Proposed Business Model for SME Farmers in
Peri-Urban Sydney Region
Ana Hol, Omar Mubin and Athula Ginige
School of Computing, Engineering and Mathematics, University of Western Sydney,
Penrith NSW 2751, Australia
Keywords: Business Model, Farmers, SMEs, Scenario based Analysis, Scenario based Transformation.
Abstract: Literature indicates that SME (Small to Medium) farmers in peri-urban Sydney, Australia region are faced
with uncertainties when selling their produce. Majority of farmers sell produce via agents, some sell
produce via markets however in either case farmers do not get the full overview or the transparency of the
expected market demands and prices. To identify if a suitable business model could be proposed, a carefully
selected group of five peri-urban farmers has been studied in detail. Results indicate that through
collaboration and networking farmers would be able to get a comprehensive overview of the markets and
the digital-eco-system. In addition it is expected that this would further allow farmers to sell their produce
via both traditional sale mediums as well as new more enhance mediums of the digital era.
1 INTRODUCTION
Even from the very early civilizations Agriculture
played a major role in human’s life. For centuries it
was one of the most crucial sources of food and life.
With new developments industrialisation started
dominating. Tools and technologies started
automating the work on and off the field which in
turn saw a rise in the use of machines and
consequently led to mass productions (Toffler,
1990).
Today, we find ourselves in a knowledge era
where technologies abound. Individuals and
businesses, all make use of ICT (Information and
Communications) tools and systems to create
networks, find information, process transactions and
do business.
In early developmental days however, aim of the
technologies was to speed up production and
automate certain tasks (Dutta, 2009). These days’
organisations and individuals often require more.
They often seek timely, accurate and specific
information in a given time and place so that they
can make appropriate decisions and complete tasks
utilizing new emerging business models. At present
times we are witnessing exchanges, transfers and
ultimately integrations of information across the
various stakeholders. The paradigm where systems
are organic and where its properties can change
quickly based on the received environmental or
internal stimuli is becoming more and more
prevalent in todays business. Such paradigm through
literature is referred to as a “Knowledge Eco-
system” (Nachira et al., 2007).
To be able to study and further review the
knowledge eco-system, where businesses interact
with the other agents it is crucial to understand the
nature of the environment that surrounds them.
In Australia for example, and many other
countries in the world, SMEs (Small to Medium
Businesses) tend to pre-dominate the business scene.
In New South Wales, Australia 70% of businesses
are SME (Griffith and Wilkinson, 2012). This in
turn means that for SMEs to be successful they
cannot just operate as isolated components of the
system but instend be active system components that
are able to change and consequently meet the
environmental demands of the whole eco-system, its
surrounding environment. Out of 70% of businesses
that are classified as SMEs, 8.7 % of businessess in
some way contribute to the Agricultural industry
sector (Connolly et al., 2012), which represents a
significant number of businesses that are engaged in
the sector.
Furthermore, research indicates that the duopoly
of the two major Australian supermarkets, Coles and
Woolworths, has been creating in the recent times
137
Hol A., Mubin O. and Ginige A..
Proposed Business Model for SME Farmers in Peri-Urban Sydney Region.
DOI: 10.5220/0005061601370144
In Proceedings of the 11th International Conference on e-Business (ICE-B-2014), pages 137-144
ISBN: 978-989-758-043-7
Copyright
c
 2014 SCITEPRESS (Science and Technology Publications, Lda.)

has been negatively affecting the peri-urban Sydney
regional farmers and in turn has made it very
difficult for the farmers to work with the large
market players due to their inability to easily meet
large market demands (Keith, 2012).
Therefore, to explore how best Sydney peri-
urban SME farmers could be assisted to assure their
existence and productivity is not negatively
impacted a detailed investigation of current most
common farm selling process has been conducted.
