The Rise of the Farmers Market App

Before COVID-19, the agricultural supply chain seemed firmly established. Farmers grew food for the growing population. Farmers supplied that food to restaurants, supermarkets, hotels, and other distributors. Consumers ate the food. And they all lived happily ever after.

Until they didn’t.

In the face of a rapidly spreading global pandemic, restaurants and hotels were forced to restrict their services or even shut their doors. Supermarket shelves, meanwhile, were stripped bare by early panicked buyers. As days turned into weeks and weeks turned into months, more and more consumers opted to stay at home and buy as much as possible online.

This had a devastating effect on farmers’ ability to reach their end-consumers—and, like nearly everyone else in the world, their only solution was to go online. The result was a massive spike in the use of farm-to-consumer apps, which existed prior to the pandemic but have become more popular than ever in this modern, post-COVID-19 world.
 

How they work

From virtual farmers’ markets to mobile-based community-supported agriculture (CSA) platforms, countless apps offer consumers the opportunity to buy directly from local farms. In Seattle, Barn2Door connects growers and buyers from across the United States, providing them with easy access to a veritable smorgasbord of fresh-from-the-farm produce.

In Japan, Secai Marche provides a similar service for “enthusiastic chefs and passionate farmers”, with plans to expand to other countries in Southeast Asia. And one of the most successful examples of farm-to-consumer mastery is TaniHub, an Indonesian agritech start-up that recorded unprecedented business growth of 639 percent in 2020.

“The pandemic has triggered a shift in consumer behavior, as more and more people shop online due to social distancing and lockdowns in various regions in the country,” says TaniHub Group COO Vincentius Sariyo. “Last year, we saw 200,000 new users of our app, and our daily transactions increased by more than twofold during emergency lockdown.”

Now connecting more than 46,000 farmers with 350,000 customers (consumers, restaurants, hotels and supermarkets), TaniHub was founded in 2016 by six young social entrepreneurs on a mission to improve the livelihoods of smallholder farmers.

How? By going directly to the customer.

“Smallholder farmers always benefit the least from the sales price of their goods, due to multiple layers in the supply chain,” says Sariyo. “Indonesia’s agriculture sector is highly fragmented and inefficient, with many middlemen. These problems have caused a huge price gap between farmers and consumers, keeping farmers at the bottom of the pyramid.”

More than 30 percent of Indonesia’s workers are in the agriculture sector—and Indonesian farmers are often categorized as economically underprivileged, despite their well-earned reputation as savvy businesspeople. With this in mind, the TaniHub Group also offers financing for farmers, as well as long-term welfare solutions. “Obviously, we wouldn’t be able to solve all the problems alone; we need to collaborate with various stakeholders in the agriculture sector, including the government, academics, NGOs and fellow industry players,” says Sariyo.
 

Assessing the impact

Farm-to-consumer apps are clearly set to disrupt the agricultural landscape, harnessing the power of digital technology to help farmers improve both their productivity and their ultimate income. And, so far, it seems to be working.

“Farmers in my region, Pangalengan, have been heavily impacted [by COVID-19], but fortunately, we – who supply to TaniHub—are certain that our products will be bought,” said farmer Dani Ramdani in an IFC interview. “Farmers who rely solely on traditional markets are facing much more difficulties [during the pandemic].”

Like restaurants and hotels, traditional markets have taken a massive hit due to COVID-19. With five out of every six farms worldwide covering less than two hectares and classified as smallholder farms, many global growers rely heavily on physical community markets—and many of these are now standing empty.

Fortunately, farm-to-consumer apps are filling the gap with an effective online equivalent. From the comfort—and safety—of their own homes, consumers can browse through a bustling virtual marketplace of fresh, local produce, selecting what they need and often receiving their orders the very next day.

It’s not just a commercial opportunity. It’s a livelihood-saving innovation for millions of farmers in countries around the world. According to the Food and Agriculture Organization of the United Nations, smallholder farmers produce more than a third of the world’s food and account for five out of every six farms. And while these small-scale producers are clearly reaping the benefits of farm-to-table technology, it could also one day play an even bigger role in the greater agricultural space, especially given farmers’ eagerness to adopt new technologies that improve their businesses.

“Right now, digitization is inevitable,” says Sariyo. “Even large-scale farmers may need to reach bigger markets, which can be accessed efficiently through the help of digital technology. Having said that, we are still currently focusing on smallholder farmers, as they are the ones with the least access to market, funding and so on. We prioritize the small ones, because they need to scale up their businesses in order to become larger-scale farmers themselves.”

Be they large- or small-scale, one thing is certain for the world’s pioneering population of farmers: technology plays – and will continue to play – an increasingly important role in their agricultural endeavors. From crop modelling software and apps that help identify pests to an ever-expanding array of agritech apps, digital innovation is set to shape and even irrevocably shift the ways in which farmers plant, grow, harvest and sell their wares in the years to come.