From start to finish: a vision of interconnectivity

At the moment, the agricultural industries of African countries exist in relative isolation. Imagine peasant farmers digitally connected to the value chains of the global food industry. How could this happen? A guidebook.

 

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Baden-Württemberg, Waldenbuch: "Ritter Sport" is one of Germany`s biggest confectioners. Photo: Christoph Püschner/Agentur Zeitenspiegel

Tanja Reith

Tanja Reith is a solution manager for the Agribusiness vertical in the SAP Industries organization. She has over 20 years of experience in go-to-market and solution management roles for enterprise software, engaging closely with customers and partners across different industries such as agribusiness, consumer products, and financial services. Tanja’s ambition is to drive shared value resulting in business value to our customers while making a social impact and improving people’s lives.

 

When eating their chocolate bar in the afternoon, maybe together with a cup of coffee, people always tasted and enjoyed the flavor of both, but they usually did not think about the origin of the cocoa or coffee beans. Where and how were the beans harvested? How did they make their way from a cocoa plant in e. g. Ivory Coast to the supermarket shelf in Berlin? Did the farmers who originally planted the trees and harvested the fruit get a fair price? Can we be sure that children did not suffer from spending their time in unpaid harvesting work instead of going to school? This has changed: more and more socially conscious end consumers are looking for answers to these questions and consider respective certifications when they buy their preferred brand.

 

70 percent of the global cocoa produce comes from West Africa, mainly Cote d’Ivoire and Ghana.

 

This change in end consumer behavior is a key driver for consumer goods companies to increase the transparency and traceability of their food products – even across company boundaries. Let’s stay for a moment with the chocolate example: 80% to 90% of the world cocoa production comes from 5 to 6 million smallholder farms. 70% of the global cocoa produce comes from West Africa, mainly Cote d’Ivoire and Ghana. How can chocolate producers and consumer products brands obtain visibility and prove that the ingredients in their products are a result of sustainable farming and certified? How can they connect with smallholders being the very first supplier in their agricultural supply chain and integrate them into the value chain?

 

To help address this challenge SAP launched in 2017 SAP Rural Sourcing Management, a mobile technology solution supporting and growing smallholder famers in developing countries connecting them with global producers and providing transparency, accountability, and access to financial services. A predecessor of the solution was developed and piloted by an SAP research division, in a development partnership with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. The project was conducted under the framework of the develoPPP.de program on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). As a next step SAP and Barry Callebaut, the world’s leading manufacturer of high-quality chocolate and cocoa products, cooperated in a custom-development project helping Barry Callebaut enable sustainable cocoa farming, before the solution finally became generally available.

 

(c) Foto SAP
Tedious work of harvesting, Photo: SAP

SAP Rural Sourcing Management is a cloud-based solution for enhanced management of sustainability data through digitally recorded information on producers, their farms, and their communities at every level of the value chain. Field agents collect data on farmer registration, purchasing and processing of produce, and transportation records. These field agents can work for local cooperatives, local or regional producers but also global traders or producers who want to directly connect with the smallholder farmers as their original source of agricultural commodities. Now how can the SAP Rural Sourcing Management solution help smallholder farmers to connect with the value chain of agricultural commodities and what is the related (social) impact?

 

The app also allows the integration to cashless payments, as well as access to information about the transactions.

 

Let’s look at the example of Kalangala Oil Palm Growers Trust, one of our customers in Uganda representing smallholder oil palm growers in Kalangala district in Lake Victoria. Deliveries of fresh palm oil fruit bunches are recorded by an employee using a registered smartphone. The confirmation of delivery and payment can then be sent to the farmer’s private phone by SMS. The app also allows the integration to cashless payments, as well as access to information about the transactions. The organization can simplify its administration processes and tremendously increase its data availability and accuracy. This will help to cut administration . In addition to the direct business impact for the organization, the project also opens smallholder farmers the doors to financial institutions allowing access to agricultural input loans or financial services including . Banks and insurance companies are starting to use data recorded by the app as a “track record” and proof of income. Input loans such as seed and fertilizer will help smallholder farmers to increase yield and with that achieve a higher and secured income enabling them to pay school for their children and improving their livelihoods.

 

SAP is supporting the 17 United Nations Sustainable Development Goals across the 25 industries that SAP is serving. For the agribusiness industry, UNSDG #2 Zero Hunger seems like a big goal, especially as experts estimate food production must grow by 70 percent to feed 2.2 billion more mouths by 2050. SAP offers a designated solution portfolio for this industry and SAP Rural Sourcing Management is one of these solutions. SAP agribusiness solutions are designed to help our customers in different segments and different geographies to increase sustainability as well as food safety and food security. The solutions help to carefully manage the entire food supply chain from farm to consumer with the support of new digital technologies, such as blockchain, artificial intelligence or machine learning.

 

Here is an example how cutting-edge block chain technology can improve transparency and food safety and at the same time help e. g. fishermen in Indonesia to improve their incomes and lives: One of the largest seafood companies and SAP customer Bumble Bee Foods, provides seamless transparency for their tuna products, from the handline on the boat to the plate of the consumer. Bumble Bee’s consumer app links the individual tuna can with essential information about species, population size and associated quota allowance, catch method, potential by catch, and whether the fisher is even Fair Trade Certified. Stories about community engagements, book donations, or providing safety equipment offer insights into how this type of sustainable supplier engagement creates positive social impact for the local villages. Since 90 percent of the capture fisheries comes from small-scale fishers, Bumble Bee allows consumers to buy the impact they want to make.

 

These are just a few examples how in a digitized world, enterprises are connected with every part of their supply chain – up to smallholder farmers in developing countries reaching the bottom of the pyramid. If you want to learn more about SAP agribusiness solutions or SAP Rural Sourcing Management, you can find more information on www.sap.com or contact agribusiness@sap.com.

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