WAGOEN story no.3: The strength of Wagoen, its structure and culture.

I am so sorry for the people who is curious about Japanese farmer’s enterprise, Wagoen. I had been away for a while and didn’t updated since the beginning of Aug this blog. I will add more things today about Wagoen, since I haven’t disclose its real strength yet.

On the bus going around Wagoen’s site, we talked with the staff of Wagoen, discussing about its strength.
“Please give us the brief structure of Wagoen system.”
“OK, the Wagoen is composed of 2 structure. One is Wago, and another is Wagoen, and those are different entitites. Wago is the corporative of farmers, and Wagoen is the supporting entity for it, by doing some administrative or marketing, business development.”
According to the Wagoen staff, the Wago is composed of more than 50 farmers, and they are devided into several groups aligned with the crops they produce. Each crop has each taskforce, and they are learning by themselves how to produce better crops or vegetables, how to integrate the latest methods into their operation fields, how to make a brand of themselves, and how to appeal to the urban market. All learnings are shared and developed by farmers themselves. No one is teaching them to do so. They spontanuously began to do it. Now it became the core of its system, but this committee decide the standard of quality of products which is crucial for Wagoen’s brand. Sometimes, their standards are much higher than the ordinary products in the market. But it was decided by the farmers.
The staff said, “Farmers know the better than anyone else about farming.”

We asked, “so what is the WAGOEN entity’s role?”
“Well, it is the company, not agricultural corporative. So, the company is making the environment that farmers in the corporative can comfortably work and produce as much as they can. Sometime, Wagoen company side will help them in terms of finance as well.”
We asked.” So, for example, does it mean Wagoen company do some Microfinance?”
“Hmm, we cannot say it’s categorized as Microfinance or not. but, for example, when Tsunami happen in March, this area (Chiba Prefecture) was affected by its market’s rumor that the soil here was polluted by nuclear radiation. So the sales are going down and the farmers were suffering for long time after that. Wagoen entity had supported them from its fund (which is always functioning as social fund from each farmers) to survive the long down-turn period by covering its cost for recovery.”
It’s totally the same system as I had been observing in Africa (especially rural area in Ghana I visited), India or Bangladesh. The Merry-Go-Round or Social Fund / Group lending system that works in developing countries here in Japan have another form of funding with business entities (much more aggressive business activities) works as a insurance or safety net for their living. Without any intervention by NGOs or governmental policies or initiatives, but from their spontanuous demands, the farmers and Wagoen system required to develop its funding system.

Japan had long the system called “KOU”(講)or “Mujin Kou”,(無尽講)”Tanomoshi Kou”,(頼母子講)”Moai / Muei” (模合)which is another type of microfinance since 12th century, which was developed in self help groups among the people, based on the religious/ geographical community. Self help system is very strong in Japanese history, and Wagoen had revised its culture into their business activity naturally, (as far as I think).

Wagoen had devided its body into 2, which is really interesting to me. Self help group sometime has its difficulties to develop as a independent business group, since it has a lot of complicated human relationship inside (which always easily connect with hierarchy or corruption and younger innovative generation suffers from it), but those 2 were separate in terms of exercise of its power. So, the Wago will work as purely self help group, and literally they self-help themselves to improve their productivity aiming higher and higher. The Wagoen purely work as a supporting business entity. But still, those two are connected in a way of human touch.

The system is not fixed or ruled. They will change by the hands of farmers. But the Wagoen it self will last long. This flexibility is another key that Wagoen can get along with many farmers with different ideas, and even attracting more talented people to come into their space. The natural born open source innovation space is there.

I will continue my next article to write more about the fanatical innovation that Wagoen is pursuing, which looks crazily innovative but we cannot help getting more and more excited about them.


WAGOEN story2: What we can learn from WAGOEN

What I was most interested about WAGOEN was its collective fund to invest in the community. WAGOEN doesn’t claim themselves as “social” company or “microfinance company” or what ever related so-called social business these days, but their original principle is simple and sticking to the core of community, which is all the time refrained in social business sphere.

The first idea of WAGOEN was from the founder’s idea of “how to utilize the wasted products to add values for selling”.
In Japan, the shape of vegetable matters a lot and the consumer won’t buy it if the vegetables are not in good shapes. They are disposed as waste even though they have equivalent nutritious value.

So Mr. Kiuchi thought, how can such a poor farmer utilize the wasted crops or vegetables to sell more?

What do you think if you are a poor farmer, a son of famer’s family without any asset……? You are not the person from aid agency or NGO, but imagine when you are the person who is suffering this problem. How can you think of the idea, out of box?
What is your break through you can make?

