Social network for farmers - ITEN company develops application "Virtual Cooperative" for farmer's joint performance

Agricultural cooperatives in Serbia have been degrading since the end of 90`s. Numerous big cooperatives have been closed, while those that have survived do not operate in full capacity. According to 2012 cesus of agriculture, there are around 3.4 million hectares of used agricultural land and around 630 thousand agricultural economies. An average Serbian agricultural economy owns not much arable land - from 1 to 5 ha, which leads to the fact that farmers are small players in the big market.

"Virtual Cooperative" application, made in ITEN company in Novi Sad, is a solution that provides uniting of small agricultural producers and their joint performance in the market. The application is designed as a sort of social network for farmers, claims Marko Nikolic from ITEN company in his interview to "eKapija".

- Farmers can create their profile where they present their economy and their products. Each farmer is enabled to "invite" other farmers to unit around the same goal, for example, raw material supplies or product launching. To invite others to unit, a farmer needs to use a bulletin board, available to all social network users. They can choose filters through which they get ads on topics they are interested in - explains our interlocutor.

As Nikolic states, the idea was created in February this year in accordance with The Strategy of agricultural statistics development in the Republic of Serbia, the document of the Ministry of Trade, Ministry of Agriculture, Forestry and Water Management in 2011, where the ICT sector gets high significance in agriculture.

Virtual bulletin board

Our interlocutor explains that, for example, an economy that plans to purchase a certain quantity of seeds can post an ad for uniting on the bulletin board and search for other economies which buy the same seed. After the ad is completed, several new economies interested in the same type of purchase appear, and the total quantity of seed is multiplied. When a new ad is posted, it is oriented towards suppliers, for the seed purchase. Through this process suppliers make their offers and they are expected to lower the price for a large quantity of seed. If there are several suppliers, they will try to be more competitive with the price and purchase conditions (transport etc...).

An economy that has its own products to present can post an ad, as well.

- There is a possibility of retail sales, sales to dealers or even export abroad. The most favourable option is the export of goods, but it requires certain quantity that a single economy can not deliver. A farmer posts an ad for uniting with other producers of the same product (who can be from any geographic area covered by virtual cooperative) and when they reach a desirable quantity, they post an advert where they search for a company to export their products. Although they already have a large quantityof goods, they skip single dealers and, thus, can obtain a better price.

Adverts for uniting, in order to offer larger quantities of product to big retail chains, can also be posted and they could bring a specific acknowledgement to the product quality.

- Dealers buy products at the same price and they do not care about the variation of the product quality. For example, they will buy organic and ordinary grown potato at the same price, because they sell it as "potato". On the other hand, producers of organic potato can unit and perform together, with better price that keeps the quality of their product.

- These adverts for uniting form a certain brand. For example, producers of Mokrin chese do not have an interest for a large production, due to hard access to buyers. By uniting, they can offer larger quantities that will reach big retail chains or they can organize transport to single buyers in the towns (transport costs will decrease when a larger quantity of products is sold) - says Nikolic.

(Photo: Shutterstock)

Users of this application are farmers, suppliers and individual consumers of products. Initially, the use is free for farmers and enables creation of a profile of an agricultural economy and posting an advert for uniting, supply and sale. Advanced usage of the application requires subscription and it provides detailed description of the economy and products. Adverts of advanced users are priority on the bulletin boards.

- Farmers obtain material in larger quantities at lower price, launch their products at higher prices, skip mediators in the process of sale, directly contact with customers, quality of product is kept and reflected on the price and it offers possibility of creating a brand - states interlocutor of our portal.

Suppliers, companies that sell material necessary for agricultural production (seeds, products for protection, machinery, insurance...) or work as wholesalers (retail chains, exporters...), pay for a subscription to use the virtual cooperative.

-There are a few options for subscription, for example, priority users are the first to get information on new adverts or their ad appears immediately after an advert on certain topic is entered. Suppliers have an opportunity to sell their products faster and in larger quantities, the access to users is not georaphically limited (e.g. a supplier from Novi Sad has the acess to clients from Leskovac) and the access to larger quantity of high-quility products or some local brand (e.g. retail chains can purchase large quantity of organic products or Mokrin cheese) - adds Nikolc.

Any user can be a member of virtual cooperative and can arrange retail sales with single farms, and also can choose farms to buy specific products and agree on the delivery.
A test run of the application at the end of 2015

ITEN company is one of 13 domestic companies in IKT sector which has provided assets for a realization of technological projects and development of the applications for agriculture through "Fractals" project, financed by Europian Commission within FP7 calls.

- We have applied for the assets of EUR 117,000 and the whole amount is approved. These assets cover a part of development team salaries, procurement of equipment, product promotion activities and attraction of the first users. The way of money share is specified by EU and the complete structure of all costs on the project had to be concretized before applying for it. Project is estimated to last 8 months, starting on 1 June this year.

ITEN company team sees this virtual cooperative as a product with an opportunity to develop, not only in the market of Serbia, but even broader, and they have big plans for the future.

- Our basic plans are to spread in the neighbouring countries, where the situation is similar to our country, and where the interest for this type of product exists. Thus, we are searching for partners to help us distribute our solution on the territory of nearby countries. Of course, our product is not limited on local markets only. There were contacts with a Dutch company interested in distribution on a wider territory. We are also eager for a cooperation with potential investors, because we do not only need investments, but experience in dissemination of the product and obtaining users, as well - states Nikolic.

According to him, an interest of farmers for this type of solution overcomes expectations of the creator of the application.

- The use of ICT technologies in agriculture is underestimated and an interest in these solutions is high. Currently, we are in touch with farmers who want to participate in the test run and to give us suggestions that will help us to adjust the application to their use. Everyone interested in the test run is welcome and we invite them to call us with their suggestions on email [email protected] - claims Nikolic, adding that the aim of virtual cooperative is not to supress classical cooperatives, but to fulfill their work.