Indonesia’s growing agritech scene, having attracted millions of dollars in investment, has impacted the industry in no small way. Indonesian startups have brought fair-trade into the sector, raising farmers’ bargaining power with their efforts towards financial inclusion and greater access to funds, thus supporting higher-quality output. Some have even adopted advanced IoT technology. Amidst the increase of agritech startups in Southeast Asia, key players in Indonesia continue to advance and look set to flourish.
Key players in Indonesian agritech
Some of the most prominent agritech startups in Indonesia include:
eFishery
All about aquaculture, eFishery’s innovative fish-feeding strategy consists of a smart feeder that uses motion sensors to detect a fish’s appetite. If the fishes seem hungry or unsettled, the feeder automatically dispenses food. Farmers can also check in on their fishes through the accompanying platform, and schedule feeding times or regulate the system in real-time if necessary. The overall effect—better risk management and increased production efficiency.
Jala
This startup aims to help shrimp farmers improve their water quality through water monitoring and treatment systems. Its IoT device collects data instantaneously, running it through algorithms that generate actionable conclusions. The data is even available offline should there be no Internet connection.
Kedai Sayur
Having raised $5.3 million USD to date from organisations like East Ventures, Kedai Sayur connects vegetable hawkers directly to farmers. This cuts out intermediary costs and allows hawkers to potentially receive comparatively fresher vegetables instead of the leftovers at the end of the distribution chain.
iGrow
iGrow, described as the “Farmville for real life”, offers the opportunity for anyone to partially “own” farms by buying seeds to invest in a crop. The local farmers take care of the agricultural operations, and both parties split the profits upon sale the harvest. Supported by Google Launchpad, it aims to harness the benefits of organic farming by building a farm dedicated to it.
TaniHub
TaniHub specialising in agricultural commodity trading, is backed by $10 million USD from firms like Golden Gate Ventures. Its in-house delivery department also takes care of the logistics. This has opened up opportunities for over 30,000 farmers and has helped smaller farmers reach out to over 400 SMEs and 10,000 consumers.
Challenges for agritech in Indonesia
Despite the progress of its pioneers, Indonesia’s agritech sector still faces challenges. One of the main problems would be the lack of digital literacy “issues”. The agricultural industry has long used traditional ways, and farmers are unaccustomed to newer technology. This limits its widespread adoption, and education is needed to open up these possibilities for farmers.
Financial inclusion in the agricultural sector, while being initiated, is still far from enough. Due to the high perceived risk, most formal financial institutions are reluctant to finance farmers, especially the smaller ones with no real property assets. Without sufficient liquidity, farmers might not be able to afford agritech technology, or even the time needed to understand the technology as they concentrate on trying to keep their businesses afloat.
Together, these hurdles can limit the impact agritech startups have on the sector. Ivan Arie Sustiawan, CEO and Co-Founder of TaniGroup, suggests that agriculture startups work together to progress this huge and largely traditional scene. Through these partnerships, he believes that startups can offer more value.
Opportunities for Indonesia’s agritech startups
Thankfully, this emerging sector also presents massive opportunities for the bold. As a significant contributor to Indonesia’s gross domestic product, and employing more than 35 million farmers, the agriculture industry is a crucial part of the country’s economy. Furthermore, there is plenty of arable land useful for farming to help feed the nation’s 250 million people. However, as they are under-utilised or left idle, the country is turning to imports to meet the growing food demand.
Indonesia’s government, grasping how vital agriculture is to the nation, is working to raise the living standards of its farmers. Its central bank, Bank Indonesia, initiated the Kredit Usaha Rakyat programme (“Business Credit for People”), a guarantee scheme to support microfinance institutions lending to micro, small and medium enterprises. There have also been discussions with TaniGroup, TaniHub’s parent group, and other relevant parties to create a more extensive platform to tackle matters in the agriculture sector.
Millennials’ tech tendencies—their speed in understanding technology and attachment to their phones—create enormous resources for companies to access. Sariyo, TaniHub’s head of business development, views the youth as the most natural age group to engage, as they tend to be more inquisitive, and value efficiency and quick wins. TaniHub built its outreach strategy around giving valuable incentives to youths to facilitate word-of-mouth marketing. They are empowering a select few top younger farmers who share their experiences with other farmer friends, of similar or older ages, explaining the benefits of the new technology.
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With an abundance of opportunities, backed by enthusiasm from all parties—tech entrepreneurs, investors, farmers, and the government—Indonesia startups in agritech are well-supported for growth. Together with fellow agritech startups in Southeast Asia, Indonesia’s players look set to revolutionise one of the oldest industries for the better.