TEMPO.CO, Jakarta,-
Farmville in Practice
iGrow is introducing startups to farmers, winning the company first prize in the 2014 Startup Arena competition. The company has established a farming school for fresh university graduates.
Like the online game Farmville, iGrow entices potential investors and their farmer partners. On the Facebook game, players are a given real-time agriculture simulation, from purchasing land, seed and fertilizer, cultivating plants and enjoying harvests.
Meanwhile, iGrow makes it possible for investors to enjoy fruits and vegetables directly from the farmer’s land: durian, rose apples, olives, sweet potatoes, dates, longan and peanuts. Farmers can even update their farming process on iGrow’s online platform. "I can show investors how my peanuts are growing," said Nanik Chomsah.
Nanik is a peanut grower in the Sumberklampok village in Bali, who joined iGrow in late 2014 when the fledgling startup was only one year old. The 55-year-old woman had no idea that online farming was a thing, and became interested in the platform after she stumbled upon iGrow’s website by accident while browsing the Internet.
She called iGrow’s office and expressed her interest to partner with the online platform. The startup responded favorably. One month later, iGrow’s representatives came to Sumberklapok, in the Buleleng Regency, to survey Nanik’s farm with a total area of 12 hectares. In 2015, she was accepted. "iGrow staff came several times in six months to make sure my farm was well managed."
Nanik is among the 2,200 farmers who have joined iGrow as partners. These farmers are spread out in Bali and in some cities in Java, such as Pandeglang (Banten), Jonggol (West Java), and Blitar (East Java). As of September, iGrow’s partner farmers have cultivated a total land area of 1,197, as registered with the Financial Services Authority.
Jim Oklahoma, chief business development officer at iGrow and one of its founders, explained that the platform they are developing requires three roles, namely operators, sponsors and independent surveyors. The operator is the person responsible for managing the farming system in the field.
Independent surveyors are iGrow’s staff who check field conditions and report to sponsors. An independent surveyor is also responsible for assisting farmers in an area of at least 200 hectares in one region. "While sponsors and investors fund the planting of the things they’re interested in," said Jim.
iGrow’s rules are not difficult, Jim said. Peanut farming sponsors in Buleleng, for example, only invest and monitor peanut cultivation through the company’s online platform. Once the peanuts are ready to harvest, sponsors get information on their share through the same platform. Because iGrow is a business with social aims, the company applies a strict selection of their sponsors.
The startup’s net revenue is obtained by averaging the profit from a certain plant on one farm and deducting running costs. The remaining amount is split between the operator (farmer and landowner), who gets a 40-percent share; the sponsor, who also gets 40 percent of the share; and the independent surveyor and iGrow’s administration, 20 percent of the share. Using this model, iGrow’s entire transactions observe a turnover of tens of billions of rupiah.
Nanik is pleased with iGrow’s unique business model, which won first prize in the 2014 Startup Arena competition. Furthermore, iGrow’s partnership model is different from, say, the banking model. To borrow from a bank, Nanik would have had to offer a collateral as the guarantee for good harvest, or yield that confirms the initial estimate. But it is not easy to fulfill these requirements. Farmers have to face obstacles that may cause them financial losses during harvest time.
With iGrow, said Nanik, farmers need not worry about capital as it is taken care of by sponsors. Farmers even get assistance from iGrow’s staff, on things such as farming techniques and all sorts of problem-solving. "We learn a lot, from technology to the new agricultural business model," she said. Nanik has invited 200 farmers in Buleleng to join iGrow as partners.
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