Palm Oil and SAP Software Give Ugandan Farmers New Hope
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The transition from subsistence farming to oil palm cultivation on Kalangala Island represents a significant shift in agricultural practices with implications for local economies. Oil palm is known for its high yield and profitability compared to traditional crops like cassava and bananas, which can transform the economic landscape for smallholder farmers. The introduction of a transparent payment system by the Kalangala Oil Palm Growers Trust (KOPGT) is a critical innovation. It reduces transaction costs and payment delays, which are common pain points in agricultural value chains, especially in developing countries. This system likely increases liquidity for farmers, allowing for reinvestment and potentially leading to a virtuous cycle of growth and prosperity for the community.
However, the shift to oil palm cultivation comes with environmental concerns, particularly regarding deforestation and biodiversity loss. The adherence to sustainability guidelines and the pursuit of certification by the Roundtable on Sustainable Palm Oil (RSPO) are positive steps. These actions can mitigate negative environmental impacts and align with global consumer preferences increasingly favoring sustainably sourced products. If successful, this could open up premium markets for the farmers and potentially lead to higher price points for their produce.
The integration of SAP's technology in monitoring compliance with the National Environment Management Authority guidelines is a notable development in sustainable agriculture. By utilizing SAP Analytics Cloud, KOPGT is able to ensure real-time oversight of farmer plantings, which is crucial for maintaining environmental standards. The commitment to maintaining a lake buffer zone and rehabilitating damaged areas demonstrates a proactive approach to environmental stewardship.
Environmental sustainability in agriculture is not just about compliance; it is also about long-term viability. The negative externalities of unsustainable farming practices can lead to soil degradation, water quality issues and loss of ecosystem services, which are vital for agriculture. Therefore, KOPGT's efforts to balance increased productivity with environmental health could serve as a model for sustainable agricultural expansion in similar regions. The potential certification by RSPO would further reinforce the trust's commitment to sustainable practices, potentially influencing other agricultural entities to adopt similar measures.
The deployment of SAP Rural Sourcing Management by KOPGT represents a leap forward in the digital transformation of agriculture in developing nations. By digitizing the value chain, smallholder farmers gain access to a level of data management and visibility previously reserved for larger operations. This digital inclusion can lead to improved decision-making and operational efficiencies, which are critical for scaling up production and enhancing competitiveness in the global market.
Moreover, the use of cloud technology in agriculture is a growing trend that enables organizations to scale solutions rapidly and cost-effectively. The ability of KOPGT to track and manage farmer plantings through SAP's cloud platform is indicative of a broader movement towards data-driven agriculture. The insights gained from such systems can lead to better crop management, predictive analytics for yield optimization and ultimately, a stronger, more resilient agricultural sector.
NORTHAMPTON, MA / ACCESSWIRE / February 7, 2024 / SAP
by Paul Taylor
Much has changed for Nassozi Berna, her husband, and their seven children since she began farming oil palm trees on Kalangala, an island in Uganda's Lake Victoria, 11 years ago. Before that, Berna and her husband were subsistence farmers growing cassava, banana, and some coffee and living in a small, timber-framed house.
Like many other farmers on Kalangala, Berna started growing oil palm trees in 2012 while emphasizing sustainability and avoiding the deforestation and other issues associated with oil palm farming in some parts of the world.
Oil palm trees bear the fruit that makes palm oil, a much more reliable and lucrative crop than the cash crops they were producing previously. "When we were farming cassava, bananas, and coffee, we were affected by monkeys. They came and destroyed our crops," she says.
She also explains that she had to leave home and go to the market to find a buyer for the crops that survived the monkey attacks and never knew in advance how much they would fetch. "Our living conditions where bad," she remembers. She and her family lived in a makeshift timber house. "In the night when we were sleeping, winds would come and destroy our houses and our children fell sick almost every day."
