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."