This investigation also reviews most common issues
and problems farmers in peri-urban Sydney region
are experiencing. Furthermore, this study also
helped identify if and to which extend a new
business model could be proposed to assure healthy
eco-system is sustained. Therefore, to conduct a
detailed investigation literature review has been
conducted to analyse to which extent SME farmers
around the world are currently making use of
technology.
2 SME FARMERS WORLD WIDE
Review of the literature world-wide identified that
the complex nature of agricultural processes
translates into farmers requiring key components of
information at particular time of the crop growth
lifecycle. For example, farmer advisory services in
Africa have been well grounded in literature
(Gakuru et al., 2009), where a range of primarily
mobile telephony systems are used to disseminate
timely information to farmers. Prior research in
ICT4D and Human Computer Interaction (HCI) has
also evidenced and provided solutions in the form of
context-aware ontological systems (Walisadeera et
al., 2013) to Interactive Voice Response Forums
such as Avaaj Otalo (Patel et al., 2010) that farmers
could utilise to gather context – farm location and
time – of the year specific data.
Furthermore, research conducted by The Social
Life Network (SLN) project in Sri Lanka is yet
another example of the effective translation and
marriage of farmer information needs with ICT (Di
Giovanni et al., 2012). In the SLN project a system
comprising of a mobile application provides a list of
suitable crops for the climatic conditions where the
farm is located (Context specific information).
Based on this information farmer decides what crops
he/she is going to grow and what the sale likelihood
in the coming season is going to be. Furthermore,
such system allows farmers to carefully plan
production levels. The system also based on the
social pixels integrates this information and based on
it derives the current production and demand levels
for each of the crops for the various regions (Ginige
et al., 2013).
Therefore, to assure farmers do not overproduce
in Sri Lanka researchers developed a mobile
application that seamlessly informs farmers based on
the geographical coordinates of the farm which
produce they should grow and which ones not to.
Such information is context specific and it directly
helps farmers make financial business decisions and
also identify the most optimal future business
operation.
In addition, international research also indicates
that for farmers technologies such as mobile apps
and social networking tools have started opening
new channels of business exchanges.
This investigation points out that in agriculture,
similar as to the other industries, SME farmers are
slowly implementing technology. The technologies
implemented however as in any other area are
strongly determined by business requirement,
environmental needs, user skills and finances which
in turn represent the business eco-system.
Figure 1: Current farmer processes.
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Therefore to assess which technologies would be
the most suitable to implement in per-urban Sydney
region a detailed literature review has been
conducted.
3 SME FARMERS IN
PERI-URBAN SYDNEY
REGION
Previous researches identified that farmers within
peri-urban Sydney region in the past experienced a
range of problems. Such problems ranged from the
challenges of being required to close farms that are
too close the city urban areas to having to cope with
very high premiums (Parker, 2007). In and around
Sydney there are many farming ethnical groups that
are distinguished by their languages and cultures
(Plant et al., 2012; Parker, 2002). This is mainly
because a wide range of immigrants came to
Australia and began cultivating. (Parker and
Suriyabanadara, 2000). In turn farmers stayed close
to their communities, growing expertise and habits.
Consequently, the diverse cultural groups rarely
came in contact and collaborated. In some instances
this is due to the language barriers, while in the
others it is just a habit of following traits of their
ancestors.
Disparity of farming groups has potentially
opened issues such as the duopoly that is held by
Coles and Woolworths two Australian largest
supermarket chains (Keith, 2012). The power the
two supermarket chains have made it extremely
difficult for the small peri-urban farmers to remain
in the market.
The peri-urban Sydney area is diverse both in
terms of the nature of farmers involved as well as
the type of produce they grow.
Studies identify that farming cycles have a
number of stages and that therefore there may be a
number of areas in which farmers could be assisted.
Furthermore, researchers in developing countries
focused on the stages of on produce selection and
growth (Di Giovanni et al., 2012). Considering
however that in per-urban Sydney region farmers
tend to grow same produce their grandfathers used
to grow and that such knowledge has been
transferred through generations it was identified that
early farming stages such as seeding or growth may
be hard to change and modify.
