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EdenFarm: Helping Indonesia’s farmers earn a weekly income

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According to Statista, Indonesia is among the world’s largest producers and exporters of agricultural products. Its food supply space has emerged as the largest sector of employment in recent decades. However, on the ground, there are still many challenges faced by local farmers. Due to a lack of education and expertise, many farmers struggle with business growth and scalability. 

In a recent episode of Indonesia Digital Deconstructed, Indonesia’s top B2B food supply chain startup EdenFarm came into focus. The company’s founder David Gunawan told AC Ventures’ founder and managing partner Adrian Li that most local farmers don’t even consider farming a business. Rather, they look at it as a means of sustenance. It’s the only thing they can do and it’s how they get by, day-to-day.

So, how can Indonesian farmers be taught to increase income and grow their business? The answer is simple: someone has to take charge, and that’s exactly what EdenFarm is doing.

Creating a regular income cycle for farmers

David, who was himself a farmer before he started the company, believes that in Indonesia, helping local farmers cannot be achieved by simply imparting the know-how. 

“It must be done by taking control – by having farmers agree to follow EdenFarm’s precise instructions in return for us solving their main issue of consistent demand,” he explained with conviction.

Indonesian farmers, in general, are living in poverty. According to a June 2020 report based on nationwide data compiled by Statistics Indonesia (BPS), local farmers earned US$3.81 on average, per day. 

There is an urgent need to help create a regular income cycle for the nation’s farmers and EdenFarm is striving to do it by arming them with operational roadmaps and more buyers.

“We believe that if the nation’s farmers are well-connected and have a constant demand for their products, we can build an efficient food supply chain that not only ensures regular income for farmers but also enables equal access to food for all,” said David.

Bringing balance to a fragmented market

Indonesia has long been known as an agrarian country, but there are many challenges that haven’t yet been addressed. One of them is fragmentation. David believes that fragmentation in the B2B food supply chain creates a great deal of pain on the farmer’s side, especially when there can be as many as four middlemen between a farmer and an end-buyer. 

“Most of these farmers have small pieces of land and not everyone in the middle of the supply chain is organized. This leads to a lack of stability with the pricing plus the supply chain becomes highly inconsistent. I remember, back in the day, there was a time when there was a scarcity of chili and shallots,” he shared.

He added, “There is a massive imbalance in supply and demand. This not only messes up the income cycle for farmers but also leads to a lot of food wastage.”

When asked why EdenFarm has never run a B2C play, David explained that the B2B food supply chain is quite simply the space with more opportunity to create impact. By focusing on the nation’s underserved farmers, EdenFarm can help bolster their livelihoods, and help them provide better futures for their families. B2B is also less crowded with competitors, simply due to its high barrier to entry. 

He said, “B2B is less shiny and it takes a lot of digging to build an understanding of the economics. It is vital to understand what variables trigger what results. For example, if you understand the soil conditions of Indonesia, you can turn what is normally a seasonal harvest into a weekly harvest. This not only increases the farmer’s income but also fixes the inconsistency in supply and demand.”

How Indonesia’s EdenFarm runs at near 0% food waste

See also: The voluntary carbon market is a lynchpin for tech in Indonesia

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AC Ventures is a leading venture capital firm investing in early-stage startups focused on Southeast Asia. We are a generational partner to founders driving positive societal change and economic impact in Indonesia and beyond.

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