The Jordanian who’s boosting small farmers’ profits through technology

Late payments are a huge problem for small farmers, so Ghoorcom has reduced the payment period so that its farmers are paid on time. (Supplied photo)
Updated 17 May 2019
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The Jordanian who’s boosting small farmers’ profits through technology

  • By eliminating the middleman, Ghoorcom enables smallholders to sell directly to retailers, hotels and restaurants
  • For now the main destination markets are Amman and Irbid, with buyers segmented by size and location

This report is the first of a series being published by Arab News as a partner of the Middle East Exchange, which was launched by the Mohammed bin Rashid Al Maktoum Global Initiatives and the Bill and Melinda Gates Foundation to reflect the vision of the UAE prime minister and ruler of Dubai to explore the possibility of changing the status of the Arab region

DUBAI: Jordan’s agriculture sector could be transformed by a local business-to-business start-up. Ghoorcom, which launched its services in January 2018, promises to swell farmers’ income and improve the quality of produce in shops.

Its premise is ingeniously simple: With the help of technology, it eliminates the middleman and enables Jordan’s smallholders to sell directly to retailers, hotels and restaurants. That means higher prices for growers, lower prices for buyers and a more efficient distribution model; currently, goods transportation is often unreliable and can lead to spoiled produce.

“Small farmers face lots of difficulties,” explained founder and chief executive Mohammad Oqeili. “There are many struggles that need to be solved. We first enabled a few transactions between farmers and retailers offline, also taking care of logistics, payment and quality assurance. Now we’ve built a platform to do the same online.”

The company, which began testing its platform in June 2016, has ambitions to become a regional agricultural platform, said 28-year-old Oqeili, citing China’s Alibaba as his inspiration. Major source and destination markets will likely include Lebanon, Saudi Arabia and the UAE.

“Our vision is to expand across the Middle East. Our mission is to connect with farmers and help solve their problems. Then we go to potential buyers.”

For now, Ghoorcom’s main destination markets are Amman and Irbid, with buyers segmented by their size and geographical location.

“It’s a very challenging process to convince retailers to buy from us. They worry about our commitment — they want reliable, fresh, quality supplies,” said Oqeili.

Already about 200 farmers have signed up to the platform, which began by focusing on oranges and now sells seasonal produce.

“We match farmers with retailers. Each season produces different types of crops — in winter it’s citrus fruits like oranges and lemons, while summer produces watermelon and grapes.”

Ghoorcom is partnering with an IT company to build a blockchain system to ensure product quality. The system will verify the quality of the produce by adding a code to every box of both vegetable and fruits. This code incorporates various details on the produce including seed type, soil type and country of production.

Ghoorcom’s various features should help farmers reduce their reliance on intermediaries.

“The big issue with middlemen relates to micro-financing,” said Oqeili. “Some middlemen lend farmers money to grow their produce at a high interest rate. This sometimes creates unfair trade terms for farmers who are restricted to growing specific types of products for the middleman.

“Late payments are another huge problem for small farmers — we’ve reduced the payment period so that farmers using our platform are paid on time.”

Oqeili’s grandparents were agricultural workers and he knew from a young age that he too wanted a career in the sector. He has a degree in accounting and finance, plus a masters’ degree in agricultural economics from the University of Birmingham in Britain.

On returning home from his studies, he worked full-time as a business development manager, creating Ghoorcom in his spare time. The company, which has a staff of six, participated in a six-month, EU-funded start-up incubator in 2017.

Currently, Ghoorcom is self-funded, having turned down potential investors, although Oqeili is keen to find the correct partner to help the business to grow.

“I’m seeking a visionary investor who believes in helping farmers, who believes in social enterprise as well as in creating a successful, profit-driven business,” Oqeili said.

“Someone who believes in our capability to add value to the market. I’m very willing to collaborate with investors who can support us in achieving our vision.”


Gulf of Oman tanker attacks jolt oil-import dependent Asia

Updated 15 June 2019
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Gulf of Oman tanker attacks jolt oil-import dependent Asia

  • Iranian threats to close the Strait of Hormuz have alarmed Japan, China and South Korea
  • Japan’s conservative prime minister, Shinzo Abe, was in Tehran when the attack happened

SEOUL: The blasts detonated far from the bustling megacities of Asia, but the attack this week on two tankers in the strategic Strait of Hormuz hits at the heart of the region’s oil import-dependent economies.

While the violence only directly jolted two countries in the region — one of the targeted ships was operated by a Tokyo-based company, a nearby South Korean-operated vessel helped rescue sailors — it will unnerve major economies throughout Asia.

Officials, analysts and media commentators on Friday hammered home the importance of the Strait of Hormuz for Asia, calling it a crucial lifeline, and there was deep interest in more details about the still-sketchy attack and what the US and Iran would do in the aftermath.

