In reading about this case study the other day, I was struck by the realization that the same software that I’ve used for everyday work activities was actually changing people’s lives profoundly, for the better. It says something about the power of collaboration, on a number of levels.
For years, small African farmers have received low prices for their crops, due to a “buy low, sell high” business model, adopted by buyers as a way to mitigate the risks of agricultural market volatility. This practice has not only affected the farmers; it has also impacted their communities, as low farming incomes could not support adequate education, healthcare and employment.
Meanwhile, African cities have seen a fast-growing consumer market, serviced by independent sellers who need regular deliveries of quality produce. What if direct access to this booming market could be brought to the smallholder farmers, helping them to secure a fairer deal for their crops?
That was the vision of Clive Lightfoot, CEO of Rural African Ventures Investments (RAVI), who noted, “Farmers are never going to get good prices with the ‘buy low, sell high’ approach, and we want to drive a fundamental, disruptive change in the marketing business model.” RAVI wanted to empower stakeholders across the value chain to collaborate rather than compete—improving efficiency and incomes for small producers. So they partnered with IBM Premier Business Partner WebGate to deploy a cloud-based collaboration solution based on IBM® Notes® 9 Social Edition on SoftLayer.
Bringing rural entrepreneurs together with developers from WebGate helped RAVI to develop an application called Transaction Security Services (TSS), which provides a transparent view of the costs and prices along the value chain. Recognizing that the TSS concept had disruptive potential, the group—comprising rural entrepreneurs in Kenya, Uganda and Tanzania with RAVI—decided to create a new joint venture called TruTrade to bring the new approach to market.
James Weru, Founder, Fair Trade Enterprises, explains: “TruTrade is based on a franchise model, in which a single franchise manager is responsible for a network of upwards of 20 agents, who in turn manage crop aggregation points where the farmers are. Fair Trade Enterprises was one of the first franchisees.
WebGate and RAVI have also established a new company called mPEX, with the aim of making its Transaction Security Service business model available more widely across Africa and beyond. As Clive Lightfoot adds, “Thanks to IBM and mPEX, TruTrade can give access to the very latest technology to people who until now were left behind. What’s great about the IBM cloud is that we can scale it almost infinitely—and it’s going to need that kind of level of scale, because the number of consumers in our target market is huge.”
By facilitating the movement of the product along the value chain and helping people make better-informed decisions about their options, TruTrade enables farmers to obtain a greater share of the market price of their products—in some cases, an increase of up to 30 percent. As James Weru notes, “In rural areas, the TruTrade model is changing the lives of farmers in a big way. For example, our members in Kenya can now afford to take their children to school, and they are better able to pay for medical care. In addition, we can boost the local economy by employing people to load trucks and assist in the cleaning and grading of the products.”
That is real, positive change, in real lives. All compelled by a clear vision, committed partners—and collaboration.
To read more about the TruTrade client story, click here.
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