Re-imagining Global Agriculture: Prosperous farmers and farming systems
Innovating supply chains to benefit farmers and Olam
One of the many challenges for crops like coffee and cocoa is the sheer number of small-scale farmers living in very remote regions with limited infrastructure.
Collecting directly from each farmer, and proper handling of the crop, are labour and time intensive. This is why intermediaries have established themselves, buying from farmers in a certain area and then selling to the next intermediary so the crop gradually moves from farm to port. Reducing the number of transactions can provide better value to the farmer, as well as increasing the efficiency of the supply chain. It also means that Olam is paying a higher price.
Designed by the Digital Olam team, Olam Direct is an industry-leading tech platform that will help connect millions of farmers directly with Olam to ensure a fair and transparent sourcing process and improve traceability. The app was launched to cocoa farmers in August in Wiyono village, Lampung Province, Indonesia, where they learned how to check the cocoa price online, indicate intent and transact with Olam. Tips on Good Agricultural Practices are also issued. Farmers can now make more informed decisions for the harvesting and sale of their cocoa, thereby improving their livelihoods. A field force and toll-free helpline help farmers feel at ease downloading and transacting on the app.
Olam is also building partnerships with telecom service providers to improve digital penetration in upcountry areas and with banks to open accounts for the farmers, bringing financial inclusion, as well as reducing the cost and risks for high-volume transactions. Furthermore, the app immediately connects the Olam Cocoa logistics teams who can co-ordinate collection and warehousing more efficiently. We now intend to take our innovations and apply them to other farmers both in Indonesia and elsewhere; continuing to increase the value of farming, improving livelihoods and further re-imagination of the supply chain.
Kurniadi, is a 38-year old farmer:
In early 2000, I began to cultivate cocoa on my farm. However, during the past few years I realised that my cocoa farm was not productive because of pests and disease. While thinking about changing from cocoa to another crop, I heard from a friend who said there is a company that wanted to buy cocoa beans directly from farmers. And if the news was true indeed that farmers can get a better price, then this sounded too good to be true. I attended one of the socialisation events. Olam Indonesia was announcing direct purchasing from the farmers under a programme called Olam Direct. From the socialisation I started to learn about cocoa bean quality. The Olam Direct programme not only enables the purchase of beans manually but also through an online bean-selling android application. Cool! Unfortunately, I still had my old phone, but as I had registered with the Olam Direct programme, I got information about the cocoa bean price every day by SMS. I was very satisfied with the price I got for my beans in the first transaction. Recently I purchased a new phone, and I was embarrassed because I could not operate a smartphone. However, after training from the Olam Direct field staff, I conducted my first successful online transaction. With Olam Direct, I am excited to take more care of my cocoa trees, and I will think a thousand times before I decide to shift to a different crop.