Impact Amplifier has been working with Nando’s, a South African casual dining chain with over 1,200 restaurants and 30,000 employees in 34 countries, to build a small farmer supply chain for their signature ingredient, Peri-Peri.
Starting from a zero base five years ago, together we have built a supply chain of over 1,300 small farmers in Zimbabwe, Malawi, and Mozambique, which now supply over 90% of Nando’s Peri-Peri throughout the world.
The farmers in the programme receive technical support from a team of agronomy specialists, farming inputs on credit prior to their harvests, a contracted fixed price and an off-take agreement for the Peri-Peri they grow before the season starts. This combination of support maximises both their yields and income earned.
After designing and establishing the programme, Impact Amplifier has been conducting impact assessments every year to understand how the introduction of Peri-Peri as a cash crop into these farmers’ lives has affected their basic human needs of healthcare, education, food security, housing, water, and energy. From this process, we developed two critical tools for understanding impact. The first is a numerical scoring system to measure impact and the second is documenting what the “cost of a resilient life” is and measuring these farmers against that standard. In a three-part series, we are releasing a short summary of both these tools and some of the key lessons we have learned about how impact occurs for small farmers in Southern Africa.
Part 1-Measuring Impact and the Cost of a Resilient Life
In 2012, Nando’s decided to initiate a procurement programme to source its global requirements for African Birds Eye (ABE) chili or Peri-Peri from smallholder farmers. This decision was motivated by Nando’s desire to have a more active and direct role in the procurement of ABE, as it is both foundational to the brand and features in almost every recipe. Nando’s also considered this direct involvement the ideal opportunity to use its supply chain as a means to impact rural poverty in Southern Africa.
To support Nando’s and Impact Amplifier’s other clients seeking to transform their agricultural supply chains, it developed two distinct tools to understand the impact of purchasing from small farmers.
Basic Human Needs Index
As the conditions small farmers live in is often difficult to grasp without first-hand experience, Impact Amplifier developed a numerical tool, the basic human needs index, as a means to measure the impact of introducing a cash crop into the lives of subsistence farmers. The basic human needs index creates a numerical value to measure how a community scores related to housing, water, effluent, energy, food security, health, and education.
Prior to introducing a cash crop, a baseline assessment is conducted of the community, which creates an initial score for each of these human needs, thus providing a basis for comparison to the impact score derived after one or multiple growing seasons. Each area is scored on a scale of 1-10, where 1 represents the lowest value and 10 the highest. This index has a built-in flexibility regarding how a 10 is defined. As it is contingent upon the specific dynamics of the community being assessed. However, as an illustrative, the following is a common application for most of the communities assessed in the small farming communities where Peri-Peri is grown in Zimbabwe, Malawi, and Mozambique. The index is:
Each category is scored using a series of indicators by subtracting from how a 10 is defined. Using water as an example, points are subtracted based on water derived from a borehole or well, how far the farmer has to travel to get to the water source, how frequently it is tested for purity, if it is readily available year-round, the complexity of how it is transported to the home, how frequently it must be fetched and finally, who carries it (children, women) and the safety of the journey. From this combination of factors, a final score is derived. This then establishes the baseline and post a full or multiple growing seasons of the new cash crop these issues are measured again particularly in relation to how the money earned from the new cash crop was spent. To continue the example, if part of the money earned was spent on an animal pulled cart, which replaces hand-carried water over long distances, this would impact the score. Additionally, this cart may also allow for the water to be fetched less frequently because great quantities can now be carried. And finally as driving a cart often is usually the domain of men, who fetches the water may also have changed from a young girl traveling long distances, frequently, carrying a heavy load in unsafe circumstances to a man simply driving an ox or cow-draw cart. This one small intervention, does not change the quality of water or its availability, but it has a large scale impact on many other factors, thus meaningfully changing how the indicator of water would be scored post growing a new cash crop.
The following chart reflects how impact is tracked using the basic human needs index, over time, for a specific community or aggregated for a country :
Cost of a Resilient Life
After using the basic human needs index for multiple years, we realized that while this tool provides meaningful insight, it is not enough to provide the information required to support farmers to navigate from subsistence into a position where they can plan longer-term and build greater resilience. To gain this insight and provide context to how their additional earnings may impact their lives, in 2017, Impact Amplifier developed a country-specific tool, which maps the costs of building what we are calling a “Resilient Life”. This is a life that does not degenerate into destitution because of one bad growing season, a family member becoming sick or the loss of livestock. These shocks are going to occur, but a family at a certain asset and income level can endure these incidents. This tool reflects, in a single image, how much money it takes in both once-off and reoccurring costs to reach this level of stability for a small farmer. It reviews the following costs:
– Building a 50sqm brick home with cement flooring and metal sheet roof
– Basic furniture including a bed, sofa, wardrobe, standard kitchen
– TV
– Accessing water that is within close proximity, affordable, clean, and always available
– Effluent systems
– 80-100 Watt Solar panels to power lights, charge phones, and other small electronics
– Quality public or private medical care, including three visits per year, transportation to the facilities, and medicine from a pharmacy
– Primary and secondary education including fees, uniforms, books and stationary, and when applicable transportation
– Nutritionally balanced diet
– Clothing
– Animals such as cows, chicken, and goats
– Cell-phone and airtime for a month of moderate use
– Personal transportation – bicycle
The following is how we reflect these costs in a single image, thus providing a simple visual tool for understanding this important principle:
This tool provides vital details for how a programme is designed. Being able to determine how small farmers spend their extra income, at different levels, to address their basic human needs and then understanding further what amount of income is required to build resilience has provided us with the tools we need to maximise the impact any small farmer intervention is capable of making.
Look out for Part 2 of this series where we further detail the behaviours and practices that influence the how impact occurs in a small farmer environment.
Tanner Methvin, Partner Impact Amplifier