Tuesday 23 Jul 2024
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This article first appeared in Digital Edge, The Edge Malaysia Weekly on September 20, 2021 - September 26, 2021

Every year during the rice planting and harvest seasons, the Dusun subsistence farming community in the interior of Sabah get together for an act of mitatabang — which stands for communal work in the Kadazan language — where they lend a hand to neighbours to manage their ancestral plots.

In return, they get a portion of the harvest when the time comes and the promise of help to get through grunt work when it is their turn. As payment is in the form of 400kg to 500kg sacks of rice, they have little opportunity to monetise it, with rice being a heavily regulated crop.

“You would be surprised, but in the kampungs, these farmers actually have no problem with food at all. They have backyard paddy fields and each house is equipped with a storage room to keep the rice [that is] harvested twice a year. The only drawback is they have no money,” says AgriData Portal Sdn Bhd co-founder Matthew Johnny Kulai, who is the start-up’s brand and business developer.

AgriData is a business-to-business (B2B) procurement marketplace that connects farmers and retailers to a centralised database for the agricultural supply and demand chain.

“I don’t blame them. It is not easy to monetise crops grown by smallholders, be it rice or vegetables, because there is a disconnect between them and the market,” he says.

The brainwave to build a B2B marketplace came to Matthew when he took over and rebooted his family’s 21-acre farm in Keningau — which lies about 110km south of Kota Kinabalu — transforming it into an organic fruit orchard and vegetable cultivation site called Hinsou Farm, where he grows avocado, sacha inchi (native superfood) and ginger, among others.

The 23-year-old, who recently completed a degree in material science and engineering at Swansea University in Wales, decided to take up agriculture even before he returned home last year.

“I grew up in the pedalaman (interior) and my father — who is a lawyer — owned farmland, which he worked on to pass time. He loved fruit trees and grew durians and rambutans and whatnot. In the five years I was overseas, all I ever wanted was to return to that,” says Matthew.

Seeing that agriculture technology (agritech) had grown by leaps and bounds over the years, he was keen to modernise his father’s farm with technologies such as smart fertigation as well as to seize the opportunity to introduce superfoods such as avocados and sacha inchi.

But while Matthew was developing the farm, he noticed that there were plenty of underutilised plots, where subsistence crops such as rice and vegetables were predominant.

Further engagements revealed that farmers, although producing more than enough for self-consumption, neither knew how to market their excess produce nor turn their farms into profitable ventures. So, they took up odd jobs in neighbouring towns whenever they needed money.

Matthew knew he could do more for his fellow farmers. He then presented the problems to childhood friend Wong Jun Kaih, and they started working on an app that would connect these farmers to a marketplace of retailers and bypass intermediaries.

Wong — who is a full stack developer and an electrical and electronics engineering student at Nanyang Technological University in Singapore — suggested that the best way to address the problem would be to digitalise the process and enable artificial intelligence (AI), as farmers wanted a less labour-intensive supply chain process, a one-stop collection centre, consistent buyers and logistics solutions.

Just before the duo took their idea forward by entering the Ministry of Science, Technology and Innovation’s MYHackathon 2020 series, they were joined by Mohd Nazri Mohammad Ali, Natasha Granada and Marissa Johnny Kulai.

In December last year, during the Kota Kinabalu leg of the hackathon, AgriData was selected as one of six start-ups to qualify for a conditional grant of RM250,000 to co-create digital solutions that address people’s needs.

“Most of the farmers here grow for their own consumption, so they don’t have to buy food. But for money, they are forced to leave their farms, take on odd jobs and farm on the weekends,” says Matthew.

“If they could monetise their excess produce, they would not have to do odd jobs. By giving them market accessibility, we’re trying to give them job security and help them think of agriculture as a business [rather than as a means of subsistence].

“Currently, retailers and farmers do not have a single platform to market, communicate and transact. They communicate through WhatsApp or [Facebook] Messenger and this process becomes inefficient as the variety of crops increases.

“By streamlining the buy and sell process through the AgriData platform, consumers and health officials will be able to track the source and history of the produce sold, creating transparency and traceability, which are paramount when responding to agricultural disease-related outbreaks.”

Moreover, things are made complicated because the farmers do not see their occupation as being a lucrative endeavour because it is labour intensive and few give it consistent commitment as planting to harvest takes three months to a year, or more.

“There are a lot of overhead costs. Most farms here are run by one person, which means [the same] person handles the right seedlings, manages floods, cares for the crops right up to harvest season and then deals with marketing and logistics,” says Matthew.

“That is also why Malaysia is so dependent on imports of certain types of food, because there is a disconnect in the market. The farmers in the villages in Sabah, for example, have tonnes of food in their storage but they can’t monetise it.”

As the barrier to entry for rice is high — seeing that there are certifications required for large-scale supply, which the smallholders lack — the AgriData team decided to tackle the marketing of vegetables first.

“So, similar to Shopee and Lazada, we created an online kebun (farm) on the app, where farmers can list their vegetables, payment terms and logistics. We also built a platform where restaurants and supermarkets can source their produce from just one place. For example, in Australia or South Korea, you can just dial a number or go to a website to get quotations for the produce you want to buy and sell without much trouble,” says Matthew.

“Similarly, if a retailer wants to buy pineapples or Tambunan ginger from Sabah to sell in Peninsular Malaysia, he can just browse the app, select the quantity he wants and have them delivered accordingly.”

The app is also a way for farmers to keep track of supply and demand as well as sales and profits as there is a built-in productivity tool, he adds.

In the long run, the team hopes to help farmers rotate their crops using data as their guide so that there is consistent pricing for the produce.

“When we have enough data, the AI will be able to forecast the demand for a certain type of vegetable [in the following] month, say retailers need 100kg of sawi. So, the farmers can plan their crops to mitigate the fluctuations accordingly,” says Matthew.

Currently, there are 50 farms listed on the app and last month, AgriData onboarded its first retailer, City Gourmet in Kota Kinabalu.

AgriData also made it to the top 20 of Petronas’ Future Tech 2.0 Accelerator Programme, a 12-week online programme, conducted with venture capital firm 500 Startups, Telekom Malaysia Bhd and Sime Darby Plantation Bhd.

Matthew believes AgriData will be able to onboard at least 40% of the 200 retailers in the state by the end of the year. Once the app gains a strong foothold, he hopes that it will serve the interests of small farmers across the country.

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