Virtual Dedicated Economic Centers [VDECs]

University of Colombo School of Computing

ICT 2013
E-Business Technologies and Applications

Virtual Dedicated Economic Centers

SECOND YEAR GROUP ASSIGNMENT

Lecturer: - Dr. Shiromi Arunatileka

Date of Submission
23rd of November 2012

Index Numbers of Group Members

H.D.G.B.Chandradasa - 10020071

R.M.S.V.Rathnayaka - 10020438

D.G.T.Mendis - 10020578

L.T.Hettiarachchi - 10020675

P.M.S.K. Palansooriya - 10021108

A.F. Shahaniya - 10020055

Virtual Dedicated Economic Center | Page 0 of 31

Table of Contents

ABSTRACT ............................................................................................................................... 2
ACKNOWLEDGEMENT ......................................................................................................... 3
1) Introduction ........................................................................................................................... 4
2) The Virtual Dedicated Economic Center............................................................................... 5
2.1) Problem ........................................................................................................................... 5
3) Operational Project in a similar domain ................................................................................ 8
3.1) Govi Gnana Service
3.2) Was this project succeeded? ........................................................................................... 9
4) Proposed e-Business Solution ............................................................................................... 9
5) Feasibility Analysis ............................................................................................................. 12
5.1) Technical feasibility ...................................................................................................... 12
5.2) Legal feasibility ............................................................................................................ 12
5.3) Organizational feasibility .............................................................................................. 12
5.4) Financial feasibility....................................................................................................... 12
6) SWOT analysis .................................................................................................................... 18
6.1) Strengths ....................................................................................................................... 18
6.2) Weaknesses ................................................................................................................... 18
6.3) Opportunities................................................................................................................. 19
6.4) Threats........................................................................................................................... 19
7) PESTEL Analysis ................................................................................................................ 20
7.1) Political factors ............................................................................................................. 20
7.2) Economic factors .......................................................................................................... 20
7.3) Social factors ................................................................................................................. 20
7.4) Technology factors........................................................................................................ 21
7.5) Environment factors ...................................................................................................... 21
7.6) Legal factors.................................................................................................................. 22
8) Sustainability of the proposed e-business solution, (VDECs) ............................................ 23
9) Reference List ..................................................................................................................... 26
10) Appendices ........................................................................................................................ 28
Appendix A: Field Survey.................................................................................................... 28
Appendix B: Questionnaire .................................................................................................. 29


List of Figures

Figure 1: Population Density of Sri Lanka ........................................................................................... 05

Figure 2: Vegetable Distribution System in Sri Lanka ......................................................................... 05

Figure 3: Abstract e-business solution………………………………………………………11

Figure 4: Prices at Market……………………………………………………………………………14

Figure 5: Prices at Farmer end……………………………………………………………………...14

Figure 6: Minimum price [Farmer vs. Market]……………………………………………………15

Figure 7: Maximum price- [Farmer vs. Market]………………………………………………….15

Figure 8: Minimum Price – Market vs. System……………………………………………………16

Figure 9: Maximum Price – Market vs. System……………………………………………………16

Figure 10: Maximum/Minimum Price – Market & system……………………………………….17

Figure 11: Information requirements and business processes offering opportunities for mobile
applications along the value chain …………………………………………………………………….23

List of Tables

Table 1: Additional Transport Cost………………………………………………………....12


ABSTRACT

Dedicated Economic Centers in Sri Lanka play a major role of Sri Lankan agro-economy.
The Dedicated Economic Centers (DECs) were established under several long term
objectives to resolve critical issues which have been emerged in the Sri Lankan agro-
economical sector. But still, DECs couldn’t achieve those objectives completely. Apart from
that, there are many consequent minor issues emerged around the DECs. This paper presents
a possible e-business solution to address those issues. And it will also support to achieve
previous objectives and eliminate the issues which were plugged-in with existing solutions.
Most of the time, this solution is based on secondary data which is available in other
research papers. The pilot research we launched in Welipitiya, Kurunegala was the
information source for the primary data.

Key Words: - Dedicated Economic Centers, Sri Lankan agro-economical sector, e-business
solution

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ACKNOWLEDGEMENT

We would like to thank Dr. Shiromi Arunatileka for her continuous support and guidance in
the preparation of this paper. Without her invaluable supervision, all our efforts could have
been short-sighted.

Mr. W. M. G Ananda helped us immensely to provide information related to our report.
B.D.Nihal Weerasinghe, B.M.Jayasundara, B.M.Rathna Bandaranayaka, B.M.Sarath
Samarakoon, B.M.Sugathkumara Banadaranayaka, J.D.Jayasinghe, P.M.Jinadaasa,
R.D.Chaminda Dipal, R.M. Chandrasiri Rathnayaka, R.M.Ekanayake Jayathilaka,
R.M.Siriwardhana, R.M.Sumith Rathnayaka, W.D.Piyasili, Y.M.Ilagarathna helped us in
providing statistical data of vegetable prices.

And we would like to thank our colleague Damith Ekanayake who helped us a lot in
gathering information via questionnaires and analyze information in relation to our project
topic.