Therefore, taking into the account that in order to
make difference and help farmers survive and regain
competition it was crucial to concentrate on the main
profit outcome – the selling.
Currently it appears that farmers sell goods via a
very simple unilateral process, see Fig 1. From Fig.
1 it can be seen that currently farmers sell goods via
a very traditional Supply Chain process where
Farmers sell the picked harvest, via Agents, their
supply chain distributors. Following this, Agents the
Distributors sell the goods to the Supply Chain
Retailers or to the Larger Farm Markets.
In some manufacturing companies such
traditional relationship is still present however in
many there are numerous other ways how the goods
are sold. Today, manufacturers are gaining the
power through web 2.0 and 3.0 selling goods
directly to the customers (Egol et al., 2012).
Businesses are also exploring other non-traditional
ways in which to reach the customers. Some utilise
crowdsourcing, others auction models or online
markets which in turn could also be utilised by the
farmers.
Therefore, this research aims to identify most
suitable business models that SME farmers in peri-
urban Sydney region may consider implementing in
order to regain business and keep the peri-urban
agriculture alive.
4 METHODOLOGY: SCENARIO
ANALYSIS AND SCENARIO
TRANSFORMATION
Considering that change within the existing business
operations is required it was necessary to conduct a
detailed review of the farming stage of selling and
identify how Sales within the peri-urban Sydney
region are currently carried out.
Therefore to conduct the study of how peri-urban
farmers can be assisted five peri-urban Sydney
farmers of stone fruit were selected for this
preliminary study.
All farmers selected for the study where at least
a second generation farmers. All were proficient
English speakers and to a large extent used
computers, Internet and smart phones.
To collect the required information all farmers
were interviewed. Interviews were composed of
semi-structured questions where emphasis was
placed on a review of farming stage of selling.
While interviewing a particular focus was placed on
the areas that farmers perceived to be of concern.
Literature indicates that in past interviews and
qualitative studies have been effective in
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understanding the needs, requirements and
behavioural traits of users in regional areas (Dhir et
al., 2012; Toyama, 2010). Therefore this research
closely focuses on identification of the most crucial
issues farmers are currently experiencing. In
addition it is believed that such investigation would
also assist in determining areas of possible ICT
absorption (Kjeldskov and Graham, 2003).
Following interviews, collated data was
transcribed and then analysed utilizing the Scenario
Based Analysis (Rosson and Carrol, 2002). Scenario
Based Analysis helped generate five main scenarios
and pin point actual problems and issues each
individual farmer was currently experiencing.
Consequently, with this principle we in detail
assessed farmers’ current situations and their
primary concerns. For details please see Tables 1-5.
Based on the first scenario it can be seen that one
of the most crucial farmer concerns is their
Table 1: Farmer Scenario 1.
Scenario 1
Situation
-Works on his own.
-Proficient user of technology.
-Sells produce via agent.
Concerns
-Farming is becoming unprofitable.
-Young people are not interested to work
on the farm.
-Minimum wages are not easy to afford.
-Most farmers sell via agents and it is not
possible to know if prices are fair.
-Farmers are unaware of true product
value.
-There is no common regional farming
association
-Farming is community specific
-There is currently lack of
communication among farmers
Table 2: Farmer Scenario 2.
Scenario 2
Situation
-Works on his own.
-Proficient user of technology.
-Comes from a family of farmers.
-Sells produce via agent.
Concerns
-Duopoly created by Woolworths and
Coles is causing small markets to shrink.
-Years ago there were training and
subsidy, these days it is not present.
-Communication amongst farmers is very
scarce.
-As a farmer he sells via agent and he
expects that he is getting about 50% of
selling price but is uncertain.
-There are too many agents and not
enough farmers
relationship with the agents and their inability to
identify the actual product value.
