Market Systems Development approach and COVID-19: Why payment based on quality is essential

The current health crisis is turning into an economic crisis and food adulterations are at risk.   The importance of food safety is easily pushed to the background when food security becomes an issue. “With all the additional challenges during the COVID-19 the ‘invisible hand of the market’ is more important than ever and only a Market Systems Development approach can guarantee aggregating the required volumes of quality products for traders and food processors”, says Jan Willem van Casteren, Technical Director at eProd Solutions.

Calculate the product price based on a set of quality indicators

eProd offers multiple options to generate payment based on quality. Each parameter has its own rules to correct the product price, based on set conditions, threshold values and actions. Actions can be monetary, for example, a bonus or fine, but could also be an automated warning. Multiple quality parameters can interact based on flexible algorithms that can be pre-set and correct product prices automatically. For example, a premium price of 1 shilling per kg milk when butter fat is above 4.0%. However, in case the milk batch is sour the lot will be rejected. 

Most important is a transparent communication towards the producers. They likely knew about the quality issues, but now they know that the buyer is also aware. Moreover, the quality issues are recorded and appear on the payment overview or in an SMS message from the buyer to the producer.  

A fair and transparent price adjustment through ICT

There are several challenges when introducing payment based on quality. First, the processing of the payment correction is tedious and requires automation to avoid mistakes and make it affordable. Secondly, communication with the farmers is essential and should be transparent to avoid discouragement. ICT can play a critical role here. The analysis of the quality has to be objective. Often hand grading is the only realistic option but integration with measurement devices is possible for some products.

The sample has to be representative and this is more difficult for some products and some parameters than it is for others. Sampling for Aflatoxin in grains or Salmonella in fresh vegetables, for example, that have low or zero tolerance levels are more of a challenge than milk, olive oil, and argan oil can be easily homogenized. eProd has developed successful integrations with measurement devices, such as ultrasound milk analyzers.  We placed a tutorial movie on Youtube in 2019 for more information click here.

From timely quality measurement in the lab to quick results in the field

The measurement time and location form possibly some of the most complicated hurdles to overcome to introduce quality-based payment. They cannot be separated in practice. Most sophisticated analytical devices are designed for a laboratory setup, which is usually far from where a buyer must take an objective decision to accept or reject a bag of sesame, macadamia, or saffron petals. 

The quality of the product can be determined based on hand grading, but this is tedious and, when sourcing from smallholders that might queue with tens at a time to deliver their products and return to their fields, grading at the collection centers is not always possible. A representative sample can easily be taken to the packhouse of the buyer in the case of grains, pulses, oil crops, etc. However, this would not be possible with highly perishable products such as milk.

eProd developed integrations with common ultrasound milk measurement as early as 2015 but realizes that this method has many challenges. They are typically not designed to take them to milk collection centers. The measurement time is too long. Maintenance is critical which causes the accuracy of payment corrections to be questionable.

To solve this eProd received a grant from the USAID-funded program Kenya Crops Dairy and Market System development program, or KCDMS, implemented by RTI, to develop an alternative device that solves the challenges around quality-based payment in the dairy sector. It should be a mobile device, battery-powered, short measurement time, robust, hygienic, and waterproof, and possible to integrate via cloud and wireless via Bluetooth in case of poor or absent internet.

Near Infrared spectroscopy

The eProd team selected Near Infrared spectroscopy which requires only 2-3 seconds to complete its measurements. It is autonomous battery-powered and offers a range of communication options. An affordable Power Conditioning Unit, or PCU, from a world-leading electronics manufacturer was selected that meets all these criteria.

Calibration sets for milk were collected based on the common milk quality parameters collected by ultrasound milk analyzers, such as butter dat, pH, SNF, etc., and calibrated against the spectroscopy. In collaboration with ICIPE, some tests were done to detect adulterations in honey – another product prone to adulterations and facing similar challenges as in the smallholder dairy sector – as NIR spectroscopy can detect a range of sugars but also enzymes in the honey.

Partnership with Rotterdam School for Industrial Design and Engineering

In close collaboration with Rotterdam School for Industrial Design and Engineering, a casing was developed. “So as to come up with the most appropriate design it is very important to have a good picture of the functions and the desired user processes. In addition, it is important to design a casing in such a way that it does not influence the spectral measurements”, says Bartel Hulst, lecturer of Industrial design and Engineering.

Michelle Tjoen-A-Choy, Julius Leerkamp, and Antoni Renier, three f graduating students took up the assignment to design and develop a casing meeting all the technical requirements, including ergonomic and aesthetic features. The result is an attractive 3-D SLS printed UV-treated casing that provides the company with a cost-effective casing that meets all technical specifications, assisting eProd to offer highly relevant innovative solutions for sourcing from smallholders. 

NIR Spectroscopy offers many opportunities also to quality measurements – adulteration detections – applications for other liquids, such as olive oil and argan oil. It is also suitable for high-value solids where adulterations are common, such as saffron where cheap varieties could be mixed and dilute the quality final product. The beauty is that it is fully integrated with all modules of eProd: traceability, certification, mobile money payment transfers, SMS communication, credit rating, loan repayment, etc.

Would you like to learn more? Please contact us for more info.