Internet trade to boost income of ASEAN's farmers

Internet trade to boost income of ASEAN's farmers

KUALA LUMPUR (AFP): Southeast Asia's poor farmers will have a chance to raise their incomes and leapfrog decades of underdevelopment when a regional project allowing them to trade their products via the Internet is launched this year.

The "ASEAN e-Farmers" initiative, described as a project with enormous potential, will start in Indonesia in November and expand to the Philippines, Thailand and Vietnam in two years.

The project aims to triple the income of some 200 million smallholders in the region, who contribute about 40 percent of agricultural trade worth an estimated US$200 billion a year, said Idros Abdul Hamid, project director with the ASEAN Secretariat.

"The e-Farmers will be the largest and most comprehensive electronic trading hub for farmers in the Asia-Pacific," Idros told AFP in an interview on the sidelines of last week's ASEAN telecoms ministers meeting in Kuala Lumpur.

The project is spearheaded by the Jakarta-based secretariat of the Association of Southeast Asian Nations and by Agritani International, a company formed by a group of industry players.

The virtual marketplace will begin with four commodities -- rubber, palmoil, sugarcane and paddy -- and involve an initial 10,000 smallholders spread over central Java and Sumatra.

It will link farmers in remote villages directly to institutional buyers in China, Japan, South Korea, India and possibly Europe, helping them to cut dependence on middlemen.

The "one-stop hub" provides a complete range of services from delivery, finance and insurance to product certification. It has signed up Bank Rakyat Indonesia to handle payment.

Farmers can trade individually or hold an auction for their crop. Those in different countries can consolidate and trade as a group to command higher prices.

Idros said ASEAN's agriculture sector suffers serious inefficiencies -- estimated at 30-40 percent of the final consumer price -- due to farmers' lack of access to market information and to the market itself.

"ASEAN has some of the poorest farmers in the world. They are fragmented and command little leverage when it comes to pricing. Many are poorly educated and have no access to skills," he said.

"The situation leads to market inefficiency and causes a major mismatch between the price farmers are getting and what buyers are paying."

Idros said a recent study showed that Indonesian farmers take home only about $16-$20 a month for every hectare of land they own, but the e-Farmers project could triple their income.

There are however pitfalls to the ambitious project.

Reaching out to impoverished farmers in far flung corners will be a tall task as only about six million of the region's half a billion citizens are plugged into the Internet.

There are also policy issues to consider in such cross-border trading.

Language and cultural barriers could also hamper the project.

But Idros described e-Farmers as a "killer project" that would take technology "beyond the urban walls" and enrich a large population in the region.

Farmers under the program will receive computer training and plans are being finalized on how to get them online.

"Big players could hardwire to the e-hub. Small farmers can go to post offices or schools and we are also looking at a possible dedicated e-channel on TV," he said.

The hub will provide a multi-currency trading system and will start in the English and Indonesian languages, with translation services under way for more languages.

Idros said the secretariat had received a positive response from farmers' cooperatives in Indonesia and would launch a roadshow to sell the idea to institutional buyers outside the region.

He said Cambodia has also expressed interest.

"It will be a dream come true for ASEAN farmers," Idros said.

"e-Farmers will create a positive cycle in rural areas. Farmers with more cash will spend more on education and health, and this also relieves the government of having to give high subsidies."