The adverse impact of COVID-19 is taking a toll on the global economy and closer to home, Malaysia’s GDP contracted at 3.4% in the fourth quarter of 2020 with all of the major sectors of the economy posting a decline, including the agriculture sector by 1.0%.*

Despite the threat, a year after its establishment, airasia farm remains bullish on the agriculture sector as Covid-19 and the continued Movement Control Order (MCO) implemented by the government to break the transmission of the pandemic brought a new outlook on the agriculture supply chain, job creation and food security.

Rebranding the agriculture supply chain

airasia farm was established during the Recovery Movement Control Order (RMCO) in June 2020 as a one-of-its-kind B2B match-making platform connecting producers directly to businesses. Backed by airasia Digital and supported by the Ministry of Agriculture and Food Industries (MAFI), airasia farm uses technology and data to fulfil the demand from F&B outlets and supermarkets by matching it to the nearest agro producers, so the delivery of the produce can be done in the most cost efficient and effective manner while maintaining the freshness and quality of produce.

By the end of 2020, airasia farm has on-boarded over a thousand agriculture, aquaculture and poultry producers and supplied to about 100 businesses from SMEs to chain stores. airasia farm has not only reduced the procurement cost of fresh produce by up to 25% for the businesses which allowed them to continue operating during these tough times but also helped to increase producers’ income by opening new markets and eliminating middlemen in the supply chain.

This is made possible by leveraging on airasia’s ecosystem such as e-commerce - airasia fresh, online grocery platform; logistics - Teleport, covering inter-city and inter-state first mile and last mile services; loyalty program - BIG Rewards, allowing everyone to earn and redeem loyalty points with every purchase; and the airline connectivity for cross border trading.

airasia farm was rebranded from OURFARM ASIA in April 2021 to further streamline the group’s ecosystem and to complement airasia’s transformation into a leading one-stop travel and lifestyle e-commerce platform, with the focus on fresh produce.

Datuk Kamarudin Meranun, Executive Chairman of airasia Group said: “airasia is the people’s airline and it has a strong brand presence across all walks of life. The brand familiarity paves way for airasia farm to penetrate the market as our target segment believes in our credentials in delivering the best value and service to our customers. This is especially important as we further expand our business regionally and soon to build export and import capabilities. My heartiest congratulations to the airasia farm’s team for this milestone and we hope to continue disrupting the agriculture supply chain to support the food security agenda of the nation.”

YB Datuk Seri Dr. Ronald Kiandee, Minister of Agriculture and Food Industries commented: “The sustainability of our agriculture and food industries rest upon technology to not only be more progressive and competitive, but also to ensure food security. Especially in times like these, where agricultural e-commerce can transform the way agricultural products are sold and the way farmers manage their produce.

“In realising this vision, the Ministry has been proactive in engaging industry players such as airasia farm which has been instrumental in revolutionising the agriculture supply chain by leveraging on airasia Group’s ecosystem of e-commerce and logistic capabilities.

“We applaud Airasia Farm’s continued growth as a disruptor in the agriculture trade and the Ministry is looking forward to its expansion.”

Ever ready to facilitate the marketing and distribution of local produce (from both West and East Malaysia), MAFI via Department of Agriculture (DOA) and Federal Agricultural Marketing Authority (FAMA) engages closely with airasia farm to promote the ‘Harumanis Kembali Lagi’ campaign. This collaboration not only expanded the distribution of Harumanis across Malaysia, but also brought the exclusive mangoes to Sabah officially for the first time, in line with the Ministry’s emphasis on high-valued agriculture that can create economic opportunities for the people. Following the collaboration, airasia farm has sold more than 10 tonnes of the much-sought-after mangoes nationwide in a month.

airasia farm is a result of MAFI's B2B e-commerce platform project where the Ministry has been proactive in engaging industry players, especially in helping to match businesses to e-commerce platforms on both the business-to-consumer (B2C) and business-to-business (B2B) fronts. This strategic partnership will create a new ecosystem that can help agri-businesses expand with greater outreach, offering better value for money for end-consumers.

