6 weeks. Over a dozen farmers. More than a handful of traders.
That was our pilot this year from mid-February to the end of March. What did we achieve? What did we learn? A lot. That's for sure.
8,500 kilograms of onions were traded in this short window. That ended up being an average of 1,400 kilograms, or about 50 bags, per week. That means both farmers and traders used our platform! That means we offered a service that was attractive.
Moreover, we had repeated users from both traders and farmers. How can farmers be repeat users? With onions, you need to harvest them when they are ready. Some onions become ready faster than others, even on the same plot. For a farmer who wants to make the most money, they will harvest their first half or first third and wait to harvest the rest in the next week or so. Spreading out their harvest also hedges their risk against having to sell when the price is lowest. What hurts them is their bargaining power. If you have twice as many onions to sell, you're more likely to be able to negotiate a better price - as it saves the trader some work to find more than one seller. In the end, we had a few farmers that after selling through us once, then asked to sell again. That means we offered a service that was valuable.
Markit Opportunity has a mission to create social impact by increasing smallholder farmer incomes. During the pilot we estimate we increased income from selling onions with us from 10% to 33%! To factors showed this.
The first was the price. Some farmers were able to get above the local market price as we had buyers willing to pay more for high quality. Some prices were as high as 33% more than the local market.
The second reason was due to the implementation of our calibrated, digital scales. Our team was responsible for facilitating each trade on our platform. We came with nets and notebooks to make sure this was done well. Most importantly we brought calibrated digital scales.
Often a trader is expected to bring their own scale and weigh each net. Even when a farmer checks the scale against there's, and there exists a discrepancy, the trader usually wins the negotiating to use their own. Reasons such as "I will have to use this scale when I go to the market" and "I can just go buy from someone else" keep farmers from defending transparency. When comparing scales during trading, we saw scales weighted up to 10% less than what our scales showed. By using our scales, farmers got back their fare share back.
In order to be sustainable, Markit Opportunity has chosen to operate as a for-profit, social enterprise. Being profitable allows us to attract investors and continue to offer our services without the needs of long-term philanthropic grants. During this pilot, our aggregate trades were profitable! That means we were able to organize our staff, organize our users to get matched, check quality on the farms, and trade onions profitably. The foundation of scalability is profitability at the unit level. Our units are trades. This is a very promising outcome for us.
While the pilot has ended, we continue to trade with a few buyers. Onion supply has decreased in Kabati, but many farmers have planted for the next harvest in July and August. By then, we will make many adjustments to our platform to provide even greater social impact, at a larger scale!