Stanford Social Innovation Review / Winter 2016
! FIELD PROJECT: Two
photograph courtesy of saemaul creating shared value
13
Profiles of innovative work
Revitalizing a Village
A community in rural Vietnam has become the site of a project that
seeks to export a successful South Korean development model.
By Tai-Young Kim & Yoo-Jin Lee
H
oang Ha Jo Ngo, a farmer and
a father of three, lives in Tam
Ngan village, located in the Ninh
Thuan province of V ietnam.
Back in early 2014, he was in a state of de-
spair. His farmland was severely distressed:
It suffered from nutrient depletion and from
an unstable water supply that resulted from
a break in the irrigation pipeline to his farm.
I tried everything. Since I had no money,
I took out loans, Jo Ngo says. He used the
loan money to buy fertilizer and high-quality
seeds. Still, he recalls, the quantity and
quality of my corn did not meet the market
standard. All I had left was the debt, which
was the size of my annual income.
Then, in April 2014, Jo Ngo heard that
a chili pepper farming project would soon
start in Tam Ngan. He volunteered to take
part in a pilot phase of the project. This was
my critical chance to break free from the old
pattern of taking out loans every season and
just waiting for the crops to grow, without
knowing what else to do, he says.
The project, called Saemaul Creating
Shared Value, is a collaborative effort by three
large entities: CJ Cheil Jedang, a Korean
food company; the Korea I nternational
Cooperation Agency (KOICA); and the gov-
ernment of Vietnam. The goal of the project
is to reduce extreme poverty in Tam Ngan by
working with farmers to establish red chili
pepper farming. CJ Cheil Jedang provides a
ready market for that crop, and its involve-
ment in the project reflects a commitment
to the shared value model of economic de-
velopment. In that model, created by Michael
Porter and Mark Kramer, companies follow
a strategy that embeds social value creation
in their business operations.
A crucial feature of the project is the use
of methods borrowed from the Saemaul
Movement, which f lourished in South
Korea in the 1970s. The Saemaul model
aims to revitalize rural areas by providing
farmers not only with practical improve-
ments and technical training, but also with
motivational education and other, less
tangible forms of support. The purpose
of these efforts is to
awaken a produc-
tive, can do
farmers tend to chili pepper
crops near Tam Ngan village
in Vietnam.
spirit in people who have been worn down
by poverty.
By participating in the project, Jo Ngo
has learned new farming techniques and
cultivated new habits of self-reliance. He has
talked with a farming expert about fertilizer
choices, about managing water use, and about
the growth rate of different chili seed varia-
tions. Through training sessions offered by
project organizers, he has changed his work
routine and now starts each day with a morn-
ing checkup of his farm. Each week, he takes
part in a village-wide discussion that covers
topics that range from farm labor coopera-
tion to the creation of a village fund to pay
for local improvements.
The Saemaul Creating Shared Value proj-
ect in Tam Ngan is still at an early stage, but
already it has changed villagers lives. One
day this past May, Jo Ngo conducted his reg-
ular morning checkup. He gently examined
the red chili pepper crop that he was now
growing. As he saw red juice flow from a ripe
pepper, he had a clear sense that his work on
the crop was paying off. For the first time in
his life, he says, he was glad to be a farmer.
A SHARED SOLUTION
Ninh Thuan province, with a per capita gross
domestic product of $1,038, is one of the poor-
est of Vietnams 63 provinces. In Tam Ngan,
which is home to about 1,150 people, the level
of poverty is especially stark.
The average
14 Stanford Social Innovation Review / Winter 2016
Tai-Young Kim is professor and vice dean at the
Sungkyunkwan University Graduate School of Business
(SKK GSB) in Seoul, South Korea.
Yoo-Jin Lee is a research assistant at SKK GSB.
annual farm income in the village is about
$235that is, about 64 cents per dayand
more than 46 percent of the population is
below the national poverty line. In Vietnam
overall, meanwhile, the percentage of people
who live below the poverty line has fallen
from about 60 percent to about 20 percent
over the past two decades.
The persistence of extreme poverty in
Tam Ngan is largely attributable to its low
agricultural productivity. Instead of using
tractors, farmers rely on bovine and human
labor. Broken irrigation facilities result in
irregular farming, inefficient land usage, and
low-quality crops. Fertilizer use is rare. As a
result of these deficiencies, farms in Tam Ngan
produce one ton of rice per hectare. Farms in
South Korea, by comparison, produce six to
seven tons per hectare. In addition, the village
has no agricultural cooperative: Farmers must
market their crops on their own.
So Tam Ngan has an acute need for as-
sistance in developing its agricultural sector.
