Olam Direct purchasing app adds funds and cuts expenses.
An estimated 5,400 Ghanaian smallholder farmers are receiving better prices on their 3,100 tons of cashew thanks to Olam’s direct purchasing app Olam Direct. The app also benefits customers by providing greater traceability for their purchasing.
Developed in-house, Olam Direct is one part of a robust, proprietary solution which offers a variety of apps and tools to not only provide greater transparency on pricing, but access to Agri-inputs and farming advice like better fertilizer use and insights on efficient land use to fight climate change.
The app is empowering farmers to get prices directly from Olam rather than from the traditional buying agents, which yields not only higher prices for their cashew but cost savings on their expenses, as Olam manages “last mile” collection. This can have significant impact on farmers and their communities: if the average daily food budget for a typical Ghanaian household was is 14-15 Cedi ($2.40 - $2.58), farmers using the app can receive funds worth another month of food.
“When we empower farmers to do better for themselves, whether through business operations or supporting their communities and environments, we all win,’ said Youssif Amankwa – Cashew Branch Manager for Olam Ghana. “Olam Direct is a textbook example of using technology to disintermediate and transform a supply chain so that it works more efficiently and fairly.”
First piloted in 2018 to approximately 1,000 farmers and 125 tons of cashews, the number is estimated to increase to 8,000 tons in 2021.
Beyond the immediate benefits of the smartphone app, farmers participating in Olam Direct also provides customers with reliable visibility into their purchases as all transactions are geotagged and timestamped, with farmer’s consent and delivered via Olam’s sustainability insight platform AtSource. AtSource is a core technology pillar for delivering Olam’s long-term vision to reimagine agribusiness and food supply by focusing on empowering farmers and customers platform.
“Olam Direct, as a new and unique buying model, has equipped us to engage with cashew farmers directly and create relationships which are beyond transactional nature,” said Yussif. “Through it, we provide more transparency in price to farmers and help them appropriate better margins by disintermediating aggregators in the cashew supply chain. We also work with cashew farmers in the off-season providing them knowledge training, need-based farmer loans, and farming inputs.”
The dedication to farmers and the sector extends beyond the harvest season. Established in 1994, Olam Food Ingredient’s global cashew business has grown in Ghana through a strong year-round relationship with farmers. In 2019, the business provided over 30 good agricultural practices training programs on 12 different relevant topics to encourage sustainability. A program to train 400 women farmers in beekeeping already produced anecdotal increase in income by 15%.
Intriguingly, the program’s success shows evidence of a broader transformation of the sector with direct and indirect benefits to communities. Almost half of the farmers benefitting from the Olam Direct program are women and, as numerous studies find, they are responsible for both farm productivity and family health and wellbeing.
Consequently, many of the buying agent have transitioned to become micro-collectors for the digital transaction, thereby creating new job opportunities and Olam is pioneering organizing individual farmer to form farmer groups so they can have greater voices in the selling process, as well as receiving equal treatment.
But that’s not all! Olam Direct also empowers farmers to receive market information and alerts from Olam, ask questions directly via the app, and provide feedback or reports issues directly to Olam.
“Sustainability depends on the health and success of farmers on whom our customers depend,” said Yousiff. “Working together, we can meet the increasing demands of consumers for food products that are not only natural but right for both planet and producer.”