e-Commerce to the rescue for SMALL-SCALE farmers

LEDWABA

Roy Nohari runs a sugar cane and vegetable farm in Tongaat, some 40km north of Durban in KwaZulu-Natal. For as long as he can remember, the fresh produce market has always served as a central point of conducting business for both small- and large-scale commercial farmers.

“We are able to display our produce and over time establish a list of customers, who then contact us directly over the phone,” says Nohari. “But we still meet them at the market because it is the easiest and most central point for everyone.”

This all changed in 2020, as the COVID-19 pandemic altered how people conducted business of all kinds. A 2020 paper by the World Trade Organization, “COVID-19 and agriculture: A story of resilience”, noted the direct impact of lockdowns: “Measures to curb the virus included policies that both facilitated and restricted agriculture trade. Agricultural trade flows changed significantly, due notably to a sudden change in consumption patterns triggered by the measures put in place.”

Connecting through e-commerce

During September 2020, when the whole world was still in the midst of containing the pandemic, South African businessman Louis De Kock established Nile.ag, a business-to-business e-commerce platform that connects farmers directly to commercial buyers of fresh produce.

De Kock grew up on a farm in the Northern Cape and worked for Amazon Fresh in the United States, with the responsibility of growing the Amazon grocery platform. His farming background stood him in good stead during this period, he says. “We were very fortunate that during COVID, people became more sensitised to the idea of trading online. As a result, the business grew much faster than we could have ever anticipated. We have grown every single month since the launch and the momentum has continued post the pandemic.”

Nile.ag now facilitates sales of more than 20 000 tonnes of fresh produce every month, a number that continues to grow daily.

Nohari highlights some critical factors that remain major concerns for farmers with regard to the migration to e-commerce and online technology. He argues that while e-commerce and online social media apps might benefit large-scale commercial farmers, smaller producers might find it difficult to mitigate the cost of doing deliveries if they were to rely on these platforms. “Imagine delivering 1kg of green beans to somebody who’s 10km or even 4km away. What is the price going to be for that 1kg? What will the fuel cost be?”

De Kock points out that Nile has developed an extensive network of more than 30 freight owners across southern Africa to enable farmers to connect, regardless of their location or logistical means. “If we know that there are smallholder farmers, we allow them to piggyback on larger ones. We are aware that small-scale farmers don’t always have logistical means to transport their produce in an economically viable manner.”

Fair trade

Another benefit of doing business online is that since there are no people or agents involved in the trading process, the inherent biases of person-to-person trading are reduced. De Kock says that, for example, a small producer farmer might have good quality produce but because they are small or from a certain background, they could be given a reduced price if the bias is not removed. “On the Nile platform, the transactions are more objective because the quality and pricing are apparent to all who are involved, and there are no intermediaries. The buyer doesn’t need an agent to make a determination, regardless of whether it’s from a small- or large-scale farmer. The unbiased nature of an online platform can create a safe space for smaller farmers to transact in a fairer manner.”