Rising to the win-win challenge in smallholder sourcing
On the surface, large-scale contract farming programmes appear to represent a powerful means of reducing poverty. But to maximise the opportunity, commercial organisations, donors and farmers across Africa need to cooperate, leveraging innovation solutions to maximise advantage for all.
Get it right, and there is no doubt of the huge potential for positive change and commercial opportunity that such innovation presents. Possible benefits extend far beyond smallholders themselves to embrace R&D organisations, solution developers, marketers and ultimately consumers.
And the potential for upside is enormous. This was the message from TechnoServe CEO Will Warshauer at the ‘Win-Win Innovations in Smallholder Sourcing’ AGRF session. There are an estimated 35 million smallholder farmers on contract earning schemes, so efforts to find win-win solutions while benefiting smallholders more than any previous contracts mean there is clearly a significant benefit to be had.
But we are not there yet. According to Ms Nupur Parikh, Director of TechnoServe, despite that massive underlying potential, there is currently very little coordination within the industry around cooperation and best practices.
Far more could be done. “There is little knowledge sharing between companies, not even when they are not direct competitors,” she said. “As a result, companies are not always aware of the new approaches or best practices being developed elsewhere.”
In 2015, TechnoServe decided that it was time to address this situation head-on, with the launch of a platform called ‘Coalition for Smallholder Sourcing’. Dedicated to supporting
innovations and identifying win-win solutions in smallholder sourcing, this has had some success. As Ms Parikh explained, over the past three years the coalition has supported three private companies in testing six innovations with the potential to develop shared value.
Fellow panellist Francisco Santos, CEO of JFS Mozambique, explained that his organisation is working with between 4,000 and 5,000 partners, helping them to develop value chains with multiple beneficiaries. Its aim is to help companies consider more than traditional training alone. As he said, “Our strategy has three main pillars, enabling access to market, access to energy and access to partnership services.”
However, as he pointed out, it is not always possible to ensure that farmers take advantage of the right available technology. As he said, “This is not an economic issue – it’s to do with sociology.”
He also admitted that one major unspoken challenge is Mozambique, where there is a huge population without identity cards. This means they cannot acquire SIM cards, so the only way to test innovations is by bypassing the systems, making regulation an issue. In addition, the Central Bank does not allow people to open bank accounts without ID cards, impeding financial success.
Paul Wang, Partner at IDinsight, highlighted the positive role that technology can have to play. He explained how using his Customer Supplier Relationship Management System innovation to send reminders to farmers via mobile phones enables them to achieve better yields. As a result, this additionally improves farmer satisfaction and loyalty.
And that could be called a win-win situation.