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©AGRITANI E-Hub/ASEAN eFARMERS ASEAN e-Farmers Project: Can Information Communication Technology, ICT improve Agriculture competitiveness in ASEAN? Video Conference Presentation Improving ICT Access, Sustainability and Security – the World Bank Office, Jakarta 27 August, 2003
©AGRITANI E-Hub/ASEAN eFARMERS The Growing Gap Time Gap The Digital Divide The Digital Divide is real, dangerous, complex -- and growing. The tragic irony of the digital divide is that the very technology that could be facilitating development is actually making the gap bigger. In ASEAN, this gap is growing to the level that member countries feel it is one of the biggest threat that will undermine the regional competitiveness The biggest gap occurs in the agriculture sector
©AGRITANI E-Hub/ASEAN eFARMERS About e-ASEAN To develop a broad and comprehensive action plan with the objective of evolving an ASEAN e-space, and to develop competencies within ASEAN to compete in the global market.
©AGRITANI E-Hub/ASEAN eFARMERS Key Elements of the e-ASEAN Agreement Infrastructure or AII Facilitation of e-Commerce Common ICT market place Capacity building and e-Society E-Government * Agriculture as a key sector to spearhead e-ASEAN
©AGRITANI E-Hub/ASEAN eFARMERS The state of the Agriculture industry million farmers* in the ASEAN region > 50% of the farmers are Indonesians < 1% internet penetration in the sector > 40% never heard a dial tone before > 50% of agriculture trading value go to the middle-men > 70% of our farmers are financed by the middle-men > 70% of our farmers children are deprived from having access to basic education * Include dependants
©AGRITANI E-Hub/ASEAN eFARMERS Primary SourceFactory Transporta tion cost Collection Agent Margin Consumer Price CIF Price Processing cost Broker / Dealer Margin International Shipping Cost Factory Margin Transporta tion cost Dealer Margin Rubber: Rp 3900/kg Palm Oil: Rp /kg Rubber: Rp 4200/kg Rubber: Rp 5250/kg Palm Oil: Rp /kg CIF Price Palm Oil: Rp /kg Illustrative for Rubber and Palm Oil 30% (Original Production cost) 30% (No added value) 40% (Value added) Indonesia case study On average 30-40% of the trading value go to people who “trade on information”
©AGRITANI E-Hub/ASEAN eFARMERS Farmers e-Hub is a practical tool to re-distribute wealth across the agriculture supply chain ProducersBuyers x xx Farmers e-Hub $30-50 Billion savings/year * Accenture estimates x Distributors Retailers
©AGRITANI E-Hub/ASEAN eFARMERS ASEAN eFARMERS e-Hub is not just about matching buyers and sellers … What people see What is required Financial Settlement Shipping and Transportation Financing Certification Warehousing Scheduling Contract Management Catalogue Management Billing & Receviables Management Risk Management The MARKET of ONE: Providing and Integrating all the services required for farmers to execute a complete trade cycle.
©AGRITANI E-Hub/ASEAN eFARMERS How will farmers e-hub dramatically improve farmers economic well-being Today, most of our farmers have no reasons to access the internet hence the demand for internet services is zero. What they are getting today Selling price increase due to direct selling Cost reduction due to direct procurement What they are getting today Cost reduction due to cheaper financing Productivity gain due to ability to produce higher quality harvest The potential up-side for farmers % * Accenture estimates Rp1,000 Rp2,000 Because of the phenomenal potential up-size, the demand for internet access and services within the farming communities will be accelerated
©AGRITANI E-Hub/ASEAN eFARMERS Facilitate the creation of a world class trading infrastructure for agriculture that is efficient, effective and transparent Improve government ability to get more accurate information about agriculture production, demand and supply situation. Facilitate the rapid growth of ASEAN agriculture industry with increased participation of international buyers and the state of the art value added services. Facilitate technology development in rural areas. Reduce the “digital divide” between rural and urban areas from 20 to 5 years. Enhance ASEAN credibility in the international world Dramatically improve the social-economic well-being of more than 35% of ASEAN population Why ASEAN governments are supporting this