We owe quit a lot to our families who provided us the chance to fulfill our career objectives
and for the support throughout our studies. We would like to dedicate this study to them as an
indication of their significance in this study as well as in our lives. Finally, we are responsible
for any errors occurred in the project report.


1) Introduction

Since ancient times Sri Lanka had a strong agriculture based economy. Majority of Sri
Lankans who lived in rural areas were depended on agricultural economy. After 1970’s this
agricultural economy drastically faced into a crisis due to the economic reforms implemented
in the country from 1978.

To overcome this situation government launched several projects to uplift the agricultural
economy. Establishing Dedicated Economic Centers (DECs) island wide was such project.
This project was started in 1998, as means of implementing marketing development strategy
to provide marketing facilities for producers in the rural areas. This project was launched
under several primary objectives (Ministry of Co-operatives and Internal Trade, 2010).

 Ensure obtaining reasonable prices for agricultural producers for their crops by
providing target market.

 Provide opportunity to small scale producers to minimize their transport costs and
wastage in transportation.

 Encourage business community by providing competitive marketing environment for
wholesale traders.

 Create opportunity to distribute area specific agricultural products among people in all
parts of the island.

 Provide facilities for consumers to purchase food items at cheaper prices.

And now it has been more than a decade and 12 DECs have been established island wide. But
still symptoms of the crisis haven’t disappeared from the Sri Lankan agro-economy. What
happened to the objectives of DECs project? Was that project failed?
Even objectives of the DECs have been achieved in some extent; DECs failed to give full
contribution to resolve the issues that have been emerged around this industry sector. And
also another set of consequence issues have been emerged around the DECs.

There are many factors contribute to the dismal situation that has evolved, but key failures are
incapability of finding a wide market available nearby these agro-ecological zones and
lengthiness and the complexity of traditional off-line vegetable marketing channels.
By identifying the matters that are currently resulted in this agro-economic domain, we are
going to propose new ICT enabled e-business solution “Virtual Dedicated Economic
Centers (VDECs)” to address these problems occurred in this industry sector.


2) The Virtual Dedicated Economic Center
2.1) Problem

According to Sandika AL (2011), in Sri Lanka,
more than ninety nine percent of vegetable
production is consumed by the local consumers.
And most of the vegetable production is done in the
agro-ecological zones which are in dry and
intermediate zones of Sri Lanka. But both of these
zones have less density of population comparing to
the Sri Lankan wet zone. Thus the market is quite
narrow and has less demand for the agro products
nearby where the vegetables are produced.
Considering Sri Lankan wet zone the situation is
quite different. As wet zone have the highest
population density, there's an enormous demand for
the agricultural products. But due to inefficient and
improper marketing channels, dry and intermediate
zone farmers have lots of entry barriers to that Figure 1: Population Density of Sri
available market. Hence there's always a big Lanka
mismatch between demand and supply in (Department of Census and
geographically dispersed areas. Statistics, 2003)

According to the idea of Saliya Kumara Gunasekera (2011), due to that reason 100% of
farmers are depending on nearest DECs in
finding the market for their agro products like
the largest agro-ecological zones like
Dambulla, Anuradhapura, and Polonnaruwa.
Only Dambulla and Thambuththegama DECs
are facilitating the market requirement for
this zone. Therefore large amount of
(approx.: 50 - 70 Mt in Dambulla DEC)
vegetable production is pumped into the
DECs daily. But the demand is too low when
it's comparing to the supply. Due to this large
amount of vegetable production DECs are
failed in handling this large amount. As a
result of that a considerable amount of
vegetables are wasted in the market floor and
dumped into sensitive environments such as
forests, reservoirs and rivers nearby which
Figure 2: Vegetable Distribution System in
Sri Lanka (Sandika AL, 2011)


causes another set of environmental problems also.

While the farmers prefer to sell their products in nearby markets most of the wholesale
buyers also prefers to buy the products in the same manner. In that case the role of the middle
men comes into play to fill the distance gap between this business channels. Sandika AL
(2011) expresses that the middlemen intervention is an important positive factor for this
business scenario because of his important functionalities. It can be accepted when it's
traditional offline business. But they expect profit in return. Hence, if there is unnecessary
chain of middlemen at several stages of the business then it leads to unnecessary increment of
prices in the consumer market.

Other than these primary issues we have identified some secondary issues in this sector which
also to be addressed by our e business solution. Those are mentioned as follows.

1. Cultivations are not regulated through a central body and there is no proper plan in the
side of the government to control the cultivation in the season times.
Excessive cultivations results to unnecessary productions which resulting to no return for
the farmers. It also affects the country’s economy.

2. Incapability of handling large amount of crops brought into DECs maximizes the wastage
of the crops.

Though government says that there are enough facilities to store the cultivation in seasons
it is not the truth. As Riyad Riffai states Sri Lankan rice farmers lose up to 20 percent of
their harvest due to poor storage. Furthermore record indicates that around 15 to 20
percent of paddy perishes annually due to poor storage facilities. This is the collapse of
rice storage. Hence we don’t want stories on other crops as we can experience the
wastage of them at Economic Centers.