At the same time, CJ Cheil Jedang faces an
emerging crisis in its sourcing of a critical ag-
ricultural product. Chili pepper, an important
ingredient in Korean cuisine, is CJs third-
most-purchased agricultural input. China
has long been the companys main supplier of
chili pepper, but in recent years increasing la-
bor costs have made that source more expen-
sive. CJ leaders also have concerns about the
use of pesticides on Chinese farms. In looking
for an alternative source, they have fastened
their attention on Vietnam. CJ and its parent
company, CJ Group, already have extensive
operations in that country. In addition, the
region that includes Tam Ngan village has a
good climate for chili pepper farming.
By investing in Tam Ngan, CJ leaders
aspired to maximize both social impact
and business impact. But CJ did not have
the resources on its own to develop the vil-
lages potential, so the company partnered
with KOICA and with the Vietnamese gov-
ernment. CJ is helping to build up agri-
cultural infrastructure and to update the
use of technology in the village. Through
a contract farming arrangement, CJ also
guarantees that it will purchase the chili
pepper harvested in Tam Ngan. KOICA is
deploying its expertise in project manage-
ment and in the development of Saemaul-
based community-building practices. The
Vietnamese government provides staff sup-
port and works to clear legal and bureaucratic
obstacles. Expenses for the project through
2017 total $1.7 million, and CJ and KOICA
each plan to contribute half of that amount.
Managing a complex project of this kind
entails real challenges. Consensus is difficult
in a situation involving multiple stakeholders,
all with different principles, says Ji Young
Kim, a project manager for Saemaul Creating
Shared Value. Nonetheless, partners in the
project are keeping their focus on the big pic-
ture. Sourcing chili pepper from Tam Ngan
is not CJs final goal, says Heekyung Jo Min,
vice president of CJ. Sustainable value is
possible only when the farmers have a strong
desire for a better life. At CJ, we will support
the village beyond CJs business needs.
AN EDUCATION IN EMPOWERMENT
Jin Cheol Jeon, senior vice president of the
CSV (Creating Shared Value) department
at CJ, recalls his early encounters with the
people of Tam Ngan: At the beginning, the
villagers did not think that they were entitled
to healthy and happy lives. They just accepted
the given conditions of life, without trying
to make changes. A lifetime of poverty, in
other words, had deprived villagers of the
ability to develop self-reliance.
Thats where the Saemaul model comes
into play. The term saemaul combines
two ideas: progressive renewal (sae) and
regional and social communities (maul).
The Saemaul Movement in South Korea in-
corporated poverty eradication, rural mod-
ernization, and attitudinal change. As a first
step, movement organizers would make no-
ticeable changes in a communityroad im-
provements, for examplein order to instill
in residents a sense that revitalization was
possible. Next, organizers would encourage
farmers to join commercial farming projects
that would lead them to boost their produc-
tivity. Alongside those efforts, the move-
ment puts a premium on using motivational
education and group discussion to foster a
we can do it outlook.
The impact of the Saemaul Movement
was striking. From 1970 to 1979, the average
farm household income in South Korea rose
from $825 to $4,602. Such achievements have
sparked efforts to apply the Saemaul model
more broadly. In 2011, for instance, the World
Food Programme entered into an agreement
with the South Korean government to spread
the model to developing countries.
The move to bring Saemaul methods to
Tam Ngan has been under way for about a
year. In October 2014, villagers formed a
Saemaul Committee and named the head
of the village as its leader. They also started
four community groupsone group each
for farmers, wives, young people, and elderly
people. In the same month, Saemaul special-
ists from South Korea began holding Saemaul
education sessions. In these sessions, villag-
ers learned about conducting a group discus-
sion, managing a cooperative unit, and other
topics. Saemaul education [reveals] power in
us that we were not aware of, says Khiet Ha
Da Droach, a Tam Ngan villager who leads
the youth group. Ohoon Kwon, a Saemaul
specialist, explains the ambitious vision that
lies behind the Saemaul model: What we are
hoping for is a small change that will [inspire]
the rest of the village. We believe that change
in one villager at a time will build a village-
wide transformation.
Signs of that transformation are now
visible in Tam Ngan. In 2014, the Saemaul
Creating Shared Value project helped fund
and implement renovation of a preschool
and a community center. In 2015, the village
elementary school underwent an upgrade.
Efforts are also under way to improve irriga-
tion systems and to develop other aspects of photograph by mary altaffer/associated press
agricultural infrastructure.
Villagers like Jo Ngo present signs of
change as well. He now displays an optimistic,
forward-looking attitude. I wish to pay off my
loans, and I wish for a better life for my chil-
dren and the whole village, he says. We are
saving our crops to raise a village fund, help-
ing out on neighbors farms, and discussing
ways to improve the future of our village. n
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