How the cooperative model can ‘empower the people behind our favourite foods’

By Oliver Morrison

- Last updated on GMT

Image: Getty/subman
Image: Getty/subman

Related tags Africa Supply chain Transparency Supply chain management cooperative agreement

Why cooperatives are key to unleashing African food sector potential, says ingredients supplier ofi.

Africa’s food system is associated with many problems including food security, water scarcity and the need to make crops more resilient. For ingredients supplier ofi, the cooperative model is best placed to meet these challenges. ofi’s sustainability lead in Africa, Flora Coffi Sika, tells FoodNavigator more about it.

A particular complaint about Africa’s food system is that food supply chains are currently not set up to maximise the potential of the food system.

Poor positioning by African food factories means they are sometimes running at below 50% of their installed capacity due to scarcity of quality raw materials and the capital to purchase them. This further means consumers in Africa are estimated to spend around 60% of their income on food (contrasted with 10% for European or US consumers).

For ingredients specialists like ofi, cooperatives offer a resilient and sustainable sourcing model, Sika said, and “a means of extending the support from our teams on the ground to positively impact more of the farmers and communities that the chocolate, coffee, and nuts we all love come from”.​ 

Giving farmers choice and a voice 

ofi’s heritage is rooted in African communities where its local teams have been growing relationships for nearly two decades. Today, the company sources cocoa, coffee, and cashew from over 350 partner cooperatives, representing over 170,000 smallholder farmers who rely on it as a source of income and food security.

It is the communication channels and collaboration between members that exist under a well-managed co-op, that allow us to give them a collective voice​,” said Sika. “And the support provided by our agronomists and field teams on the ground can be more ambitious due to the benefit of only having to deal with a single counterpart in terms of payment, legal processes, and support infrastructure.

“For many small-scale cashew, coffee and cocoa farmers, learning about proper pruning, organic composting, post-harvest processing and storage, will be the first kind of formal education they’ve had access to. Co-ops serve as a hub for us to invest in training and resources, - affording farmers access to information, inputs, credit, and markets,”​ said Sika. “Through a train-the-trainer model and year-round support, farmers are able produce more and better quality through the power of the collective. They become role-models or agents in the community, leading other farmers by example.”​ 

“For the most vulnerable farmers, the ability for us to provide pre-financing to the co-ops allows them to buy what they need – seeds, fertilizer, tools - to maximize their harvests and income. And crucially, it means the co-op can pay them immediately for their crop on delivery.”

However, to unlock this value, there is often a degree of ‘professionalising’ co-ops required and in other cases, a local buying structure has to be set up from scratch to enable direct sourcing. Today ofi’s local teams work with the AFPE (Agricultural and Food Products Experts) to assess cooperatives’ leadership skills and give targeted training and coaching.  

“Even in the origins we work in where cooperatives aren’t established as legal entities, our local teams work to group farmers to replicate the formal structure of a cooperative and the benefits it provides in extending training and capacity building initiatives.”​ Sika told us.  

In Nigeria for instance, cocoa is a major cash crop but limited access to land, financial services, education, and markets are just some of the barriers to production. Ofi’s teams have grouped 48,000 cocoa farmers, spread across 1,700 communities into 19 clusters, with a farmer lead and 11 officers appointed for each cluster. Over 140 field staff work with them to deliver the gamut of sustainability training from pruning and shade tree management to child labour monitoring and conservation practices, which they then transfer to the farmers in their respective cluster. 

While to the east on the slopes of Mount Elgon in Uganda, a region heavily dependent on coffee production and vulnerable to weather variability, ofi teams are working with farmer groups on demonstration plots to test, measure and apply the most efficient living income strategies for different farmer segments[i]​.

Promoting women and youth inclusive approaches 

Cooperatives can also act as a powerful vehicle for driving equality, innovation and behaviour change in rural communities, explained Sika. “They provide an important listening mechanism to give us a better understanding of community needs and where to direct investment – from literacy programs and finance training to health and education infrastructure. We work with cooperatives to develop action plans for inclusion of women and youth, and training on good labour practices.”

As a flavour of what this looks like in practice, co-ops have played an instrumental role in helping ofi’s cocoa teams roll out child labour monitoring in all of its sustainability programs. “And supporting our remediation efforts, one of our partner cooperatives in Grand Zattry in Southwest Côte d’Ivoire, NECAB, decided to use its premiums to build a kindergarten as a safe place for working parents to leave their children, instead of taking them to the farm.”

As for the next generation of farmers, ofi-trained ‘pruning gangs’ are being deployed as a service by co-ops in Côte D’Ivoire and Cameroon to offer additional jobs and income to young adults for eight months of the year. Of course, farmers benefit from this service that replaces the training and access to tools and labour that cocoa and coffee tree pruning otherwise requires.  

“Entrepreneurial training also extends to women,” ​said Sika. “With ofi funds, cooperatives can provide seed money and tools to set women up with an independent source of income - from activities like growing food crops or beekeeping - and support their families. And by being part of sector alliances like the International Trade Centre’s (ITC) SheTrades program in Côte d’Ivoire, we can scale up and improve the support and services we’re providing to women farmers’ through inclusive farmer extension models.”

The importance of the “first mile” for supply chain transparency

The cooperative model can further help support responsible and sustainable sourcing, we were told.

“Where we grow crops we grow on our own estates – almonds in Australia and the US and black pepper in Vietnam, we have complete control,”​ observed Sika. “But the vast majority of the coffee, cashew and coffee we source comes from fragmented supply chains which makes traceability more challenging.”

As legal entities, though, cooperatives conduct internal monitoring that can show ofi whether members are implementing training and complying with the conditions of its Agri Supplier Code – the basis for producing ingredients in a way that’s socially responsible, economically profitable and environmentally sustainable.

“The traceability that we offer customers for their cocoa, coffee and nuts ingredients is also facilitated by the cooperative structure,”​ added Cofi. Co-op managers capture information on the farmers, their farms, and social circumstances on ofi’s proprietary smallholder technology platform, the Olam Farmer Information System (OFIS). While at the warehouse, managers are trained to record transactions on our Digital Supplier Engagement (DSE) app, with unique Lot IDs generated for every dispatch. The information from these digital tools provides ofi with full traceability for the “first mile” of the supply chain for the products it procures from coops.

“In a nutshell, our experience working with farmer cooperatives has been an opportunity to influence third-party supply chains for the better and ensure that the sustainability story behind a cup of coffee, chocolate or snack bar, is a good one.”

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