Better together: hopping over the middle man with collaborative purchasing

Many female smallholder farmers in Kenya have a hard time accessing markets. This happens because female farmers often lack information about market demand, have limited resources to run their own channels of distribution, and are constrained in terms of time because they also have to manage their farms and look after their house and family.

As a result, many of these farmers rely on middlemen, who gather their produce and then sell it to greengrocers or other retailers. While middlemen often play an important role, it is problematic if this is the only way farmers can access the market. Where this is the case, many farmers often have lower bargaining power and do not always get fair prices for their produce.

To address this challenge an expert group comprised of Inclusive Business Sweden, Pool.farm, AWAN and Agriprofocus with support from SIANI, are on a mission to explore how collaborative purchasing and distribution could provide an avenue for female farmers to directly and effectively market their produce by making it easier for buyers to purchase their produce. This could mean that farmers would have the possibility of getting better prices for their produce by selling directly to customers and going around middlemen.

Kenya has a bustling digital scene with many solutions for farmers on offer. However, several have failed and many struggle to do well. There are many reasons why this is the case, ranging from unsustainable business models to low uptake of some solutions by farmers. In the coming months, the Expert Group will interview providers of digital solution in Kenya to better define where the challenges lie.

Right now, according to Lorah Njagi Holmstedt (Inclusive Business Sweden), it is possible to say that many solutions only focus on farmers without taking into account other actors across the value chain, like retailers. Inclusive Business Sweden also found that many solutions and business models are unnecessary complicated, which affects their uptake as they are simply inconvenient and don’t match the everyday reality of the farmers.

The second element of the approach includes testing collaborative purchasing with female smallholder farmers in Kenya. Swedish company Pool.farm provides a platform that enables customers to purchase food available for sale on its website together with others. Their solution is built around a simple proposition: ‘If you can buy with a neighbour or people in your vicinity, then you can transport it together’, or in other words, do purchase collaboratively.

Businesses (and farmers) can upload a catalogue of their produce on Pool.farm. Customers can create a profile to make orders of products from the available catalogues and manage collaborative orders at no additional cost. Pool.farm was inspired by the highly successful M-PESA model, a mobile money transfer service, which is used by the majority of the population in Kenya.

The concept of a collaborative purchasing for smallholder female farmers in Kenya could work similarly: farmers would upload the produce which they have available for sale, customers would then see what is available and create shopping lists to purchase the produce. They would also be able to share their shopping lists for secondary customers to join the order. This process could be optimised for both individual households as well as for small businesses. It is true that many smallholder farmers have difficulties with consistently meeting the quantity and quality demands of larger customers, such as greengrocers or supermarkets. Inclusive Business Sweden envisions that this could be possible to overcome by working through farmer cooperatives which could potentially facilitate collaborative selling to meet larger orders.

Watch the animated video below to understand how a collaborative purchase application will work:

Over the upcoming months Inclusive Business Sweden and their partners will be working on the prototype of the app which will be tested in Kenya with women farmers, agricultural cooperatives, potential customers (individuals and local shops) as well as with other digital solution providers. The Expert Group will further explore the current landscape of local market access for smallholder farmers in Kenya, as well as research how digital services can lead to more business for women through collaborative purchasing and distribution.

For more information please contact Lorah Njagi Holmstedt, at lorah.njagi@inclusivebusiness.se.