Scenario two further supports issues raised in the
first case and also identifies that relationship
between agents and farmers is unstable. It also
points out that larger supermarkets are holding the
market and that for the small farmers to stay they
will need to identify best means in how to survive
within current marketing demands.
Table 3: Farmer Scenario 3.
Scenario 3
Situation
-Works on his own.
-Comes from a family of farmers.
-Uses Facebook, Local Blogs for
marketing. Sells via agent and from a
farm.
Concerns
-Farmers are sticking to old operation
routines.
-Farmers do not know how much their
products are really worth as they are
often sold via agents.
-He is one of the rare farmers who does
not only rely on the agent but uses
Facebook to advertise locally
Scenario three further points out that in order for
farmers to survive they will need to move away from
traditional operations and to try to identify more
flexible business model that could assist them in
achieving their much needed outcomes.
In addition, this scenario identifies that social
networking tools even in farming may create desired
outcomes and may allow farmers to get in touch
with their current and potential customers.
Scenario four points out that in and around
Sydney there are regular markets that farmers can
attend. It is in turn one of the other avenues that
farmers may employ to advertise and sell their
produce.
Table 4: Farmer Scenario 4.
Scenario 4
Situation
-Farmer a number of full time employees.
-Comes from a family of farmers.
-Sells at the local market and via agent.
Concerns
-Farmers are sticking to old operation
routines.
-Farmers do not know how much their
products are really worth as they are often
sold via agents.
-He also sells directly at the local markets
though feels that at the moment it is not
an effective and predictable
-There is a lack of communication
amongst farmers.
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Table 5: Farmer Scenario 5.
Scenario 5
Situation
-Works on his own.
-Sells via agent.
Concerns
-Works via agent and is unsure of the
profit agent is making
-Farmers do not have the transparency. It
is unsure how much farmers produce is
really worth.
-Farmers can rarely sell directly to the
markets due to the pre-set quantity
requirements
Scenario five identifies that at the current stage there
is no price transparency. Farmers see that agents are
earning on them and that they are often forced to sell
their produce via the agents as they are unable to
meet marketing demands to sell to the markets
individually.
Furthermore from the tables above, it can be seen
that most farmers operate within the same
environment – effectively the same-ecosystem. It
can also be seen that some of their most pressing
issues and concerns focus on agents, produce prices
and quality transparency, market demands and
farmer communication. Following the analysis, the
aim was to identify a business model that could suite
the interviewed farmers.
5 PROPOSED BUSINESS MODEL
FOR PERI-URBAN SYDNEY
SME
Based on the conducted literature reviews it is
predicted that a new model will closly resemble
operations that are currently happning in the other
industries, meaning that relationships between
Farmers, Agents and Markets will become a lot
more dynamic than today. This will mean that at
times Farmers may decide to colaborate, same as it
possibly could be suitable for Markets or the Agents.
This would also mean that new introduced system
would alow for new relationships to form potentially
even on a need basis dimacially. Furthermore, this
would meant that each group of the eco-system
components or effectively the sub-systems, would be
based on the customer specific market or the
environment to respond to the set requirement.
Based on the findings it can be identify that there
will be three most likely scenarios that may shape
Farmer operations in the years to come.
Firstly Farmers may start selling goods to the
Markets directly, secondly with the dynamic
ecosystem changes Markets may seek ways in how
to attract most suitable farmers and finaly Farmers
may still continue to work with the agents however
such interaction would require the current power
relations within the new eco-system to change.
Therefore, it can be seen that the nature of work
with agents would need to change. Moreover, this
would mean that farmers may need to look into
Figure 2: Networked infrastructures.
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141

Figure 3: Farmers selling directly to markets.
Figure 4: Farmers working via agents.
diversification and the identification of the suitable
mechanisms in which to meet the customer
demands.
It was also identified that it will be crucial for
the price and the quality of the produce to reach
transparency where farmers will be aware of how
much their produce is really worth.
