Interview with : Erwin Sikma
Founder and CEO of Impact Terra
Please introduce yourself and briefly explain about Impact Terra to our readers.
My name is Erwin Sikma, co-chair of digital advocacy group and founder and CEO of Impact Terra which is an agriculture-technology company in Myanmar. With that company, we help farmers. I was looking at providing services to help many people with their day-to-day lives and looked at different sectors like education, healthcare and social services.
Then, I ended up at agriculture as it is a huge industry in Myanmar which forms 40% of economy and about 70% of the population is working in agriculture and farming. It was a big opportunity to help many people. During my travel across Myanmar and rural areas, I saw many people have smart phones including farmers who need a lot of help. So that’s why I chose to set up Impact Terra.
How different is it for doing business in agricultural sector when compared to other sectors, especially in Myanmar’s frontier market?
Agriculture is a very large sector but very underdeveloped. Its key players, such as small farmers are spread across the country and often in remote areas. Besides, each player has limited money to invest in their businesses. We work hard to support farmers in addressing these challenges to make their business profitable and our food production better.
I think Myanmar still needs support from abroad like not only from government and institutions but also from EU companies.
Before I started Impact Terra, I set up some sort of online market places here in Myanmar which was called Rocket Internet. It was more focused on urban areas like Yangon, Mandalay, Taunggyi and Nay Pyi Taw where people have smartphones, laptops, internet, and digital business development as well. So it was more difficult in doing business in rural areas, especially with farmers. I think the biggest difference is how people quickly they learn how to use technology. It is more in industrial sectors and other services that you need to develop yourself.
For an example, there is now more infrastructures available in Yangon, like 4G, telecommunication structure and a better bus system, better delivery services. The whole infrastructure has a little bit improved and easier. And there is a lot of companies and a lot of new businesses that are all focused on bigger cities. So if you have your own services or businesses, you can use other services to deliver you own services. However, in rural areas, which are far away from bigger cities and a little less available, make things even more difficult. So, even if your services are really good, you need other services like infrastructure, like internet, like power or like logistic payments to be available and to be able to deliver your services. So, that is still a big challenge in Myanmar.
What are the biggest challenges for Myanmar in next 1-3 years?
I think Myanmar still needs support from abroad like not only from government and institutions but also from EU companies. There still need a lot of knowledge, money to go into country for it to develop itself. So we need to invest in people, we need to invest in infrastructures which I think is really important to continue to happen. Investors have also said that Myanmar was once seen as a country opening up and having positive developments a couple of year ago but now the brand,… the way people look at Myanmar is unfortunately less positive. So, I think we need to turn that around and we need to make sure again that Myanmar is seen by the world as a very interesting opportunity, not only for tourism but also for businesses and that is developing and focusing on right things to reach to a developed nation.
It is very important if we continue to keep getting acknowledged and getting funding in trade and investments from other countries especially for local companies which are in great need of international services and knowledge. That is why I believe Myanmar is in need of investments from different sectors and it is difficult to get that. What we have realized is that investments are not overnight opportunities instead they need to be long-term investments and long-term cooperation.
Another big challenge is that there are still out-dated laws and regulations which make both local and international companies difficult to operate and difficult things like fiscal years that are changing and investment climates which are improving. These operational challenges take away a lot of time, people and money that we as companies should invest into product and service development.
But of course, Myanmar still remains as a developing country which is facing many challenges and that’s why we, companies, are here to sort them out and fix by working together with partners but on the other hand government and bigger associations should focus on the challenges that are out of our control.
How can we take advantage of business and investment opportunities in agriculture sector?
As an agriculture focused country, it should be more strategic in where it will focus its agricultural production. Still, people are growing paddy and rice rather in low qualities and crops that do not add much value. The quality of the products is rather very low. So we need to focus on more investments in quality control and value-added production. The country’s ministry of agriculture should be looking to those better and made strategic decisions on what it wants to be in next five to ten years. We, service companies, will help support both farmers and value chain to be addressed in agricultural sector.
How far can we reach with digital innovation in agriculture sector?
I think we can reach very, very far. We have already reached millions of farmers from online channels and marketing channels that are providing services and information that help them in their daily business. We can reach people and be in touch with them. But what is more important is that, what you do with them or services you provide to them with. And there, we need support.
We need to provide them with a lot of information and advices. Additionally, we try to help farmers reach to financial institutions from which they can get loans and proceed the farming processes. We keep farmers to connect with available suppliers such as pesticides and other fertilizers in their place through digital platform.
It is still challenging for farmers to have financial inclusion as there are not so many banks readily made for farmers and less development in infrastructure providing digital services and products in the market. So, we need more investments in good people, infrastructure and value chain to have agriculture sector to reach to a next level.
What products and services are available at Impact Terra?
Through our Golden Paddy mobile application (the product) we provide advice & alert services, connect farmers to the market and introduce them to micro-finance institutes for better loans.
If you could suggest one change to government policies, what would it be?
The government should expedite new regulation allowing crop insurance products, stimulate selected value chains with funding and people (extension officers) and stimulate micro-finance institutions and banks to finance small farmers. All parties want to move forward but with strong government support big improvements will be made.