E-COMMERCE SOLUTIONS FOR FARMERS

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E-commerce means Electronic commerce. It underscores the buying and selling of goods and services over the internet. According to ThinkShift, e-commerce is generically defined as any commercial transaction conducted electronically. It includes online trading, digital subscription services, email and text-based transactions. 

Britannica money defines it as an economic activity that consists of business-to-consumer, business-to-business, consumer-to-business, and consumer-to-consumer commerce. It also involves internal organisational transactions that support those activities. In particular, E-commerce solutions for farmers involve the electronic and digital transactions of all activities that enable the success of their enterprise. It includes inputs, production practices, access to data and information, sales of their commodities, marketing, branding, etc.

Farmers are traditionally saddled with the responsibility of providing food through various practices. In most cases, they are overwhelmed by the challenges of production, making marketing their products an additional burden they prefer to leave to middlemen.. 

Over the years, these traditional agricultural value chains have included multiple intermediaries between farmers and consumers. Characteristically, farmers produce and sell their produce at the farm gates to middlemen. The middlemen consequently serve as the conduit through the intermediaries before the product gets to the final consumer. These transition stages have direct cost implications on the final product price. Consequently, products are sold at higher prices than at the farm gate. They also pass through unnecessarily long supply chains, which can sometimes impact product quality by the time they reach consumers. As a result, farmers receive only a small portion of the price paid by the end consumer, as each intermediary in the value chain takes a margin. 

E-commerce has disrupted the traditional agricultural value chain by reducing or eliminating intermediaries from both the input supply to farming activities and the output distribution to consumers. Farmers can now sell directly to consumers, delivering fresh produce straight from their farms, and receive payments almost instantly after transactions are completed.

BRIEF HISTORY OF E-COMMERCE IN AGRICULTURE

E-commerce dates back to the early days of the internet, particularly with the adoption of the World Wide Web in 1991 and the launch of the first web browser in 1993. With advancements in internet and information technology, e-commerce quickly penetrated various industries, including agriculture. According to ThinkShift its use in agriculture has been established for at least two to three decades, playing critical roles in areas such as grain trading, precision agriculture, data subscription services, financing, banking, and retail transactions.

In recent times, e-commerce has moved to mobile devices which include tablets, laptops, and wearable products such as watches through various software applications. Today, it has completely transformed how farmers conduct transactions, interact with their products and customers, and revolutionised the operations of the agricultural value chain.

IMPORTANCE OF E-COMMERCE TO FARMERS

In its utilisation, e-commerce helps to satisfactorily remove the constraints in food distribution and supply while promoting food and nutrition security. Farmers can access markets and plan their sales before harvesting their crops. Similarly, they can project for their animals before they become market-ready. 

The global e-commerce market for farming products is growing rapidly, driven by rising internet penetration, increasing digital literacy among farmers, and the expansion of agricultural e-commerce platforms in emerging economies, according to WeMarket Research. Furthermore, governments are aligning with the opportunities domiciled in this game-changing technology by investing more towards the development of the farming sector. The global population increase is also contributing to the rising demand for food products. A major event that recently accelerated the e-commerce of agricultural products was the COVID-19 pandemic. E-commerce played a crucial role in reinforcing the resilience of the agri-food supply chain and helped stabilise off-farm employment for farmers, as reported by Guo, et. al.

The global market forecast for the agricultural E-commerce market in 2022 was USD 30,680 million while the forecast in 2033 is USD 50,630 million growing at a CAGR of 7.42% as reported by WeMarket Research. This forecast shows a growing trend of E-commerce solutions for farmers and its continued influence in agriculture and the food ecosystem.

BENEFITS OF E-COMMERCE SOLUTIONS TO FARMERS

Some of the benefits of e-commerce to farmers include:

1. It saves time by enabling farmers to conveniently purchase farm inputs and seeds from reliable sources online. This process eliminates the need for traditional purchasing methods. Farmers no longer have to spend time travelling to physical stores or dealing with paperwork. With just a few clicks, they can browse through a wide range of products, compare prices, and place orders from the comfort of their homes or farms. 

2. Farmers have the liberty to choose the most appropriate input for their farm’s needs from various vendors. These choices help farmers make informed decisions by reading through the detailed information as displayed unlike going to physical stores from one place to another saving avoidable costs. In addition, they can also conveniently compare prices of inputs and select the best price based on their capability.

3. E-commerce platforms facilitate direct interactions between farmers and buyers which fosters the right connection that helps to overcome information gaps while communicating effectively to drive their unique selling points. 

4. E-commerce platforms enable farmers to enhance their bargaining power and establish a sustainable sales channel for their enterprise.

5. E-commerce platforms enhance market expansion, help to open up the farmers to new markets, and potentially increase sales. Farmers can do this while establishing long-term relationships with their prospective clients.

Ultimately, e-commerce platforms as part of other technology solutions will help farmers improve their operational efficiency, reduce product wastage, and enhance their operation’s productivity, profitability, and sustainability.

 

Source: Rural Leaders

CHALLENGES OF E-COMMERCE SOLUTIONS TO FARMERS

Some of the identified challenges include:

1. Creating the required visibility to be seen by new and prospective customers. It may take some time with strategic plans and programs to drive customers to the farmer’s store online. 

2. Developing and creating the right connection with your customers will need to be intentionally designed against the physical visit to the farm location to interact physically.

3. Limited digital literacy: Many farmers are not technology literate and lack experience with digital platforms, making it difficult to navigate E-commerce sites.

4. Poor internet connectivity: Rural areas where most of these farms are situated often have unreliable or slow internet that hinders online transactions and limits the payment for the software subscriptions.

5. Website/user interface complexity: Complex websites and e-commerce intensity use over some time can confuse farmers, leading to abandonment.

6. Payment gateway issues: Technical problems with payment processing can frustrate farmers and make farmers lose interest in operating an e-commerce platform. At other times, there may be payment delays which often leads to frustrations.

7. There may be logistical challenges in transportation and delivery where products are not delivered due to infrastructural challenges. Likewise, storage and handling challenges may affect the order timing and product availability in their high-quality state to consumers.

Some of the identified solutions to these challenges are:

1. Establishing user-friendly platforms and training. Easy to navigate and operate can also facilitate easy use for farmers and customers.

2. Solving connectivity issues for online transactions and implementing offline payment options (e.g., cash on delivery). Online payment gateway issues are being replaced using offline payment options for better effectiveness.

3. Logistics and supply chain support. Outsourcing this service to specialised organisations takes the burden off while integrating the cost into the overall product cost helps in addressing logistics challenges.

4. Marketing and branding assistance. Utilising market and brand organisations can help with the visibility and project the products online. A mutual, convenient payment agreement that takes out unnecessary financial pressure can be agreed by the parties involved.

5. Digital literacy programs. Farmers can be exposed to digital literacy programs customised to their exposure and level of education for them to take full advantage of the benefits inherent.

Addressing these challenges can lead to more effective e-commerce solutions for farmers, enhancing their livelihoods and expanding their access to markets.

CONCLUSION

E-commerce solutions have come to take their roots and relevance in the food and agricultural landscape driving transactions, distribution, markets, and data transfer as opportunities for technology investments and investors across the value chains. It is imperative to align farming operations in this regard to maximise its benefits for their enterprises.