In addition, it is also crucial for the
improvements in communication among local
farmers to occur. At present it seems that various
communities do not have many touching points
where they can exchange information. This also
often means that current markets are trying to utilise
this to gain the advantage. Therefore if farmers are
to utilise one of the collaboration systems and share
farm, agent and price crucial information the system
would start creating the much needed knowledge
and would help assist the survival of farming within
the region.
In the case where Farmers completely bypas the
agent, it can be seen that the disindermidiation may
happen. However, to assure that this model is
sustainable it will be essential to identify ways in
which Farmers alone would be able to meet the set
market demands. Currently, most farmers sell vai
agents to larger markets. If farmers are to continue
selling to large markets they will need to identify the
most sufficient way for it so that they can assure that
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they can meet the set quality and quantity demands.
This would mean that farmers within the region
would need to unite, so that they no longer only act
as competitors but also as collaborators. In the case
that they decide to work as collaborators it would be
advisible that they create one regional brand by
which their customers woul be able to get to know
them. Following this a brand could help create an
association to local, fresh fruit produce.
Furthermore farmers could explore meeting the
demands of local markets. In Sydney area there are
currently Sunday markets that are attended by local
farmers however at present not many farmers seem
to attend them due to the high uncertanties.
Based on this farmers could explore other
avaenues how best to cater to their local comunities.
From collected data it can be seen that one of the
local farmers is exploring ways to attract younger
generations to farming and fresh produce by
Facebook, a meadium of younger generations to
engage with local families and promote his farm
produce.
For the SME farmers at this stage it is very hard
to compete with the large multi milion dollar
businesses. To sustain their business operations
however they will need to utilise the knowledge they
have, their experiences and the envirenment in order
to advance and capitalise on their strengths.
Based on the current scenarios it seems that
currently agens help identify markets and sell goods
consequently agens tend to know the markets well.
The power that agents currently have over the
farmers need to be decreased and power given back
to the manufacturer, or the actual producer, the
farmer.
At present power is with the agents as there is no
one single way in how to monitor produce prices and
how to identify earnings farmers in a reality deserve.
If farmers are to come together and sell as groups to
the agents then they can control the markets more.
Farmers would need to start collaborating and
sharing the information to assure agents are their
equal business partners. Giving farmers the ability to
overview prices agents are gaining may help support
and built future Farmer Agent Relationships.
It is expected that not just one described model
will be implemented. Instead it is expected that
relationships will form per needs basis and more
often than not mashups of the proposed models may
occure.
In the new proposed model it is expected that
farmers would have a system via which they would
be able to collaborate. Consequently, prices of
products will start to gain the transparency which
will in turn have the positive effect for the peri-
urban Sydney farmers.
Furthermore, it is also expected that farmers will
begin to explore use of digital tools more effectively
which will help them built the digital eco-system
and consequently help them gain larger audinces and
powers to compete. This will furthermore open new
opportunities amongsts the big marketplayers and
will inevitably decrese the agents powers.
6 CONCLUSIONS
In the future it is expected that current supply chain
operations SME farmers in the peri-urban Sydney
region currently follow will in time change. As it is
seen within other industries if only unidirectional
exchange is to continue to happen agriculture within
the region will be likely to disappear. If on the other
hand, agriculture within the region is to survive, it
will be essential to re-set its eco-system. It is
essential to move away from the old natures of
operation and identify what is possible today with
the currently available technologies. Following this
it is crucial farmers within the region act as one
because otherwise it may be extremely hard to meet
the larger marketing demands. Furthermore, it will
be essential to utilize the available technologies,
particularly the social networking tools. In addition,
it will be important to break down the power agents
currently hold over the market prices and allow the
transparency so that market prices can be established
and farmers be able to predict the earnings.
In the future proposed business models will be
reviewed with the peri-urban farmer Sydney
community. Following this a suitable change model
will be identified, implemented and tested. It is
predicted that initial steps will be relatively smalls
while later on much larger and more comprehensive
changes will follow.
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