©AGRITANI E-Hub/ASEAN eFARMERS Why we call this a killer project AFE Farmers are richer They can buy quality seeds, fertilizers They produce higher quality harvest Promote e- Learning More farmers send children to school More educated people in rural areas Create & Promote SMEs Reduce Urbanizatio n Rate Reduce Urban Crime and Global Terrorism Agriculture is a Strongly Sustainabl e Industry Enhance Rural Developme nt Farmers have access to the Internet Poverty is alleviated Create New Purchasin g Power
©AGRITANI E-Hub/ASEAN eFARMERS Obstacle between the farmers and the e- hub Farmers “Too fragmented”Lack of access to telecommunications Low or inadequate education E-Marketplace
©AGRITANI E-Hub/ASEAN eFARMERS To break the wall, there are other initiatives must be done in parallel E-Marketplace Farmers The consolidation of farming communities around industry best practices eg. Felda in Malaysia Infrastructure building and enhancement in rural areas Technology awareness and education to a large group of farming communities
©AGRITANI E-Hub/ASEAN eFARMERS ASEAN eFarmers Task Force has been established on 22 nd February 2001 to drive this initiative 1 1 ASEAN eFarmers Task Force Farmers e-Hub Infrastructure; Telecoms, Roads etc. Industry consolidation Education 4 4 Research & Development Monitors, facilitates, manages, integrates
©AGRITANI E-Hub/ASEAN eFARMERS ASEAN eFarmers organization structures Regional Taskforce MalaysiaVietnamCambodiaLaos Indonesia ThailandSingaporeBruneiMyanmarPhilippines The regional taskforce will work with the national taskforces which will implement the program at their respective countries. Indonesia has been identified as a pilot site.
©AGRITANI E-Hub/ASEAN eFARMERS Timeline First PhaseThird Phase Nov 01Jun 04 Second Phase Dec IndonesiaMalaysia Thailand Vietnam Philippines 3 Due to the fact that pilot project is determined to be in Indonesia, the first country for the implementation should be Indonesia. Besides, Indonesia has the largest market size From the the similarity of product offerings between Indonesia, Malaysia and Thailand and also the e-business readiness, the next phase for implementation would be in Malaysia and Thailand six months after the implementation in Indonesia Having gained valuable experience from two markets, the next countries for the implementation should be Philippines and Vietnam in parallel Roll Out Phase Start Small, Think Big and Scale Fast Implementation Plan
©AGRITANI E-Hub/ASEAN eFARMERS The significance of this project An e-ASEAN flagship project Local and regional media/press coverage Features in all ASEAN leaders and trade ministers forums Obtained full mandate from SOM-AMAF* ASEAN Secretariat “Killer Initiative”** Working directly with ASEAN-AFTA task force *The highest agriculture and forestry body in ASEAN ** ASEAN eFarmers is sponsored by HE Rudolfo Severino – the secretary general of ASEAN
©AGRITANI E-Hub/ASEAN eFARMERS In Indonesia, this initiative is currently backed by major agencies/organizations Ministry of Co-operatives, Small and Medium Size Enterprises Department of Finance, Government of Republic of Indonesia Indonesia Institute of Sciences (LIPI) (Taufik Abdullah) Department of Agriculture, Government of Republic of Indonesia Bank Rakyat Indonesia Indonesia National ISP Association (APJII) Sucofindo Jambi Province, The Governor of Jambi Kabupaten Kerinci, Bupati of Kerinci Indonesian Derivatives Clearing House (KBI) Jakarta Futures Exchange (BBJ) Indonesian Chamber of Commerce (Kadin)
©AGRITANI E-Hub/ASEAN eFARMERS We are setting a very bold objectives … Digital divide Bring 3-5 million farmers on-line within 5 years Establish 15,000 e-trading hubs across the region in 2 years. Provide 10 million hours of ICT specific training in 2 years. Initiate major technology and industry research projects Create 10,000 small and medium enterprises Social dimension Alleviate poverty; Increase net income of farmers by % Impact on the agriculture industry Increase ASEAN agriculture export by 15-30% Illustrative
©AGRITANI E-Hub/ASEAN eFARMERS The Agritani Alliance ASEANSEC Agritani e-Hub Accenture Microsoft Compaq Farmers co-operatives Research Organizations The Agritani alliance comprises of market makers, government institutions, farmers co-operatives and world leading consulting and IT companies Financial institutions: BRI; Bank of Asia (member bank of ABN-AMRO group); Rabobank etc. Insurance and risk management Transportations, Logistics companies Certification companies The List is Growing …
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