Waste Not, Hunger Not: The Logistical Solution
Bringing smallholder farmers to the market using third-party logistics
by Olivia Reicks
INTRODUCTION
One third of the world’s food is wasted in both developed and developing
countries (1). In Sub-Saharan Africa, 50 percent of the waste is due to
handling, storage and distribution (1). Smallholder farmers (average farm
size less than 2.5 acres (2)) do not have the capital required to purchase
better farm storage technologies to reduce waste. Smallholder farmers gain
economies of scale once at a secured, insured storage facility, but they often
live miles away and have no access to proper transportation. Therefore, they
are forced to sell at a lower farm gate price to intermediate buyers.
KEY FACTS
An oligopoly exists within the intermediate buyer tier of the supply chain.
Additionally, farmers do not have accurate market price information. ACE
(Agricultural Commodities Exchange for Africa) is working to improve this
knowledge gap, and educate farmers on the advantages of waiting to sell. In
2011, farmers who used secured storage facilities instead of selling at
harvest received, on average, 35 percent more for their commodity (3).
Once farmers earn higher profits, they will be able to send their children to
school, eat more nutritiously, and buy better farm storage technologies.
References:
1. “Food Price Watch.” (2014). The World Bank Group. Issue 16
2. “Dimensions of Rural Poverty.”(n.d.) IFAD.
3. Kawale, E. (2015). ACE Exchange. (O, Reicks. Interviewer)
PROPOSAL
Third-party logistics providers will operate as less-than-truckload providers.
Designated pick-up locations within the villages will be established. Text
messages will be used for rate quotes and confirmation of delivery. Farmers
will have:
 Low capital commitments
 Expanded geographic selling regions
 Increased specialization and flexibility within the market
 Increased time savings
In addition to more selling power, logistics providers may also backhaul
fertilizer, seed and other crop protection products to enable farmers more
buying power as well. By partnering and educating with existing private
transportation companies in the region, the plan will remain sustainable after
implementation is completed.
LESSONS LEARNED
More food is not the only answer to food security. It is complex and involves
gender inequality, malnourishment, health and socioeconomic issues. Hunger
is in every country and needs to be taken seriously as the population is
expected to rise to 9.6 billion by 2050. Solutions and collaboration need to
come from everyone: engineers, food scientists, journalists, anthropologists
and supply chain managers.