Dotcom bridges digital divide in agriculture
by Melba-Jean M. Valdez, Associate Editor;
Computerworld Philippines


February 19, 2003

Taken from http://www.itnetcentral.com/article.asp?id=10945&icontent=13682

If there is one good example where the digital divide is successfully being bridged in the country, it would be the agriculture sector where farmers have been trading their produce in an electronic marketplace via the Internet and their mobile phones.

“When you look at the digital divide, the biggest gap is in agriculture where there is a low literacy rate and where state-of-the-art technologies such as the Internet and the mobile phone are obscure tools,” said Edgardo B. Herbosa, managing director of B2Bpricenow.com, an e-marketplace developed for farmers.

With B2Bpricenow.com, farmers or producers can upload information regarding their products while buyers can post their requirements online through the Internet or the mobile phone. With this setup, Herbosa said, farmers are able to monitor the prices of goods, such as rice or cattle, in the market without having to travel to the nearest trading center.

“When a farmer goes online, he’ll immediately know if there are buyers for the goods he has posted online, otherwise, if he isn’t part of an e-marketplace, he’ll spend days waiting if he has a buyer or not, often ending up with wasted products,” he said in an interview with Computerworld Philippines last week.

Currently, payments for the online trading in the e-marketplace can be made through fund transfers facilitated by partner banks like Land Bank of the Philippines. Herbosa disclosed that e-payment via the Internet will be made possible sometime in the second quarter of the year. With the e-payment gateway, sellers will be charged a transaction fee equivalent to a quarter of 1% of the sales made.

According to Herbosa, about P2.7 billion worth of agriculture products and services are traded annually by 1,500 farmer cooperatives at B2Bpricenow.com. This, however, is just a fraction of the gross value of agricultural production last year which was estimated at P617.9 billion.

Currently, there are 3,700 farmer cooperatives registered with the Landbank.

In 2002, the agriculture industry turned in a positive growth of 3.69%. This year, the sector is expected to grow by 3% to 4%.

GOV’T SUPPORT

Having realized that information technology can be a tool to empower the farming and fishing communities to produce sufficient, accessible and affordable food for every Filipino, the Congressional Oversight Committee on Agriculture and Fisheries Modernization (COCAFM) last month endorsed B2Bpricenow.com as one of the e-marketplaces of the Philippines for the agriculture and fisheries sectors.

“With the endorsement, B2Bpricenow.com is eligible to avail funding support from the government through loans or grants,” said Herbosa. “Actually, grants and support from various public and private institutions are the reason why we are thriving as a dotcom.”

In fact, the success of B2Bpricenow.com in the country has caught the attention of Thailand, Myanmar, and China where the e-marketplace will be replicated.

BEGINNINGS

B2Bpricenow.com is actually a brainchild of Herbosa, who thought of establishing an e-marketplace for farmers in June 2000.

Unlike other dotcom founders who depended on their own people’s technical skills and thrived on money infused by venture capitalists, Herbosa neither spent a single centavo of his own money in building the portal nor got funding from any VC.

“A lot of the dotcoms that failed were run by technical people who did not have management skills,” he said. “In my opinion, technology is just a tool, it doesn’t drive the business.”

The first step Herbosa took in putting up B2Bpricenow.com was to present his proposal to Unisys Philippines three years ago, which at that time was looking for projects to help the government alleviate poverty through information technology. Herbosa and his partners were able to convince Unisys to take care of the Web design, programing and hosting of the site. In exchange, Unisys got to own 5% of B2Bpricenow.com.

Then, for content, Herbosa began negotiations with Gerry Geronimo, the producer of a popular agricultural TV and radio show called “Ating Alamin.” To further strengthen B2B-pricenow.com’s reach to farmers, Herbosa partnered with the Land Bank of the Philippines. “Landbank has the mandate to strengthen farmer cooperatives, so they have the money to train the farmers,” he said. With funding support from the bank and a training deal he negotiated with the Polytechnic University of the Philippines, Herbosa has been able to educate farmers on how to use the Internet and take advantage of B2Bpricenow.com.

B2Bpricenow.com’s other partners include the Department of Agriculture (DA),    Department of Trade and Industry (DTI), Philippine Rural Reconstruction Movement (PRRM), and the Department of Science and Technology (DOST).

“Membership and access to information on the Web site is free because I’ve been able to do away with the development and training costs which were shouldered by Unisys and several government agencies,” Herbosa explained.

The next phase was enabling farmers, cooperatives and small entrepreneurs to do online trading via their cell phones. “I wanted to provide an alternative way for farmers to access the Web site and do online trading because not all of them will be able to access the Internet everyday,” said Herbosa.

WORLD BANK

The biggest break came when B2Bpricenow.com won a grant worth US$118,000 in a World Bank-sponsored contest.

The “E-Commerce for Farmers” initiative of B2Bpricenow.com was chosen as one of the 30 winning entries from 2,400 proposals that were submitted to the World Bank’s Development Marketplace 2001 competition held in Washington, D.C.

“The grant opened doors for us to get more grants,” said Herbosa who used the endowment to buy computers and phones for 14 cooperatives under the PRRM.

Herbosa’s next project is to set up B2B Business Centers in partnership with farmer cooperatives in 1,500 municipalities nationwide. These business centers will act as Internet cafes and financial service providers which will allow cooperatives to make money by selling phones, prepaid cards, or charging for Internet access,” he said.

REVENUE STREAMS

B2Bpricenow.com generates revenues in three ways — through online advertisements, SMS (short messaging service) transaction fees, and Web development services for cooperatives or small and medium enterprises that want to have their own Web sites.          B2Bpricenow.com gets 20% of the fee for every SMS inquiry or transaction, which costs about P2 or P2.50 per text message. It earns P2,800 a year for each Web site it develops and hosts.

Once the e-payment gateway is up and running, B2Bpricenow.com will also get a share in the partner banks’ settlement fees for online payments.

Currently, the bulk of the company’s revenues is generated through online advertisements. As the market matures, and as its user-base increases, Herbosa expects fees from transactions to account for the lion’s share of revenues.