Cultivating employment in agriculture

A year in operation, airasia farm has registered about 2,000 full-time producers, including over 170 from Sabah and contract farmers, with a number of additional employees along the supply chain such as drivers, logistic handlers, business development executives, farmer relationship executives, quality assurance executives and more.

Joanna Ibrahim, CEO of airasia farm stressed the importance of cultivating employment in agriculture, especially during the pandemic to increase the production and supply of fresh produce. “In the long term, by enhancing its logistics capabilities through the increase of its supply chain and connectivity, airasia farm seeks to create over 100,000 new jobs, directly or indirectly in the process,” she said. She also stated that contract farming will play an important role for airasia farm and in the future of agriculture, in line with MAFI’s goal to attract the next generation to join contract farming as a viable career path and a long-term impact of uplifting the B40 communities.

Ensuring food security through digital capabilities

In addition to the pandemic and MCO, the seasonal weather in the country has also taken a toll on the agriculture producers. Earlier this year, the flood has reportedly affected hectares of pineapple farms in Johor - incurring millions in losses, submerged a stretch of vegetable farms in Sabah, ravaged livestock farms in Pahang and many more, affecting the nation’s food security. 

Realising the impact of such events, airasia farm is setting up its warehouse of 10,000 square feet in Selangor and 6,000 square feet in Sabah by Q3 2021. When completed, the warehouse will serve as a 3-in-1 Digital Agri Centre including a cold chain facility, office space and training space for farmers and SMEs. Our strategy is to collaborate together with the farmers, suppliers and logistic arms to ensure that the supply chain is export ready.

The warehouse will not only store tonnes of fresh produce but will be utilised as a quality control centre, sorting and distributing fresh produce with cold chain services to ensure fresh produce that is high in demand will be readily available and sufficiently stocked to avoid losses during downtime, ensuring the local food security. In addition to the facilities and infrastructure to ensure quality of produce, all of airasia farm’s handlers are fully covered by the required vaccinations, have attended food safety courses and practice strict and stringent hygiene measures.

“Last December, we tested our cold chain service through Teleport by delivering fresh prawns from Sabah directly to us in Klang Valley. It took less than 18 hours for door-to-door delivery with uncompromised quality! We are proud of this milestone as it shows that the freshest seafood from Sabah will be easily available in Peninsular Malaysia, creating a greater footprint for the producers in East Malaysia,” said Joanna.

Also, in line with the country’s plan in advancing the agriculture sector and boosting producers’ income, airasia farm is placing greater emphasis on digital-driven solutions in agriculture by partnering with airasia fresh as the main merchant for Fresh Xpress, a new same day delivery service. All fresh groceries on Fresh Xpress are directly sourced through airasia farm, which helps our farmers to stay afloat during the lockdown.

With the MCO 3.0 in place, this initiative helps the community to shop for their groceries online and stay at home to curb the pandemic. As one of the firsts fresh produce wholesalers in Asean that works with multiple partners and platforms to match their supply with market demand including home businesses especially during the pandemic, airasia farm also enables the producers to clear their harvests and livestock especially during these challenging times. Looking ahead, airasia farm will also be expanding to a B2C platform as an online grocery retailer.

Giving back sustainably to the needy, helping the farmers community

Aside from providing a convenient platform to market extensively their produce, airasia farm also assists farmers in unloading their fresh crops by distributing them to the less fortunate communities together with numerous non-governmental organizations (NGOs), private companies and individuals who would want to donate essentials and fresh produce. 

From March to May 2021, airasia farm and its Corporate Social Responsibility (CSR) partners including IKHLAS, Tune Talk, Zer0hunger, The Hope Branch, SedapTV, and others have assisted close to 1,000 families nationwide.

While the infra is a key component and the staff management is equally as important, we also invest our effort and time into ensuring the produce that we acquire from farms and suppliers are of high quality - we have a team of Quality Control (QC) staff that pay great attention in this area and are out and about in various farms working with farmers on not only quality of these produce but also proper packaging that will ensure freshness.

Working towards a sustainable agriculture sector is a collective effort and we look forward to welcoming more producers, full time or contract farmers, businesses especially SMEs and industry players to join the airasia farm family by contacting moo@airasiafarm.com.

***

*Malaysia Economic Performance First Quarter 2021