E-Commerce for Farmers

Coconut farmers in the country are surely rejoicing with the creation of the coconut levy fund which allotted an initial P1 billion as subsidy for them.

But the party’s not over yet. At the Department of Agriculture, people are working double time on a network that would allow Filipino farmers to make use of the Internet and engage in electronic trading or e-commerce.

Since last August, the DA’s Agribusiness and Marketing Assistance Service (DA-AMAS) has been going from island to island conducting consultative and awareness seminars, educating farmers on the benefits of e-commerce.

Agriculture Assistant Secretary Theresa Capellan, the force behind DA-AMAS, said these "baby steps" are meant to allow our farmers to leapfrog into the new economy.

"For a long time, the DA has focused on the production side of agriculture. It is our responsibility to make sure that farmers produce grains, that they raise poultry, and that they breed the right fish or cattle. That was okay during the time when the globalization trend was not yet in place. The farmers then need not worry where to market their goods. Their only concern was how to produce those goods," she said.

Capellan noted that such is no longer the case. Because of globalization, the market and competition have become very stiff. "Farmers now have to face the challenge by reorienting themselves to become more marketable," she pointed out.

For this and more, Agriculture Secretary Edgardo Angara created the position of assistant secretary for agribusiness market development and investment. He wanted to address the gap between the farmers and their markets. The bottomline is to make Filipino farmers more marketable in the global market.

And Capellan appeared to be the right man, er woman, for the job.

Often referred to as a balikbayan in the department, Capellan started her career at the DA and later joined an IT consulting firm focusing on enabling various educational institutions. In October last year, Angara invited Capellan back to the department to head the DA-AMAS.

"Secretary Angara believes that marketing and IT are very important components for the modernization of agriculture," she said. "The market development aspect of the DA needed help. We want to make use of IT in developing new markets for our farmers."

The edge

The Philippines has a population of about 71 million, 45 percent of which still depend on agriculture. This means about 30 million Filipinos, young and old, are still rooted deeply in farming.

And Capellan sees this as the country’s edge under the emerging new world order.

"Many countries no longer have farmers and they rely on other countries for their food supply," she said.

The DA has identified 13 agricultural products which, it says, are heavily in demand abroad. At the top of its list is abaca, the hemp used in making ropes and fabrics. "There are only two major abaca producers in the world. And the Philippines is one of them," Capellan said.

Second is mango. Capellan said Philippine mango is one of the best, if not the best in the world. Third is pineapple, the supply of which is controlled by the country. Fourth is banana which is not only exported raw but is also processed into banana chips, a very popular snack in Europe.

Down the list are carrageenan (the country dominates the world market for this type of seaweed), bangus, tilapia, poultry, hogs, eggs, onions, coconut and cutflowers.

According to Capellan, the DA-AMAS will be launching a marketplace before the end of this year to showcase the country’s top agricultural products. It will be a virtual marketplace, where producers can advertise what they need and sellers can post online what they want to trade.

The DA-AMAS, Capellan said, will be training its 15 personnel (there’s currently one staffer per region) to gather information from cooperatives and post them online. "We will make it a habit that we get from the cooperatives and farmers, every harvest time or even during the planting season, an estimate of the projected harvest."

Capellan encourages the private sector to come up with projects that will empower the agricultural sector, especially the farmers. "The marketplace that we’re going to launch is only promotional. We can’t do anything transactional that has anything to do with money. So we’d rather support private sector groups that will come up with transactional marketplaces for farmers and link them to our site."

This early, B2BPriceNow.com has thrown its support behind the DA-AMAS’ initiative. "We want to give farmers freedom of choice as to which B2B will suit their needs. The same shall also apply to logistic entities and the banks," said Capellan.

The challenges

Creating a marketplace is one thing; getting the sellers to that marketplace is another.

Capellan said they are working on ways to create and facilitate encounters between farmers and buyers as well as between farmers and investors. But such, she said, is often easier said than done.

"Because of the geography of the Philippines, we cannot just lump all farmers in one corner and present them to the world. We are an archipelago, with 7,100 islands, and we are fragmented into regions. It’s very difficult to locate the farmers," she lamented.

Capellan added that the DA does not yet have the resources that other agencies enjoy. In simple terms, the DA does not yet have the funds to educate farmers and make them "e-commerce literate."

"We oftentimes encounter cases where one farmer will produce one type of crop, say potato, then realize later that the buyer has a different specification," she said.

Capellan explained that what they, in the DA, want to do is to create a virtual marketplace where farmers can post their crops and buyers can list their requirements.

She plans to start this in the country’s 108 cities where there are Internet service providers (ISPs) or Internet cafés. And she intends to start with cooperatives already existing in these cities. "The cooperatives can access this virtual marketplace," she said.

Capellan sees three challenges which the DA has to hurdle before its dream of making a virtual, global marketplace is realized

The first is access. "You have a situation where the countryside is really not that developed. Giving farmers access to the Internet is one major concern. How do we ensure that they have access? If we can solve that, we’ll be leaping forward into the future," she said.

The second is literacy. Ask a farmer in nearby places like Laguna or Bulacan what the Internet is and the most you may get is a blank look or a sheepish grin.

"Unlike the service sector or the industrial sector, our farming sector has a lower literacy rate. Making them computer-literate will be a challenge. We’re encouraging various industry associations to support this project," Capellan said.

The DA assistant secretary added that once you have hurdled these two challenges, meaning you have given the farmers access to computers and have taught them how to log into the Internet, how to surf the Web and send e-mails, then the third thing you must fix is the government itself.

She admitted that the government still lives up to its sad reputation of being "slow." And with this handicap, it cannot really give assurances that the virtual marketplace it plans to create will have timely and relevant information and will allow safe and secure transactions.

"But things are now moving at Internet speed. It’s a different level now and we will have to adjust to that. It will require a lot of work to put timely information and act on opportunities immediately," she said.