How a Tech Hero Helps Indonesian Farmers Stay Out of Debt - Umm Aasiyah

Question: What do Indonesian farmers and a social networker have in common?

RegoPantes of course!

It’s not often I come across inspirational stories; stories that are based on raw life experiences and that are sensationally rousing. It’s also not often I hear about a social network founder turn champion among exploited famers in Indonesia.

Reading about Sanny Gaddafi and the launch of his smartphone app - RegoPantes - is exactly how I feel: I’m in awe. Not only has he empowered rural Indonesian farmers, he has also side-stepped exploitative middlemen and offered farmers a solution to sustainable living. Brownie points there Sanny, my friend!

The launch of RegoPantes reminds me of the old adage, “Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.”

Farmers and Farming

Agriculture in Indonesia is one of the key sectors of the Indonesian economy. Typically, the agricultural sector of Indonesia comprises of two types:

1. The large plantations that tend to focus on export commodities, such as palm oil and rubber.

2. Small scale farmers who focus on horticultural commodities to supply the food consumption of the local and regional population.

This makes approximately one in three Indonesians farmers. They are also some of Indonesia’s poorest people - making up no less than 30% of the country’s low income earners. The challenge of farm sizes being too small to generate enough income causes the farmers to rely heavily on the middlemen who act as the bridge between them and consumers. Harvested crops go through as many as eight middlemen before they end up in retail. Each middleman typically earns a 10-20% margin. To further maximise their profits, the merchants pay farmers as little as they can. They do this either by colluding to suppress the prices of perishables or by exploiting the fact that farmers are indebted to them; as many of them borrowed the money that allowed them to buy seeds and fertilisers.

By the time the produce reaches the consumers, the prices have become very high when, in fact, the farmers sold them for very low prices to begin with. It’s a vicious cycle of poverty. Until…

A Fair Price for Crops

…now.

In 2016, a new partner with a background in agricultural studies joined 8villages as the new COO. Prior to joining the company, Wim Prihanto had pitched the RegoPantes idea. And what a fantastic pitch it was!

This is how RegoPantes works.

Before harvesting, farmers post information about their crops on the platform. Consumers hit ‘buy’ and pay. Fresh produce then gets delivered directly to the customers shortly after harvest without going through middlemen. And that’s it! How simple?

So, “how does the app determine a fair price?” I hear you ask. Mr Wim explains, “In the offline world, we survey farmer price and market price. And then the numbers go through a formula to determine the fair price.”  

Effectively, by dropping the middlemen, farmers can earn more while customers pay less. Marvellous!

A Start-up Guru

Sanny is an experienced developer and serial entrepreneur who specialises in niche social networks. He is very active in the Indonesian start up community as one of the #StartupLokal's Initiator and one of the Founder Institute's director.

In 2004, he developed the first Indonesian social networking site, FUPEI (Friends Uniting Program Especially Indonesian), and managed to register 200,000 users in just two years. This magnificent feat piqued the interest of investors from the United States, but due to the 2008 global financial crisis, they soon dismissed the venture.

Social Network For Farmers

That was when an acquaintance suggested they build a social networking platform to help farmers; a no-brainer for Sanny because he had grown up with children of farmers and had witnessed their plight first-hand.

“I was always looking outside Indonesia for ideas. But this guy from abroad tried to convince me to see the problems we can solve inside Indonesia. It totally made sense,” says Sanny.

Empowering Farmers Through Information

And so 8villages was born. Founded in 2012, 8villages’ conception was to empower rural Indonesian farmers by giving them agricultural best practices and market prices. The service included the offering of daily farming tips. Due to the lack of 3G signal in rural areas, the first platform they built was an SMS-based service where subscribers were put into communities based on their location and the types of crops they grew. Subscribers could also text in their questions which would get answered by experts, all without the need for internet connection.  

However, once the farmers became better at farming - producing better crops in larger quantities - they started to ask the experts: “How come I am not earning more?” That was when the problem of the middlemen came into sharp focus.

Unique Selling Point

The concept of a farm-to-home smartphone app is not new, even in Indonesia. Two features set RegoPantes apart from their competition. Firstly, they do not earn through commission, because that would essentially make them the new middleman. Secondly, consumers can browse each farmer’s profile and decide which ones to buy from.

Feedback so Far?

The RegoPantes app went live in September 2017. To date, seven rounds of shipment have been made to over 100 customers. And around 700 small farmers have signed up as suppliers.  As demand goes up, these numbers are expected to increase rapidly. Early feedback from farmers is also promising.

As one farmer shares, “I own two small plots of farmland in the district of Magelang in Central Java, growing crops like potato and broccoli. Before RegoPantes, my income was about Rp 700,000 per planting cycle. With RegoPantes, my sales doubled. Now my income is Rp 1 million to Rp1.5 million per cycle.”

Reactions from consumers seem equally encouraging. Buying directly from farmers means they get cheaper and fresher produce, with the added convenience of home delivery.

My Thoughts

I found 8villages to be an inspiring company. It’s a young tech firm, and most of its staff are in their early twenties. A few are younger still, in their late teens. Needless to say, the inside of the open plan office buzzes with a youthful and creative energy. The credentials of these youthful tech-savvies include experienced marketers, agronomists, software, and telecommunications engineers.

Who would have thought that their mind-boggling codes would change the lives of rural farmers hundreds of thousands of kilometres away?

This is a real-life story of charity; exemplary efforts which highlight the plight of desperate farmers and immobilise cheating middlemen. This smartphone app gives dignity back to once exploited farmers. By providing up-to-date industry information through savvy technology, the farmers are empowered, they are sustained, and they have a residual income.

Umm Aasiyah is a lover of history and a physics enthusiast. A home educator to three sassy broods, she’s a blogger, life coach, and a foodie.

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indonesian farmers avoid debt by cutting out the middleman using an app