Corporates collaborate to transform rural livelihoods

Nestlé and Novartis collaborate to improve the livelihoods of coffee farming communities in Kenya. From 21 to 24 September WBCSD hosted a field visit to share lessons learnt and inspire member companies to join the initiative.

Published: Tue, Oct 10, 2017
Author: Davide Fiedler
Type: Insight

More than 3.3 billion people live in rural areas. This is 46% of the world’s population –but more than 70% of the world’s poor. They have few economic options and limited access to education and training, improved water sources, modern sanitation, safe and reliable energy, health care, credit and other financial services.

When four years ago Nestlé called for other WBCSD members to assist them in improving the livelihood of rural communities in Kenya, and coffee farmers specifically, Novartis answered the call, creating the first cross-industry business-to-business collaboration to make rural areas more attractive places to live, work and invest in.

From 21 to 24 September 2017 WBCSD hosted a field visit with the objective of sharing experiences from the first round of the Rural Livelihoods Initiative (i.e. the collaboration between Nestlé and Novartis) with other WBCSD member companies, provide an opportunity to join the collaboration in Kenya as additional service provider, or catalyst, and to inspire members to replicate the collaboration model in other regions.

Thursday, 21 September, Nairobi: Renewable and reliable off-grid energy

The first day we visited the International Committee or the Red Cross (ICRC) Logistics Centre in Nairobi. The ICRC recently commissioned ABB – a major Swedish-Swiss electrical equipment company - to install a solar-powered off-grid energy solution on its premises. The installation allows the ICRC Centre to ensure its operations continue running in case of power outages. Besides energy for office needs, this ensures drug and medical equipment stocks remain at the required low temperature in case of blackouts, thereby avoiding the loss of essential medicines.

Friday, 22 September, Karatina and Karithathi: Sustainable coffee farming

The second day focused on activities relating to Nestlé’s operations, supported on the ground by Coffee Management Services (CMS) – an agribusiness service provider contracted by Nestlé. This included visits to the Central Kenya Coffee Mill (CKCM), the Karithathi Farmer’s Co-operative Society, a wet mill and interaction with two farmers on their fields and home.

We learned that they face several farming-related challenges:

While coffee is a premium crop, it is harvested only twice per year, hence providing only occasional income; tea plants are increasingly complementing coffee, as tea provides a more stable, monthly income;

  • Climate change is increasingly responsible for pre-harvest losses, as coffee production depends on a balance between dry and rainy seasons, but these are becoming more and more unpredictable;
  • Especially small-scale farmers lack irrigation capacities and technologies;
  • The need for agricultural inputs is increasing their cost of production;
  • Inappropriate infrastructure and long distance to coffee processing facilities create high transportation costs: Before the establishment of a local mill (that halved the travelling distance), some coffee farmers were travelling as far as 300km to deliver their coffee for processing.

To address some of these challenges, CMS provides training and in person support through locally based agronomists. Besides training measures, peer learning among farmers has been proven to drive uptake of improved farming practices, especially when these lead to tangible results such as improved production and higher income. 

Saturday, 23 September, Karithathi: Access to health for rural communities

The last day provided insights into Novartis’ Social Business operations at a local school, where a health camp was set up to provide access to healthcare services, including health education, general medical consultation, cancer screenings (cervical, breast, prostate), voluntary HIV counseling and testing, and a pharmacy. 

Each patient pays a fee of 200 Kenyan Shillings (approx. 2USD/ 1,60EUR) for the health camp, which covers any consultation, screenings or required drugs. Necessary follow-ups and more sophisticated treatments are referred to the respective public health facilities.

If farmers don't have cash at their disposal to pay the required fee, they can mention their affiliation with the Karithathi Farmers’ Co-operative Society and get immediate access to the healthcare services. Novartis recovers the fee from the cooperative, which in turn deducts it without any additional charges from the payout for the farmer’s coffee at a later stage. 

WBCSD strongly believes there is untapped potential to create additional value for rural communities and businesses through this type of business-to-business collaboration. We are hence inviting companies to

  • join the existing collaboration in Kenya, bringing to the mix their own business solutions to address areas such as food insecurity, access to healthcare, safe water, sanitation and hygiene education (WASH), or access to energy (for household or productive use); or
  • replicate this collaborative model in other regions.

We are also integrating the Rural Livelihoods Initiative into a wider WBCSD Social Impact project on “B2B Collaboration for Impact”.

The B2B Collaboration for Impact model is based on three main actors coming together:

  • Anchor companies – companies that are operating in target areas as part of their business value chains and are seeking to strengthen them.
  • Service providers – companies who offer products and services to improve livelihoods through inclusive business solutions. These companies are seeking anchors to de-risk their efforts of growing markets and sales in the target areas.
  • Catalysts – organizations that share insights and support collaboration on the ground.

In early 2017 WBCSD released a case study sharing the experiences of the collaboration between Nestlé and Novartis and showing that B2B-collaboration can make a real difference in the livelihoods of rural communities in a holistic and sustainable way.

The key takeaways of the study highlight the necessity of a strong business case for each company that is involved; the importance of solid data, from baseline to performance management; and the need to strike a viable balance between costs, complexity and value creation. Rural development is a complex challenge with no single solution. A spirit of exploration, learning and exchange has proven essential to a successful collaboration.

For more information and if you are interested in joining or establishing a B2B Collaboration for Impact, contact Davide Fiedler, fiedler@wbcsd.org