Uganda is one of Africa’s largest coffee exporters, but the majority of its coffee is harvested by smallholders who have limited market access and therefore receive low prices for their produce. As a result, 54,000 small farmers banded together in 2005 to form the Uganda Coffee Farmers Alliance (UCFA). The UCFA’s size enables it to secure higher prices, but the organisation is labour-intensive and expensive to administer.
An accounting system of the kind that SAP has developed for other products would make the UCFA’s work much easier. Meanwhile, SAP wanted to tap into the African market but has so far lacked the contacts to do so.
SAP and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH have, therefore, been collaborating as part of a develoPPP.de partnership with the UCFA. The develoPPP.de programme is implemented by GIZ on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ).
In line with the project GIZ aims to secure higher incomes for coffee-farming families, lower administrative costs, and put the UCFA on a transparent administrative footing; SAP benefits from GIZ’s contacts in Uganda.
In line with the development partnership, SAP has adapted its basic software to the local context. The pilot project saw the partners train 12 UCFA managers, who use an app to record the quantity of coffee supplied by individual farmers.
Each manager uses a smartphone to keep records for around 650 farmers. A further 12 managers are being trained in 2015, which will bring 16,000 of the 54,000 UCFA members into the software-based administration system.
As soon as it receives the data from the smartphones, the UCFA has a real-time overview of who has supplied how many sacks of coffee beans, and where. This has made administration and accounting much easier, and reduced organisation costs by 11 percent. Electronic data gathering offers many other advantages, too. For example, the next stage of the project will involve the farmers being paid electronically via mobile phone. The UCFA will also be able more easily to use the data it gathers to certify the coffee.
‘The develoPPP.de project has opened doors to new markets for SAP. Our partner, GIZ, has contacts with government ministries, institutions and farmers’ associations that it would otherwise have been difficult to build up.’
Christian Merz, former head of new market development at SAP