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Transparent trading with smartphone technology

The system helps farmers more easily access profitable markets (© SAP/ACi)
The system helps farmers more easily access profitable markets

For many smallholder farmers, selling their cashew crop has been transformed in recent years, thanks to the application of some state-of-the-art business technology. Developed and tested in Ghana, Burkina Faso and Uganda since 2010, the Virtual Cooperatives software allows groups of cashew, shea nut and coffee producers to carry out a range of 'high volume' transactions using applications on smartphones. Advanced systems used by both sellers and buyers for tagging, tracing and selling agricultural produce are among the most important. While the prototypical software is still in the pilot phase, genuine transactions between participating farmers and traders have been undertaken over 13 cropping seasons in seven sites, with more than 12,000 producers already registered on the system.

The system, developed by business software company SAP in partnership with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and the African Cashew initiative (ACi), electronically tracks sales of crops by assigning barcoded sacks to each smallholder in the cooperative. Every sack of nuts the group intends to trade is then scanned by buying agents with their smartphone. They also type the weight of the sack into the smartphone app in order to calculate the price, based on recent market data. Once the sale is made, the farmer immediately receives a digital receipt of the transaction and the cooperative has an electronic record in its books.

Software development

The system assigns barcoded sacks to each smallholder in the cooperative (© SAP/ACi)
The system assigns barcoded sacks to each smallholder in the cooperative

The technology was developed utilising advanced research methodologies, which aim to apply a holistic approach to business and technology. Close and regular interaction with end users is central to the method and crucial for success. For example participatory workshops were organised with cooperative members in order to explore their challenges for cashew sales and logistics, design user-friendly screens, and develop the functionality of the software applications.

The first pilots were carried out during Ghana's cashew season between March and June 2011, during which around 400 farmers were registered and more than 100 tons of raw cashews were traded. SAP supported the implementation by supplying the necessary equipment (smartphones and barcode stickers, etc.), training activities, regular communication with all the local stakeholders and deploying the custom-built application.

Boosting efficiency

The Virtual Cooperative system has helped farmers improve their organisational efficiency, ensure transparency of business operations and run detailed data analysis. Ultimately the system helps farmers to more easily access profitable markets. Meanwhile buyers, including local processors, have been able to plan and forecast their trading more accurately which enables, in the long term, the development of reliable and trusted business relationships to farmers. The system has also enabled them to buy from smallholder producers who have previously been largely excluded from formal trading systems. In future, even consumers may benefit from the system and be able to learn the precise origin of their cashew or shea nuts simply by scanning a barcoded package at the retailer.

Once the sale is made, the farmer receives a digital receipt of the transaction (© SAP/ACi)
Once the sale is made, the farmer receives a digital receipt of the transaction

As of September 2013, the Virtual Cooperative software has been used in three countries, utilising different language versions. By the end of 2013 more than 20,000 producers will be registered in the system which will then support the trading of four different crops in West and East Africa. Coffee cooperatives in Uganda and cocoa farmers in Cote d'Ivoire are set to be among those to test the technology.

Commercial future

Additional functions are currently under development, including supply of farm inputs and services, extended quality indicators for produce, pre-finance and electronic payments, and advanced geographical information tools to aid in crop selection. The system is designed to allow data sharing between producer groups and organisations higher up the value chain, including processors, exporters, certifiers and retailers.

SAP aims to develop a matured, market-ready product which can be incorporated into commercial farm businesses that is also accessible and affordable to farmer groups at the bottom of the economic pyramid.

Date published: October 2013


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