Change
That began to change when Berna began working with the Kalangala Oil Palm Growers Trust (KOPGT) and the family planted their first oil palm trees in 2012. They expanded their crop in 2019 and again in 2022. In Kalangala, many of the people are oil palm farmers. "When a day starts, some of my family members help me with the pruning," she says. "The others go to the plantation and do other activities."
As part of its mission, KOPGT teaches farmers better agricultural practices. But perhaps most importantly, it has created a transparent payment system so farmers get paid faster and know if what they're getting paid is accurate, increasing the standard of living of the farmers and, subsequently, much of the island itself.
As the number of farmers and transactions increased, KOPGT needed a digital solution to enable continued growth. Since 2009, SAP has worked to create applications that help smallholder farmers in developing nations, primarily across Africa, enhance food production.
David Balironda, KOPGT's general manager, explains that the trust's system is based on SAP Rural Sourcing Management, which can digitally record information on producers, their farms, and communities at every level of the value chain. This helps provide visibility and allows parties to easily and quickly communicate with each other.
Sustainability
Underscoring the importance of sustainability to KOPGT, the trust conducted an initial environmental impact assessment before launching the project and uses SAP Analytics Cloud to monitor the farmer plantings and ensure they are in compliance with the National Environment Management Authority guidelines.
SAP cloud technology also enables KOPGT to ensure that the oil palm planting meets the most stringent sustainability guidelines set by Uganda's National Environmental Authority. "We are in the process of applying for that certification by the Roundtable on Sustainable Palm Oil to make sure that we work within those guidelines," says Fredrick Sulwe, KOPGT's finance and administration manager.
As part of KOPGT's commitment to sustainability, the trust maintains a lake buffer zone between the planting and the lake itself and even rehabilitates those areas that have been damaged by other plantings. "Restoration of those areas - the lake buffer zones - is key," says Sulwe.
In addition to maintaining the buffer zones, the trust also follows recommendations for the stocking of trees and ensures that no chemicals or herbicides are used. "As we increase household income, we must keep an environment that is free of any distortion by the project," explains Sulwe.
The KOPGT system allows the farmers to input information about their crops using the lead farmer's mobile phone and enables them to receive information and advice back from the trust. The system also includes a mapping feature that has helped farmers to know exactly how much land they are farming. "That means when I go to the bank to get a loan, I'm sure of the size of my lot," explains Berna.
In addition, she also knows exactly how much of the loan is outstanding and when it needs to be repaid. "Previously, we would almost spend a year without knowing the status of our loan," she says. "Now we can learn the status of our loans monthly. This never existed before."
Better Information
She also credits the system with making her a better and more informed oil palm farmer. "At the end of the month I get an SMS that shows how much I have harvested from my lot," she says. Before the system came online, she says the family was spending a lot of money on transport going to and from the KOPGT office.
"Oil palm has not only impacted my life, but also the community," she says. "There are many farmers who are like me who have built houses and some have bought cars. They have used the money they got from oil palm to start new businesses on Kalangala and outside."
Big Dreams
Berna says her hopes and dreams are enormous. "I have started to achieve some of them," she says. "Now, because I have a permanent house, I am able to sleep well, my children no longer get sick, and I'm sure that the winds won't take my house."
"Now, we are able to take our children to school. We can live a decent life. We have some place to stay, and we get paid every month. We are sure that our life has greatly changed," she adds. And although she doesn't yet own a car, she hopes to learn to drive in the coming years.
Meanwhile, she says she wants to thank everyone for their help. "What gives me confidence is we have good officers at KOPGT that have tried to give us a good direction. We hope that when they continue doing what they are doing our lives will be impacted greatly."
Berna's confidence and newly found optimism reflects the success of the vegetable oil program on Kalangala island. Because palm fruits can be harvested throughout the year - compared to one or two seasonal harvests - and have high yields, palm farming has become a viable alternative for the residents.
Palm oil is already the most widely used vegetable oil on the planet, with about 71 million tons consumed in 2021. And there is not only a domestic need, but also a demand from the foreign market that Ugandan smallholder farmers like Berna's family and neighbors can help fill.
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FAQ
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