AirAsia has launched itself into the agribusiness supply chain – reducing costs to buyers, increasing profits to farmers and supporting food security.
In a partnership with Malaysia’s Agriculture and Food Industries ministry, the airline has launched a new e-commerce platform called OURFARM. Delivering the platform includes free training to farmers, to help them digitise their businesses.
It’s an innovative move at a time when 96 per cent of AirAsia’s fleet is grounded as a result of Covid-19 lockdowns. The platform addresses the long-standing need to deliver higher profit margins to farmers, breeders, fishery workers – those at the frontline of the food system who currently earn no more than a fifth of their produce’s retail value.
Simplifying the supply chain should reduce the cost of fresh produce by 25%. The partnership will support 1,000 government contract farmers as well as private farms in the Klang Valley.
OURFARM co-founders Radzi Tajuddin and Nadhir Ashafiq explained that for the last 60 years, farmers, breeders and fishermen have earned too little from the food supply chain ecosystem. Reearch by the Malaysian Anti Competition Commission found these food producers earn approximately RM1.50-RM2.00 for every RM10.00 of product sold. (35 to 47 cents for every US$2.33).
OURFARM’s efficient supply chain management system supports the nation’s food security
They said the platform’s success was based on technology, big data and logistics, including a network of 7,000 lorries and pickup trucks that can be mobilised in 60 minutes to perform pickup and delivery, ensuring freshness.
OURFARM includes credit terms to support business buyers and the ability to prevent wastage as buyers can scale their purchase volume according to their actual needs through the website.
AirAsia Group’s Executive Chairman Datuk Kamarudin Meranun said, “This platform will help many small businesses by reducing the cost of fresh produce procurement by up to 25%.
“OURFARM will help increase the profit margins of agriculture producers by eliminating middlemen costs.
“This platform provides a more efficient supply chain management system which supports the food security agenda of the nation.
“With Asean being identified as the most productive agriculture basket in the world, we also plan to expand this platform to support other parts of the region in the long-term.”
Minister of Agriculture and Food Industries, YB Datuk Seri Dr. Ronald Kiandee, commented, “This strategic partnership will create a new ecosystem that can help agribusiness expand and have a wider reach, while giving end-consumers better value for their money.”
OURFARM’s last-mile solution will be powered by Teleport, the logistics arm of AirAsia Group as well as TheLorry.com.