Entrepreneur Unleashes Latent Power Of Local Markets
Farmer uncomfortable knowing middlemen were profiting handsomely
Working as a cashew farmer in central Cambodia, In Laihout, 40, was uncomfortable with the fact that most of her crop was being exported to Vietnam where it was being processed and then on-sold by traders to bulk buyers at a significant profit.
Because there weren’t many processing centers in her low-income region, farmers like her were selling their cashews for small margins, only to see these foreign traders capitalize on their hard work and lack of local value chains.
But instead of accepting the situation, Laihout decided to start her own cashew collecting and processing business, initially working through a farmers’ association and community processing center in her village in Kampong Thom province, paying local farmers a fair price for their product and processing it herself.
Despite reaching middle income status in 2015, the World Bank says COVID-19 severely impacted the Cambodian economy, which contracted by 3.1 percent in 2020, its worst performance since 1994.
Like most Cambodians, Laihout struggled during the pandemic as a lack of working capital limited her purchasing power during the harvesting season. The budding entrepreneur also said it was challenging to ensure cashews of consistent quality and quantity were being supplied.
Undeterred and willing to disrupt traditional gender roles, Laihuot attended a short training hosted by USAID-funded project, Feed the Future Cambodia Harvest II - led by Abt Associates and supported by iDE and Emerging Markets Consulting between 2017 and 2022 in Pursat, Battambang, Siem Reap, and Kampong Thom, among other provinces – on cashew pest and disease management.
After applying the techniques she learned, Laihuot saw improvements with her own harvest, and recognized an opportunity to help train local farmers and strengthen her processing business at the same time. Laihuot then worked with staff from Harvest II to grow her network of cashew suppliers, expanding from a single village to three districts, and to improve her supply chain management skills.
She began collecting information from her producers related to their production capacity and expected yield, and now pays premium prices for premium products to encourage farmers to improve their harvests and post-harvest handling. The lengthy processing involves drying and then deshelling the cashew nuts.
“In previous years, farmers would always bring products with some unripe cashews, some overripe, some still attached to the fruit, some covered in dirt,” Laihuot says. “But this year, they wash and clean their cashews, and if I cannot go collect them right away, they have started drying them, too.”
She also received a grant from Harvest II to promote the Cambodian cashew nuts to international markets through contract farming with cashew producers, processing cashew, and establishing food safety standards which are recognized by importing countries.
Responding to a lack of coordination in the local agricultural market, under Harvest II iDE staff helped facilitate a market-based approach, building capacity and market linkages, bringing together market actors – producers, input suppliers, financial institutions – across four commodities: vegetables, mango, longan, and cashew.
Harvest II has worked with hundreds of private sector actors, powering them to expand their businesses, establish relationships with their commercial partners, and contribute to system-level change. The project has also helped market actors work together to improve productivity, enhance supply chain management, and meet export requirements.
iDE Cambodia country director Kevin Robbins said the market-based approach – similar to all iDE’s work in Cambodia – was designed to find solutions to enduring challenges related to input supply, value chain creation and a need to make loan products available to everyday people.
“We engaged with hundreds of private sector players, powering them to expand their businesses, establish relationships with other market actors and, ultimately, contribute to system-level changes,” says Robbins.
According to USAID, the highly successful project generated $28 million of new private sector investments, created more than 2,500 jobs, supported the development of 17 agriculture policies, and helped horticultural businesses and producers generate over $75 million of incremental sales.
“Harvest II partnered with Cambodian agribusinesses, producers, and government counterparts to develop 140 new agricultural products for domestic and international markets,” said Ms. Nancy J. Eslick, USAID/Cambodia mission director.
“We are proud of the real progress we made to reduce poverty and promote sustainable economic growth.”
Laihuot says it’s not just for her own benefit that she works so hard. Her processing business is oriented towards providing employment to others in her community – especially women, who make up 70 percent of her staff, and who, Laihuot says, are uniquely impacted by limited employment opportunities in their communities.
“I run this business through an aspiration to help the community – I don’t want to profit only for myself. I want other farmers to profit just as I do,” Laihuot says.
That’s why she’s also helping her producers to improve their yields. After joining a business-to-business workshop organized by Harvest II last year, Laihuot connected with VT Grow Co., a specialized input supply company, and joined a technical training in her district on the proper application of inputs for pest and disease management.
She subsequently shared what she learned with her farmers to help build their capacity – and her business as well.
By partnering with entrepreneurs like Laihuot, Harvest II helped Cambodians capture value-added opportunities for local horticultural products as well as bring new jobs to rural areas.
As a result of her efforts and improved collaboration with her farmers, Laihuot was able to collect a total of 57 tons of cashew in her first year of business. The next season, after securing a loan with help from Harvest II to increase her access to working capital, she bought and sold twice as much and has since built a storage facility to stockpile cashews for year-round processing.
iDE is a global development organization dedicated to ending poverty. We believe the market offers the best way to incentivize people and find sustainable solutions that can be passed down through generations.
Learn more about iDE’s approach and our efforts to power resilient market ecosystems here.