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Addressing problems in supply chain
EVERY year, newspaper headlines blare out the same old story. Farmers are not getting a fair price for their produce. We, the consumers in cities get a raw deal, since we end up buying produce grown by the agricultural sector at several times the price paid out to farmers. Everyone knows what the problem is - too many middlemen. Yet, one would have thought that
with the advances in technology and all the hype around 'Digital Bangladesh', someone, somewhere at policy level would have come up with some idea about putting into place tried-and-tested formulas that are big on delivery, yet small on cost. Yes, we are talking about innovative solutions that are essentially technology-driven.
Most people in our country regardless of the rich-poor divide have access to technology. The mobile phone revolution and the arrival of the internet on the phone mean that access to information to millions is a reality. As stated by a young entrepreneur "while agriculture has been the most thriving sector in Bangladesh, recent globalisation trends have led to a shift in demand in how we approach firming in emerging markets as such. An 'information spill over' means producers no longer want to rely on middle men to cut their deal; they want to secure the best bargains on their own and lose nothing in between." Indeed solu-
tions using mobile phones whereby a "virtual marketplace" is created bridging producers and consumers already exist in the country. And it is not only about creating a market where there are no middlemen. It has to do with interventions that can cut out the "system loss", e.g. 10 kilos of mangoes shipped from another district destined for say, Dhaka, reaches the retailer or consumer for that matter where there are only 8 kilos of mangoes. We are talking about pilferage along the route. We are talking about innovations in "monitoring of the supply chain through GPS tracking and counting applications."
The list of inadequacies in the supply chain is too long to address in a single article. Yet certain basic conclusions can be done from studies done in neighbouring India. According to a study conducted by the Massachusetts Institute of Technology (MIT) in 2012, "To help address price volatility and middlemen collusion during a harvest time a similar, mobile based, tool would feed farmers daily price information for several of the closest markets. Farmers would then be able to decide where and when to sell their crops. The service could also incorporate an educational component to help farmers gain higher yields from their crops. A similar service, called e-coupal, has already been rolled out by Indian conglomerate ITC which has several thousand kiosks outfitted with internet-enabled computers which display daily price information and educational
materials. A text-based mobile service with forecasting mechanisms, however, would allow a service to scale much faster and help reduce price volatility."
A few things become apparent from the above statement. That mobile technology has provided many farmers in India with access to real-time information about daily prices of their produce to make informed decisions. Secondly, the involvement of large private sector players in the information technology arena is helping to come up with required investment in both software and hardware to get the message across. Innovative tech-companies across the globe are coming up with solutions that work in the field. For instance, BumperCrop is a gateway for some 4crore home food growers who want to buy, trade, and sell their produce in their community.
The business volume annually for home growers hover around US$18billion - now that's big business. Looking at the Asian scene, we come across companies like Agrisaurus, which helps user "design and maintain a perfectly executed edible garden. Their gardent management tools include garden-map AI assistance, HTML5 canvases, cloud databasing, Gantt chart timelines, automated reminders, real-time weather data, and pests and disease diagnosis."
Why can't such approaches be adopted in Bangladesh? We have a vibrant telecom sector and an emerging IT sector. In Bangladesh, where more and more young people are turning to selfemployment and where 5 out of 10 new companies being formed are IT-based, it is natural for many of them to be developing applications to be used on mobile
phones. Recent data shows a boom in low-cost segment of mobile phones, with more and more users moving to the smart phone category, especially since the conclusion of the 3-G licensing procedure. With the various Telecom companies in various stages of implementing a nationwide coverage of the 3-G services, where it is envisaged that the bulk of revenue will come from data, rather than voice-enabled services, the market is poised to take off. The bottom line is that the loopholes in agriculture and its supply chain create massive opportunities - opportunities that can be explored by a largely underutilised IT and private sector.
What is there to stop government from introducing required legislature and access to finance through, if necessary, nationalised commercial banks to enable both established and new start-up technology companies to explore uncharted markets. What is required are policy level guidelines to create access to low cost finance for new tech-based companies into the market. Equally important is to engage the private sector that will work in close cooperation with government ministries, particularly agriculture, to bridge the gap that exists today between farmers and consumers - so that both groups may benefit in the long run.
The writer is Assistant Editor, The Daily Star.