Harnessing E-commerce in Agriculture: Transforming Farming for the Future

Content

• introduction to  Agri e-commerce
• Agri e-commerce enablers
• Ways developed markets have adopted
• Benefits of Agri e-commerce
• challenges farmers face adopting e-commerce
• Conclusion.

 E-commerce, or electronic commerce, refers to the buying and selling of goods and services over the internet. E-commerce has had a significant impact on just about every industry, from consumer electronics and clothing to entertainment and personal care. However the agricultural sector is one of the few remaining sectors where E-commerce is yet to have a significant impact. There are several reasons for this;

• The Agri supply chain is often controlled by well entrenched intermediaries(middlemen)
• The logistical challenge of handling perishable products is complex. Most consumers still prefer to buy groceries in person rather than online, given the inconsistent physical appearance of fresh produce especially fruits and vegetables.

In developed markets, online bulk orders of fresh of fresh produce are already common among businesses such as hotels and restaurants. In the consumer market, online grocery orders are also starting to gain traction. In the US for example, online grocery sales doubled between 2014 and 2018 and now account for around 7 percent of the total grocery market.

The relevance of e-commerce in agriculture cannot be overstated. With traditional markets limited by geography and physical constraints, E-commerce platforms enable farmers to market directly to consumers, eliminating middlemen and providing better pricing for both parties. This shift not only increases profitability for farmers but also allows consumers to access fresher, locally-sourced products conveniently.

For Agri E-commerce to be successful, the following enablers must be in place;

• Mobile internet penetration; connectivity enables buyers to access online services, including Agri e-commerce services, there are about  2.5 billion mobile internet user in developing countries while smart smart phone penetration is 53.8percent in these regions.
• Logistics network; This includes infrastructure such as roads, markets with a developed logistics infrastructure are better suited for e-commerce.
• Digital payments; E-commerce services in general are facilitated by digital payment solutions, while Debit and credit penetration is low in developing countries, mobile money is a useful payment solution for various transactions. Digital payments accelerate the transaction processes and avoid the problems associated with cash-on-delivery for example fraud, while some users continue to perceive digital payments as unsecure and show distrust in ecommerce and online payments.
• Agricultural readiness; To succeed, Agri e-commerce  providers require the agricultural sector to be equipped for e-commerce for example farmers having access to mobile internet and devices, perform key tasks such as uploading details of produce for sale. it is beneficial for farmers to have experience with formal value chains, understand quality standards and have relatively high productivity.
• Urbanization; A busier lifestyle in urban areas could be a catalyst for consumers shifting to Agri-commerce. An increase in urbanization has the potential to increase the number of customers for e-commerce services.
• Income structure; The rise in the amount of disposable income leads to changing food consumption and lifestyle patterns which Agri-commerce can meet .

While developed countries (markets ) have adapted E-commerce, below are some of the ways they have adopted;

• Established e-commerce platforms expanding into the grocery segment for example Amazon launched its online grocery delivery service, Amazon fresh.
• Offline grocery stores opening online channels.
• Pure play Agri e-commerce business.

What are the benefits of Agri e-commerce?

• Reduce wastage; there is reduction of post harvest wastage through improving efficiency. According to FAO, a third of food produced for human consumption is wasted .
• Improve incomes; online platforms provide transparency and visibility of market prices to farmers , resulting in fairer prices compared to those offered by middlemen.
• Increase productivity; the economic benefits such as improved incomes, can serve as an incentive for farmers to increase their on-farm productivity.
• Financial inclusion, through mobile money and other digital solutions on Agri ecommerce  platforms, farmers build a digital history of their businesses transaction which in turn could allow them to demonstrate their credit worthiness to institutions.
• Uptake of e-commerce services can have a direct positive  impact on services such as mobile money.

Despite the benefits, farmers face several obstacles in the transition to e-commerce. Many lack access to high-speed internet, particularly in rural areas, hindering their ability to go online. Additionally, limited technical knowledge can deter farmers from taking advantage of digital platforms.

 In conclusion, e-commerce represents an exciting frontier for agriculture that can reshape the industry and empower farmers. As they embrace this digital transformation, farmers stand to benefit from new markets, increased sales, and improved consumer engagement.

Have you adopted E-commerce in your farm business? What are the e-commerce strategies your using to market your Agri products?