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Indonesia wants farmers and fishermen to join the ecommerce revolution

Friday, April 29, 2016 > 08:45:24

(Tech in Asia by )

Yesterday at the opening of the Indonesia Ecommrce Summit, president Joko Widodo and several of his ministers, including tech minister Rudiantara and trade minister Thomas Lembong, took the stage.

Widodo once again stressed how relevant growing Indonesia’s digital economy is to his agenda – remember the target is for ecommerce to grow to the point that people spend US$130 billion online in 2020.

Those who follow his speeches on the subject have noticed a new tune: government ambitions now extend to bringing innovation to industries still largely untouched by digital transformation, like agriculture and fisheries.

Earlier this month, the president kicked off a government program to that effect in Brebes, a small town in central Java. The area is known nationwide as a major producer of spring onions.

Brebes and its onion farmers are now some sort of a live test lab for digital tools that are supposed to improve farmers’ livelihoods.

“Advances in technology have to benefit the entire population, and the government has to push farmers and small businesses in Indonesia to ‘go digital,’” tech minister Rudiantara, who was also present at the Brebes launch, said on the occasion.

Startups doing field work

A handful of startups were brought along on the Brebes field trip.

Petani is an Android app created by 8Villages, a startup headquartered in Singapore that’s been developing information services for Southeast Asian farmers since 2011 – initially SMS-based.

LimaKilo and TaniHub have very similar concepts – they want to help farmers connect with consumers directly, cutting out some of the many middlemen that drive prices up for consumers and keep farmers’ profit margins low. Pantau Harga is an app that lets producers and consumers check commodity prices in real time.

So the theory: each of those three startups is new to the world of agriculture tech. They emerged in 2015 following hackathons or, in the case of TaniHub, a Startup Weekend event. They’ll have as much to learn about the world of agriculture as the farmers need to learn about the world of digital technology.

TaniHub co-founder Michael Jovan Sugianto admits there’s a long distance to cover. The team participated in the Brebes program to literally gain field experience. “I learned that in building an agriculture startup, we have to get in touch directly with farmers and everyone involved in the industry. We now know who we have to address,” he told Tech in Asia.

LimaKilo appears to be a little bit further along.

“We sell around one ton of onions in a month and 60 to 70 kilograms of organic vegetables,” says co-founder Arief Setiawan. The onions are, of course, from Brebes.

“We use cargo to deliver [the product to Jakarta] and then [use] other delivery startups to deliver to customers in Jakarta, Depok, Tangerang, and Bekasi,” Arief explains.

‘The one with the mustache’

A more established player presenting itself in Brebes – though not one of the apps highlighted by the government – is Sikumis. (It’s a playful name meaning “the one with the moustache.”)

Sikumis is a marketplace for farmers and fishers and the one best positioned to be an agritech changemaker in the foreseeable future.

The small firm has subsisted since 2008, first as an online site selling industrial tools and machines. When it realized agricultural equipment was the category most in demand, it decided to zoom in on this user group. Sikumis is now a place where agri and aqua farmers buy tools, fertilizers, and other equipment. It also has a community forum attached. About two years ago, Sikumis decided to turn itself into a marketplace, which also lets farmers sell their produce.

“We have an emotional connection with many farmers, ranchers or fishermen,” says co-founder Chintya Fransisca. Through its marketplace, Sikumis wants to facilitate sales to Indonesian wholesalers, and even international buyers.

“We feel we are more familiar with the ins and outs of this field so that we know the right way to run,” she says.

Sikumis claims to book an average monthly revenue of “hundreds of millions” of Indonesian rupiah (IDR 100 million = US$7,573) and has approximately 6,000 different items listed. It has never raised venture funding.

‘It has to come from the grassroots’

Asked during a press conference at the Indonesia Ecommrce Summit about the status of the Brebes program and what continued government support agritech startups can expect, trade minister Thomas Lembong said all ministries involved were committed to keeping the initiative going.

He pointed out that he saw the government’s role more in creating a general framework for development, such as in telecommunications, infrastructure, and logistics. A change for the farmers, he said, “had to come from the grassroots,” and could not be achieved through “blue sky proposals” thought up in bureaucrats’ offices.

It’s up to startups then to keep pushing the boundaries and demand the government support they need.

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