Agriculture sector is important for Indonesian people since it is contributing 14 percent of the total GDP. But still a lot of farmers are living poorly because of the lack of knowledge and intervention from the middleman who tricked the farmers so that they got paid way lower than the market price. 8villages, established in 2012, up until now is trying and developing their business model in order to help the farmers without gaining any direct profit from them. The innovation of their services are in the form of providing a community platform for interacting and sharing knowledge, providing direct "farmers to markets" platform, data collection for research and government needs, and providing funding access and payment services for farmers in Indonesia.
Mochammad Haryo Pramantyo
IPMI International Business School
Amelia Naim Indrajaya
As one of the important sector for Indonesia's economic growth, the agriculture sector is contributing 14 percent of the gross domestic products. Having said that, there are still a lot of farmers in Indonesia who live below the poverty line. This happened because of the lack of knowledge and also the intervention of middlemen that gain more profit than the farmer itself. In order to solve these problems, 8villages was established by Sanny Gaddafi.
For the first step in 2012, 8villages provides a platform for farmers and agricultural experts to interact with each other in order to solve as soon as possible whatever problems that farmers face in order to increase their harvest. This platform runs via SMS services since at that time the infrastructure for communication in rural areas are still underdeveloped. Having good responses about the usefulness of the platform, 8villages continues its endeavor for providing agricultural solution for farmers.
“Back when we established 8villages up until now, we have a firm vision that we would never take profit from farmers, building the business on top of the platform is what we must focus on.”
So how can 8villages gain profit and build a sustainable business? The answer comes to the stubbornness of Sanny to seek other chances to improve the business model of 8villages. It started with the idea that as a community platform, 8villages can gain profit through the increasing numbers of the user and then get paid by the advertiser in their platform. But this was costly and needed longer time to generate revenue. Then he improved it by providing business to business solutions for the underserved community and build a social network model for them. Moving forward to 2018, right now 8villages as a technology company already has six divisions that are running several businesses from community platform providers, data collection services, e-commerce, logistic, funding, and payment businesses, all in all subsidizing each other and is managed to not only be surviving but also become a successful business. But still they did not falter away from their core vision and company focus on providing solutions for farmers in order to improve their lives.
Having been raised in agricultural areas where a lot of his childhood friends are farmers, Sanny was lucky to have family that put high attention on his education. Because of it, he managed to graduate with a bachelor degree and build his own social network called Friends Uniting Program Especially Indonesian (FUPEI) back in 2004 and several other social media platforms which gained enough traction and revenue. Because of his experience on building social media, one day he was introduced to a French agronomist Mathieu Le Bras who was interested in improving an Indonesian farmer's life. Sanny wasn’t sure at that time, since he was in doubt about how a business like this would be beneficial for him without exploiting the farmers? Hence he agreed to work together with Mathieu as his CTO and launched LISA (Layanan Informasi Desa= rural information service) in 2012. LISA is like social networks that connect farmers, education practitioners, and professional from Ministry of Agriculture to interact and solve agriculture problems, such as how to make crops to produce more, through SMS services whenever farmers need it.
“At that time it feels like it is the right things to do, because when I look back at my childhoods' friends condition growing up as a farmer, a lot of them already deceased because of using drugs and inadequate income. Proper knowledge is the foundation of welfare”
Now the LISA has evolved into applications that run in smartphones called PETANI and have connected 100,000 farmers all around Indonesia. Those farmers are interacting, sharing knowledge and learning new things on a daily basis with the help from each other and also agricultural experts from university and Ministry of Agriculture. Before 8Villages existed, those farmers were underserved and had no idea how to gain proper knowledge and how to connect with each other. With that knowledge they have been given the opportunity to learn new things and take their business to the next level in the long run.
For the shorter time frame, 8villages through one of its new platforms called RegoPantes managed to connect 700 farmers as direct suppliers to over 100 customers with the fair price. The fair price means that it is the average price from the market price and production price, hence the farmer received much more than they usually get via middleman. With this method of calculating price, farmers manage to double their income and not a single cent of that profit is taken for 8villages.
To summarize the benefit for the business itself, 8villages now have managed to gain profit and reputation as one of the successful social enterprises in Indonesia. Because of their relentless focus on developing farmers, a lot of opportunity comes in especially from State Owned Company and Government institutions that believed 8villages is the right company to approach whenever they want to improve the wellness of the society in a sustainable way.
Knowledgeable farmers and the middleman role in Indonesia by far are the challenges to tackle when it comes down to improving farmers' lives. 8villages by far is the only one that really focuses on the farmers rather than use them as tools to gain profit. By doing this, they manage to double the income of the farmers and improve their quality of life.
“One of the event that I always remember, is back then when 8villages held a ceremony in one of the villages using our platform. At that time it was raining hard, and as a boy who grew up in a city I didn’t want to get wet so I did not put the flag of the sponsors. Suddenly the farmers without anybody asking were going into the field and put all the flags up. When I thanked them, one of the farmer said that it is me who he really needed to thank, because of LISA his dates palm which had not produced any fruits for two years suddenly managed to produce lots of fruits.”
Sanny Gaddafi, Mr.
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Bekasi, West Java, ID
Business Website: http://8villages.com/
Year Founded: 2012
Number of Employees: 11 to 50