Defying Destiny: Giving Indonesia’s Farmers a Fighting Chance to Succeed
By birthright, Irvan Kolonos was assured an almost certain glide path to prosperity.
Born into a family of big business owners closely connected to Indonesia’s agricultural industry, Irvan graduated with an Economics degree from the University of Southern California. He was well on his way to a career as Chief Investment Officer of his family-related venture capital firm.
But while working at Japfa Comfeed, one of Indonesia’s largest agri-food companies, his career path took a turn. He began studying the economics of partnership programs that support local corn farmers, which often seemed to fail.
Irvan learned that the number of Indonesian farmers had decreased by 25% over a ten-year timespan and that 18 million smallholder farmers lived in poverty, earning only $48/month. “Why is Indonesia, a country rich in agrarian resources, spending over $2.7 billion annually to import basic food staples when these could be easily provided by local farmers who are struggling to make ends meet?” he asked at the time.
As he dug deeper into the economic infrastructure of corn farming, Irvan realized the informal system of lending that supported local farmers almost certainly guaranteed an endless cycle of poverty. Smallholder farmers lacked traditional goods that could serve as security for loans, forcing them to engage with traders for funding. Traders charged interest rates in excess of 30%, compelling farmers to sell their crops below fair market value. This made it impossible for Indonesian farmers to thrive.
“I recognized very quickly that without a viable alternative, the future of sustainable Indonesian corn farming was bleak,” said Irvan. So he walked away from a promising career in the family agri-business and began his entrepreneurial journey with an MIT program called Ideas Indonesia. There Irvan started to formulate a plan: he would combine his expertise in economics and business with social innovation theory to create a social enterprise that provided Indonesian farmers a fighting chance to succeed.
He named it Vasham. Translated from Sanskrit, it means empowering an individual to change his or her own destiny. “Vasham brings about revolution through innovative thinking to lift the lives of many poor farmers in Indonesia,” Irvan says. “A lot of people think about helping farmers, but we put thought into action. We created our own, much-needed revolution.”
Vasham’s mission is to empower Indonesian smallholder farmer communities to achieve significantly higher standards of living through increased income, lower risks, and continuous growth in technical expertise. Irvan quickly realized that to achieve this goal, he needed a framework for training his team in social innovation theory — a concept completely unknown in Indonesia.
While at MIT, Irvan was introduced to Acumen. He and his core group of four team members quickly became voracious consumers of Acumen Academy courses, completing 14 in 2015. “I completed my first course as I was starting my social enterprise, so even though I was familiar with business and start-ups, I definitely was not experienced with social innovation,” Irvan adds. “The first course we did as a team was Human-Centered Design (HCD), as I believe that design thinking is the only way that makes sense to create products and services that our customers (farmers) really want.”
Irvan relied on HCD as a gateway to teach his team about design thinking. The team loved the experience, taking what they learned one week and applying it in the field the next. Irvan credits the HCD course with inspiring his team to travel to Sumatra and Java, living with farmers to learn first-hand about their challenges.
“We decided to go down to the villages and meet with the farmers. We met their families and stayed in their homes. This was a pivotal moment for us, as we came to grips with the complexity of Indonesian farming.”
Irvan and his team found other Acumen Academy courses valuable during the early days of the organization, including Lean Start Up, Marketing to the Bottom of the Pyramid, Financial Modelling for the Social Sector, Lean Data and Scaling Smart. “All of the courses were helpful in providing us structure for how to move forward. My absolute favorite was Scaling Smart. Lean Data was also great as it helped us develop a strategy for how Vasham can collect and use data to measure impact, given our unique business model,” he adds.
What started with a handful of dedicated staff in 2013 is now a thriving organization of 220 people. Vasham has successfully partnered with over 8,000 corn farmers, providing $4 million worth of collateral free loans, crop price protection, access to good seed and pesticides, ongoing training and technical support needed to maximize crop yield. Recently, Vasham built its first grain elevator, allowing the organization to offer a completely closed loop profit sharing business model for participating farmers. Vasham’s goal is to empower 100,000 smallholder corn farmers by 2020. “Our plan is to drive future growth by always innovating to improve profitability for farmers,” says Irvan.
“We are very appreciative and extremely proud that people who normally live in the city have come down to the village to help the farmers. I’m very grateful to Vasham,” says Pak Suwadi, one of the many Indonesian smallholder farmers who have benefited from a partnership with Vasham.
In 2015, Irvan was recognized as EY Indonesia’s Social Entrepreneur of the Year. He is one of a growing number of Indonesian philanthropists who are leveraging family resources and their own experiences to improve the economic prosperity of their homeland.
