Agri-business Olam International has expanded and strengthened their supply chain by offering training, healthcare, and accessible finance to the farming communities they work with.
Good for society
- Farmers supported by Olam International have seen their net annual revenues rise from $200 in 2009 to $1,200 in 2015.
- The company has improved 610km of roads and built 12 storage facilities.
Good for business
- In six years, Olam International has increased its smallholder supply network from 3,000 to 19,569 farmers.
- By applying best practice processing efficiencies the company saved $460,000 compared with the previous season.
Agri-business Olam International's inclusive cotton business model in Cote d'Ivoire aims to tackle low productivity and social vulnerability among local farmers, poor infrastructure and access to markets and finance.
Société d’Exploitation Cotonnière Olam (SECO) trains farmers how to increase their yields, addresses low literacy rates and health issues in farming communities, and improves transport and storage. Olam's programme includes:
Tips from the company
Make sure you have field staff working closely with farmers all year round to offer timely advice, maximise local knowledge and show commitment.
Don’t just invest in your product; invest in the whole community behind the product to protect and strengthen your supply chain.
Make the most of partnerships to deliver your targets. They bring essential expertise, assurance and the ability to scale up.
Make sure you understand the context in which your suppliers are operating. A business decision that makes sense from a developed-world perspective may not necessarily work on the ground in a developing country.
Good agricultural practice is an amalgamation of adapting famers’ traditional techniques and bringing in modern, cost effective measures to improve productivity.
Farmer Business Schools with modules on nutrition and crop diversity
Training on climate-smart agricultural practices
Travelling ‘health caravan’ and HIV/AIDS awareness programme
Establishing 15 literacy centres
Distributing better varieties of seeds, subsidised fertilisers and pesticides distributed
Offering accessible finance options, including 0% microfinance
Improving road networks and building post harvest facilities such as warehouses.
SECO also gives farmers the opportunity to sell to a reliable buyer at a fair market price. Farmers are not obliged to sell to Olam, but many do as it provides protection from market volatility and fluctuating prices.
Thanks to Olam's programme farmer net annual revenues have risen from $200 in 2009 to $1,200 in 2015, 610km of roads have been improved and 12 storage facilities built. The company has also seen significant expansion of its supply chain. In six years, Olam has increased its smallholder network from 3,000 to 19,569 farmers.
Improving access to resources and developing skills
Olam distributed better varieties of seeds and financed fertilisers and pesticides during the cotton growing cycle. Additional inputs were also offered for farmers to grow maize for household consumption and to help diversify their incomes. A range of finance options were provided, including 0% microfinance plus financing for cattle and ploughs, and SECO also invested in improving road networks and building post harvest facilities such as warehouses.
Farmers were trained to reduce risks to crops from pests or poor weather. The team delivering the training, which grew from 35 to 135 people over five years, kept an ongoing record of each farmer’s operations such as land area, yields and loan repayments, to help track progress and mutually manage financial risks.
Fifteen literacy centres were established to improve reading and writing ability among farmers, while ‘Farmer Business Schools’ delivered by Olam’s field staff provided farmers with training in basic business skills.
Engaging and rewarding staff and beneficiaries
Olam was able to persuade farmers of the effectiveness of its approach through through meetings with village elders and co-operatives, plus word of mouth recommendations from Olam’s employees. As well as training programmes and day-to-day contact with field staff, SECO engages farmer cooperatives through an end-of-season fete with rewards and recognition.
SECO issues weekly and monthly newsletters to staff, with information on what is happening across the network. There is also an annual picnic and staff outing, annual dinner, Christmas celebration with gifts for children, and achievement awards for SECO staff.
What Olam International's Co-Founder said:
“Facing numerous challenges left by civil war, including unproductive land and a dearth of infrastructure, SECO (a wholly owned subsidiary of Olam), with its partners Compaci, CmiA and GIZ, have developed an inclusive business model that has enabled overlooked farming communities in Côte d’Ivoire to transform their livelihoods, while simultaneously growing Olam’s volumes, bottom line and customer base. By taking a long-term approach that addresses commercial, social and environmental needs, we have created a win-win situation for SECO and the smallholders. When they do well, we do well. We urge others to recognise the mutual benefits of such inclusivity.” - Sunny Verghese, Co-Founder and Group CEO, Olam International