliser sales representatives at a training course on rice production, and how to sell their products.
Phalla said that the main thing he learnt was that more fertiliser could be sold if companies build relationships with their clients and share information.
‘We changed our sales strategy. CAVAC taught us to listen to our customers, not to compete just on price. By giving advice and helping farmers improve their yields, we can sell more of our products,’ said Phalla.
After completing the course, Phalla said he would train his subordinates on the proper use of fertiliser and use the knowledge from this training to coach his retailers.
Data from CAVAC shows that by simply using fertiliser the right way, farmers can increase yields by 10 per cent. When up-to-date advice on fertiliser use is available to farmers, more and more farmers are likely to turn to retailers and fertiliser companies for more advice.
Keeping a competitive edge
When Yim Sarith first started as a Sales and Marketing Manager for Lay Seng Fertiliser Company, he knew very little about sales or fertilisers.
Sarith said he heard about CAVAC from some retailers and approached them to learn how to expand his company’s information services.
CAVAC helped the company train their staff in rice production, fertiliser use, and their capacity to deliver effective information services by engaging with farmers at meetings and field demonstrations.
With increased sales, the company recruited two more technical staff and have bought a car for their extension work. Lay Seng staff are now confidently managing field demonstrations and farmers’ meetings.
‘We were the first company to import fertilisers from Thailand. Now, there are another 14 companies also getting their products from Thailand,’ said Sarith, ‘As our competitors increase, we have increased the number of farmer meetings from 4 to 10 per month and now conduct 7 field demonstrations per year.’
Helping farmers by working with the private sector
CAVAC was the first agriculture program funded by the Australian Government Department of Foreign Affairs and Trade to apply a market development approach.
‘Our goal is to help the farmers and sometimes the best way to improve their incomes is to intervene with the suppliers further up the value chain,’ said Pieter Ypma, CAVAC’s Market Development Manager.
To measure the effectiveness of partnering with a company, CAVAC asks the farmers how the intervention is helping them. The interventions always include a co-investment from the company, usually at least 30 per cent. The willingness of companies to co-fund an activity indicates their commitment to deliver the agreed results.
Sustainability is a key feature of CAVAC’s implementations. While most donor-funded support is temporary, interventions in market systems via the private sector will continue to function well beyond the life of any single aid program.