Then Mr. Kiuchi started to call other farmers nearby, like “do you have onions?” He has wasted carrots in his hand, and why did he call others?

He would think of matching this carrots with that onion and making a package for dinner….

In the end, he succeeded to aggregate wasted vegetables and cut them in pieces that is useful enough for cooking. He says, “if you cut it before eating, the shape doesn’t matter. So we need the processing facility in the village at first.”

He gathered the fund from other famers of long-time friends, to invest the processing facility and freezing. The cutting process is now operated by very skilled women in the village as a factory, and they are trained to cut and pack the vegetable accurately.

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They will make a combination of cut vegetables into “curry-rice” package, “hot pot” package, and many other cuisine style. They are proposing the package of ingredients for people’s dinner table.

This mix is sold very well in the market and also hotels or catering services likes to buy in bulk. So the facility will pay for its investment. and their development will continue.

 

If you think from the perspective of emerging country’s problem, you might easily say, “well, the consumer will buy wasted vegetables if it’s cheap, that is a big difference between Japan and us.” but the key point is not about how to utilize the wasted vegetables. Cutting them is not an unique idea at all. The way he achieved it is unique.

He aggregate the other farmers’ strength. He calls everybody in the village to unite. He knew the strength of each entrepreneural farmers. He motivate and ask others to be out of box. Gradually they trained themselves to the high level of qualified experts as a farmer, as a professional to cut and mix the vegetables. Their enthusiasm is not endless. They are aiming really high, even though they didn’t have much asset at the beginning.

The picture here will show you how professional they were in this factory. The factory is not big at all, but has enough facility and people works very hard silently in very professional moves. Every move that the trained women make will not waste any time, and they produce more than 1000 packs a day.

Who would’ve imagined that this small town has such a professional factory of processing? And it is not made by any big company, but by famers’ own asset, own ties, own trust.

I and other members from India were so impressed about their own study group. Autonomously, the farmers begun to make a task force team of each product and study in a group to catch the latest trend of market and agricultural production methodology. They set their own criteria according to their belief, which is sometime higher than the market’s criteria, and they begun to gather their efforts into gaining a BRAND. The farmers’ company became a national brand. And they started to call the experts and professors from outside to teach them or input much outer knowledge to them, which shows their endless passion to grow.
This passion was attractive to those experts, maybe. So there happens a lot of collaboration projects after wards. Those activities lead them to be a unique, “small giant” company which attracts many agricultural experts and business people from all over the world.

I got a news today that BRAC DAIRY got the first ISO certification in Bangladesh. Standardization and making a good brand under the certification. Typical path. That’s the same thing that WAGOEN did. But I was just thinking, what is the difference then?
I finally found that the farmers themselves own this company, and they are the founders. The motivation towards KAIZEN activities and aiming higher might be different. They never loose their tensions to be a better farmer with greatest products in the world. Well, to analyze my hypothesis, I would love to compare many more cases with WAGOEN from now on.

So, there are a lot of other outcomes from such farmer’s solidarity to study and aim higher. I will introduce much more surprising outcome in next post.

In next post, I will begin my story from TED talk.

To be continued…


WAGOEN story 1: been to the site of WAGO-EN in Japan

I spent three weeks in Japan recently work with my colleagues in my team and welcomed the Indian social company partners in Japan.

As we had discussed before in our project with Indian Social company Drishtee, the social companies regarding agriculture and farmers solidarity in Japan has something unique that we can learn about.
I insisted to take them to Wago-en, and (most of the group were a bit suspicious about what WAGOEN is in the beginning), but the trip to Chiba prefecture to see the WAGO-EN’s activity was incredible. It was much beyond that our expectations.

Wago-en was formed by one poor farmer, a son of farmer in rural area of Japan in 1991. The idea was not clear at that moment but Mr. Kiuchi who is the main farmer of founders tried “everything that will raise their income”. In the beginning, the farmers like Mr. Kiuchi’s family earned very little, because of their weak negotiation power, linkage to the market, and the attractiveness of products, etc…. His family found that their revenue is always less than their expenditure, and Mr. Kiuchi noticed that this is not going to last long. He graduated the college and came back to his house and finally decided to help the family out of poverty.

After a long continuous search for better way of producing, earning and selling, the Wago-en was autonomously formed with several farmers in Yamada town.

I saw the Wagoen documentary in NHK’s “Professional” TV program and was really shocked… What is this? Where is this? Who is this? and then finally got a chance to see their operation site at the end.
This is the company we should really connect any collaborators or friends in BoP spheres with… I was so excited to seek more opportunities to bring our partners into the site there.

Why was I so excited about? Why is it related with BoP business? What was the concept shared?….

To be continued to next post…..