As consumers increasingly want to know where the products they consume come from, exporting companies are responding in innovative ways. Using the latest technology, SAP Research and the African Cashew Initiative have devised a smartphone application to make traceability work efficiently and effectively for stakeholders.
Using smartphones, cashew buyers and sellers can trace supplies and track prices
In rural Ghana, a group of cashew farmers and local buyers huddle around a smartphone. With a tap of a finger, they access up-to-date market and price information. They are part of a pilot initiative, “Virtual Cooperatives,” the result of a partnership between the African Cashew Initiative and SAP Research to improve transparency and efficiency in the cashew sector through the introduction of Information and Communication Technology (ICT).
“The application means we cannot be cheated,” said Kwaku Adu, cashew farmer and chairman of the Wenchi Cooperative, a cashew farmers’ group in Ghana. “We know when we go to the buyer how much we are going to earn.”
The application also means buyers can clearly know where their supplies are sourced. The software simultaneously addresses the needs of both sets of stakeholders – buyers and sellers. SAP, the world market leader in business software solutions, developed mobile applications to support business transactions between smallholder cashew farmers, buyers and processors in rural areas.
Meanwhile, a new completely mechanized cashew processing factory is set to open in Techiman, Ghana (see video below).
The Virtual Cooperatives project piloted the software through the Wenchi Cooperative Cashew Farmers and Marketing Union in the Brong Ahafo region in northern Ghana. About 400 farmers in five participating buying stations have been registered in three months. Using the system, they have handled over 120 metric tonnes of raw cashew nuts – about 96% of total purchases.
The technology assigns each farmer a barcode that is tagged to sacks of cashews coming from his farm. At the central buying station, a smartphone with an integrated scanner registers the barcode, allowing the entire transaction to be tracked electronically.
The buying agent enters the weight of the sack into the mobile application, which uses a database of recent price data to generate the union price for the sack. The farmer receives a digital receipt of the transaction via text message on his mobile phone, and the data is also transferred to the farmer cooperative.
Sacks with barcodes are easily tracked with a smartphone application.
For smallholder farmers, the improved access to information means increased market power. Farmers no longer have to simply accept the price they are offered. With the smartphone application, farmers are assured of receiving a fair price for their produce that reflects the most current market trends. The improved transparency helps to raise farmer income and may induce farmers to grow the size of their operations.
Buying agents are also happy to use the system.
“The phone brings transparency to our working process,” said Ankuma Darko of the Painamisa Buying Station said.
The new system is making farmers more professional, too, said Yahya Abubaro, the union secretary. Before the pilot program, many farmers kept few records and struggled with accounting.
“Some farmers had no idea how much they produce or earn in a year,” Abubaro said.
The new software generates an accurate electronic record of a farmer’s sales, which may allow him to better plan for future seasons. This production track record could even be used as evidence to justify loans and get financing. The electronic aggregation of data about raw cashew nut supply will also improve forecasting for multinational companies and other players throughout the cashew supply chain.
The Virtual Cooperatives project improves the business operations of farmer cooperatives, a key mechanism for enabling better coordination amongst smallholder cashew farmers. At the Wenchi Cooperative, the central office now has easy access to farmer contact information, farm size, and production volumes.
“Previously I had to travel to every farmer every month and count his bags myself,” said Abubaro. “I like that I can now sit in my office and still know everything that is happening in my zones.”
Abubaro reports that this increase in efficiency has allowed the cooperative to expand its scope and bring in a number of new members.
With the SAP software, it is possible to trace each cashew sack back to its original farmer, enabling continuous traceability through the whole supply chain. Since marketing experts believe that customers are more likely to buy nuts if there is complete information about their source, greater traceability may directly translate to greater sales.
SAP and ACi hope to expand the program to additional buying stations around Ghana and to other countries in Africa such as Côte d’Ivoire and Burkina Faso. Christian Merz, SAP Project Lead, believes this project could have far-reaching implications.
“The ACi partnership offers a unique opportunity for SAP to demonstrate the viability of emerging ICT markets in developing countries,” he said. “Based on the piloting results, a profound business case is now being calculated for the commercialization of software targeting the agricultural sector in emerging economies.”
This would be welcome news for African farmers and international brands.
The African Cashew initiative
The African Cashew initiative (ACi), a public-private partnership funded by the Bill & Melinda Gates Foundation, the German Federal Ministry for Economic Cooperation and Development (BMZ) and various private sector partners, addresses all components of the cashew value chain – from production to processing to marketing. ACi project activities are implemented in five African countries: Benin, Burkina Faso, Côte d’Ivoire, Ghana and Mozambique.