Solving Complex Problems with Mutually Beneficial Supply Chain Integration Solutions

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This past week the Institute for Development Impact (I4DI) presented their “SmarTRADE” holistic development strategy to Policy Analysts with the Economic Growth and International Financial Institutions Division of the Canadian Government about solving complex problems with mutually beneficial supply chain integration solutions. More specifically, I4DI highlighted the shea butter supply chain in Western Africa, and how a human-centered, ecosystem development approach leveraging new and exciting technologies such as “blockchain” can create positive-sum outcomes for all stakeholders.

Shea Butter is currently a major source of income for many people living in the 21 African countries where shea trees naturally thrive. This is a result of a major demand for processed shea butters and oils for use as a cocoa butter equivalent (CBE) in confectionaries, and as an ingredient in many natural cosmetics and personal care products. While shea butter has a multi-industry application, ninety percent of processed shea butter is used as a CBE while only ten percent are being used for cosmetic and personal care production. Over the last fifteen years, the industry demand for shea butter has nearly doubled and is projected to increase in the coming years due to higher levels of chocolate consumption in developing nations, the skyrocketing price of cocoa, and the increasing demand for natural cosmetics and soaps.

This bustling industry affects the livelihood of millions of smallholder shea butter farmers and processors of whom more than 90% are women, however, there are many disparaging challenges for these women involved with the supply chains. The work to collect, return, and process the shea kernels into shea butter and oil is all done manually over a long period and is extremely labor intensive. Local Buying Agents (LBAs), of which 99% are men, will then come into those villages and offer lower than fair prices to the women who have just performed this manual labor for their processed shea butter. The LBA will then turn around to sell the product to corporations at a much higher premium who are ready to add value to the product and sell to their consumers. Not only are the LBA’s positioning themselves as an un-needed middle-man, but they go into the villages at unpredictable times with unreliable and unfair prices.  This poses a major problem for most of the women in the supply chain because they cannot rely on regular purchases at a reputable price, and many women see an LBA as an opportunity to unload all her processed goods in one quick sale. Not only does this leave the women with less money than they could have made, but now they have money during a time in which shea does not need to be farmed or processed, and are ultimately robbed of their economic identity.


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The Shea Butter Supply Chain

While there are numerous challenges posed to women who are involved in the shea butter supply chain, I4DI has worked on an innovative approach to remediate these problems with solutions that are in the interest of the companies who utilize the shea butter, the partners involved in social and economic development, the governments and communities that they serve, and of course, the women who process the shea kernels into butter.

Through their three-step technical approach, I4DI can: 1) Conduct formative research to understand the shea butter supply chain challenges and opportunities, the economic and social drivers to best leverage incentives, to understand community dynamics, relationship structures, and economic opportunities. 2) Design the intervention to mobilize stakeholders to form “trust networks” (defined as farmers, organizations, government, companies, and change agents who have built strong relationships through multi-stakeholder platforms), using a participatory approach, identify conditions for economic incentives outlined by a “development contract” and by using a human centered design to leverage supply chain interests while engaging women and youth, especially the most vulnerable. 3) Pilot and test the intervention by establishing the trust networks in target communities that link the stakeholders to the development contract, and implement community and governance interventions and establish an economic identity for people within the supply chain.

Using this type of an approach can aide equitable development in several differing smallholder farming communities to establish an economic identity for the farmers, increase productivity and traceability for companies, boost local economic growth, and help to drive impacts towards achieving the sustainable development goals.

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