In the end, whether Asia shrugs it off, as some analysts predict, or its economies shudder as a result, the attack highlights the widespread worries over an extreme reliance on a single strip of water for the oil that fuels much of the region’s shared progress.

Here is a look at how Asia is handling rising tensions in a faraway but economically crucial area, compiled by AP reporters from around the world:

WHY ASIA WORRIES

The oil, of course.

Japan, South Korea and China don’t have enough of it; the Middle East does, and much of it flows through the narrow Strait of Hormuz, which is the passage between the Arabian Gulf and the Gulf of Oman.

This could make Asia vulnerable to supply disruptions from US-Iran tensions or violence in the strait.

The attack comes months after Iran threatened to shut down the Strait of Hormuz to retaliate against US economic sanctions, which tightened in April when  the Trump administration decided to end sanctions exemptions for the five biggest importers of Iranian oil, which included China and US allies South Korea and Japan.

Japan is the world’s fourth-largest consumer of oil — after the US, China and India — and relies on the Middle East for 80 per cent of its crude oil supply. The 2011 Fukushima nuclear disaster led to a dramatic reduction in Japanese nuclear power generation and increased imports of natural gas, crude oil, fuel oil and coal.

In an effort to comply with Washington, Japan says it no longer imports oil from Iran. Officials also say Japanese oil companies are abiding by the embargo because they don’t want to be sanctioned. But Japan still gets oil from other Middle East nations using the Strait of Hormuz for transport.

South Korea, the world’s fifth largest importer of crude oil, also depends on the Middle East for the vast majority of its supplies.

Last month, South Korea halted its Iranian oil imports as its waivers from US sanctions on Teheran expired, and it has reportedly tried to increase oil imports from other countries.

China, the world’s largest importer of Iranian oil, “understands its growth model is vulnerable to a lack of energy sovereignty,” according to market analyst Kyle Rodda of IG, an online trading provider, and has been working over the last several years to diversify its suppliers. That includes looking to Southeast Asia and, increasingly, some oil-producing nations in Africa.

THE GEOGRAPHY AND THE POLITICS

Asia and the Middle East are linked by a flow of oil, much of it coming by sea and dependent on the Strait of Hormuz.

Iran threatened to close the strait in April. It also appears poised to break a 2015 nuclear deal with world powers, an accord that US President Donald Trump withdrew from last year. Under the deal saw Tehran agree to limit its enrichment of uranium in exchange for the lifting of crippling sanctions.

For both Japan and South Korea, there is extreme political unease to go along with the economic worries stirred by the violence in the strait.

Both nations want to nurture their relationship with Washington, a major trading partner and military protector. But they also need to keep their economies humming, which requires an easing of tension between Washington and Tehran.

Japan’s conservative prime minister, Shinzo Abe, was in Tehran, looking to do just that when the attack happened.

His limitations in settling the simmering animosity, however, were highlighted by both the timing of the attack and a comment by Iranian Supreme Leader Ayatollah Ali Khamenei, who told Abe that he had nothing to say to Trump.

In Japan, the world’s third largest economy, the tanker attack was front-page news.

The Nikkei newspaper, Japan’s major business daily, said that if mines are planted in the Strait of Hormuz, “oil trade will be paralyzed.” The Tokyo Shimbun newspaper called the Strait of Hormuz Japan’s “lifeline.”

Although the Japanese economy and industry minister has said there will be no immediate effect on stable energy supplies, the Tokyo Shimbun noted “a possibility that Japanese people’s lives will be affected.”

South Korea, worried about Middle East instability, has worked to diversify its crude sources since the energy crises of the 1970s and 1980s.

THE FUTURE

Analysts said it’s highly unlikely that Iran would follow through on its threat to close the strait. That’s because a closure could also disrupt Iran’s exports to China, which has been working with Russia to build pipelines and other infrastructure that would transport oil and gas into China.

For Japan, the attack in the Strait of Hormuz does not represent an imminent threat to Tokyo’s oil supply, said Paul Sheldon, chief geopolitical adviser at S&P Global Platts Analytics.

“Our sense is that it’s not a crisis yet,” he said of the tensions.

Seoul, meanwhile, will likely be able to withstand a modest jump in oil prices unless there’s a full-blown military confrontation, Seo Sang-young, an analyst from Seoul-based Kiwoom Securities, said.

“The rise in crude prices could hurt areas like the airlines, chemicals and shipping, but it could also actually benefit some businesses, such as energy companies (including refineries) that produce and export fuel products like gasoline,” said Seo, pointing to the diversity of South Korea’s industrial lineup. South Korea’s shipbuilding industry could also benefit as the rise in oil prices could further boost the growing demand for liquefied natural gas, or LNG, which means more orders for giant tankers that transport such gas.