March 31 2006, 00:00 Agrarian Marketing Project

Ukrainian farmers use Internet to sell their produce

About a year ago, Yaroslav Mayovets, a farmer from western Ukraine, faced a difficult marketing dilemma. He had a great carrot harvest, but so had many of the farmers in his region. The choices were either to sell it for a very low price in Lviv oblast, or to look for an alternative strategy.

He found out that there was a way to sell produce through the marketing information system developed by the Agricultural Marketing Program (AMP), a project supported by the United States Agency for International Development (USAID). Though skeptical, he called the Lviv regional office and offered his carrots for sale. To his suprise, in a few days he got a few phone calls, including one from Mohyliv-Podilsky cannery in Vinnytsya oblast. This processor urgently needed large quantities of carrots. After sampling Yaroslav's produce, the two sides signed a contract.

So while other farmers from the same region, who did not use the marketing information system were forced to throw away their carrots or used them as cattle feed, making nothing, Yaroslav sold his 65 tons at the price of 0.5 hrv per kilo, which gave him 32,500 hrv. in revenue.

According to an AMP survey, 85 percent of farmers who placed offers & bids received phone calls from interested buyers, and more than 50 percent of the farmers sold their produce. Farm produce sales via this system were estimated at more than $5.7 million, making a real contribution to many farmers and their families.

Volodymyr Zaitsev, the owner of "Chipolino" TM, Odesa, checks the AMP website three times per day

When the USAID-supported Agricultural Marketing Project came up with the idea for creating an agricultural marketing information web-site, many professionals were skeptical. They did not understand how useful it would be for small and medium-size farmers, many of whom have neither computers nor Internet access.

"Indeed, many farmers don’t have Internet access, but most processors and wholesalers do," said Andriy Yarmak, AMP senior market information specialist. "So by reaching the latter group, we still could effectively promote sales of farmers’ fruits and vegetables via the Internet."

The AMP mechanism is pretty simple. A farmer calls a regional project operator and places a bid by phone. The operator puts it on the website, indicating not only the size and price of the bid, but also the farmer’s contact information. Processors and wholesalers review the information online and get in touch with farmers. After the price and product quality issues are agreed upon, the contract is signed.

Creating a web-site and filling it with information doesn’t usually require a major effort. The real challenge is to attract target visitors. Thus, AMP had to provide a consistent flow of market information, including prices, market updates, market news, in addition to promoting the web-site within the target audience.

"We created a farmer database, organized by the type of the commodity offered; this not only eased the navigation for processors, but also provided great advertising support for producers," explains Yarmak.

In the first weeks after its launch, the website only had about 10 visitors per day.  In six months, it has become the number one food and agricultural information source in Ukraine, attracting from 350 to 400 companies per day. Today www.lol.org.ua is well-known to all fruit & vegetable agribusinesses in Ukraine. More than 1,000 companies utilize it frequently updated, exclusive information on a daily basis, generating about 35,000 visits and 170,000 hits per month.

The information published on the web-site is widely quoted and re-printed in specialized and national media outlets. Many market players use it as a benchmark, so the actual audience of AMP information system expanded beyond initially planned.