3. Farmers are poor, unable to participate in society in the manner worthy of their
contributions and unable to benefit from development.

As Harsha De Silva (2006) explains it is not because these rural farmers are lazy. They
fight with soil and the sweat to open their lives into a triumph. They pawn their all
properties to get their fertilizer and pesticides and they pray for rain in time. Not only
pawning, they pray for rude floods and droughts telling not to put their fields destroyed.
After all happened farmer will go on the flatbed truck not on the front seat but in the back
sleeping on his crops thinking of a good price.

4. Failure in producing marketing.

“Fifty years of state intervention in this area did not bear fruit. The state institutions
intended to coordinate demand and supply of agricultural produce between farmers and
state outlets did play somewhat of an allocation role during the closed economy.” (Harsha
De Silva, 2006, pg 2)


“However, with the policy shift to an open economy where state agencies were forced to
compete with private enterprise, these institutions failed after incurring heavy losses.
Today, more than 30 years after the adoption of free market policies that were inter alia
expected to eliminate poverty, farmers continue to be poor. They do not receive a fair
price for their produce and are being forced out of business.”(Harsha De Silva, 2006, pg
2)

5. Farmers’ incapability of accessing the technology.

According to the research paper conducted by Harsha De Silva (2006), a key assumption
in economics is that basic information about the state of the market is available to market
participants. This is true for most of the market types but for the agricultural market it is
not true in Sri Lankan context.

There are proven track of records that emphasizes the asymmetry of accessing data. The
person who will reach the accurate data will be the winner in this scenario. Now, there is
emerging global evidence that if farmers are given basic access to agricultural prices at
nearby markets, their incomes could significantly improve. A time ago, University of
California’s study in rural China as reported in “TheFeature” found that farmers with
access to market prices via mobile telephones were able to increase their incomes by 60
percent.

“There are several other current pilot projects like “Kenya Agricultural Commodities
Exchange (KACE)” and “Huaral Valley Network in Peru” that are attempting to use
mobile Internet to make a difference in the lives of rural farmers. However, the evidence
is not all positive. A study by “Panos Institute” found that attempts in Uganda to deliver
price information to farmers had failed with much of the information bypassing farmers
with many of them too poor to access the Internet. The situation was exacerbated by a
lack of coherence in the way information was presented.” (Harsha De Silva, 2006, pg 2)

6. Farmers don’t have good knowledge of their market demand.

According to the explanation of Harsha De Silva (2006), a farmer expects a fair return on
his investment as other entrepreneurs. Sometimes he gets this return, but other times he is
not so “lucky”. Not like most entrepreneurs, farmers do not have good knowledge of their
market demand for the most part. The typical problem is farmer doesn’t know the ideal
crop to settle with. He only provides what the whole seller expects from him without
knowing the actual market condition. When considering the harvest, farmer will not be
getting consistent one. Problem is he is not producing without knowing the market
condition. As this happens, banks are reluctant to provide financial assistance for farmers.

Therefore the farmer depends on the wholesale buyer and the commission trader. Farmer
knows the actual demand after came into the market. There he is late. This is the


discussing problem every day. If the demand is high he will get a high price. If not he gets
a low price. If the demand is not so worth he looks for the mountain of garbage. Unlikely,
this is the sad situation to be told.

If the price that the farmer receives is not sufficient to pay off his loans, he falls in to
greater debt at usurious rates. He is then unable to afford the right quantities of fertilizer
and pesticide in the next season which results in lower yields and poor quality produce,
leading to lower income. After that, farmer gets caught by the market prices. It is unlucky
to say again same routing happens. The reason why farmer suicides in Sri Lanka are
many is precisely this unfortunate predicament that the farmers face.

3) Operational Project in a similar domain

3.1) Govi Gnana Service

The Govi Gnana Service (GGS) project was launched by Consortium of local firms led by e-
development labs to strengthen the farmers’ knowledge in the market condition in local
languages. Not only that, provide information to farmers and getting information from
farmers were objectives of this project.
“If project get succeeded, GGS will be able to create thus far illusive stability in farmer
income by bringing in a calculated certainty in to the now unpredictable and volatile produce
prices that they receive. It will help farmers to plant crops according to forward contracts and
raise crop loans using the guaranteed future revenue as collateral.” (Harsha De Silva, 2006)

According to the Harsha De Silva (2006), given six months duration and a tight budget, the
first phase of the GGS pilot was implemented at the Dambulla Dedicated Economic Centre
(DDEC). The pilot objectives to achieve were identified as follows:

1. To create efficiencies in the spot markets at DDEC by capturing and disseminating live
prices across the markets for farmers and traders to negotiate the best price based on accurate
information for crops already brought to the market.

2. To help farmers obtain the best possible price by disseminating real-time prices to
locations outside the market hence that they could decide whether they should bring in the
already harvested produce to the DDEC, or sell locally.

3. To create a simple platform for Forward Sales Contracts (FSC) centered at DDEC by
creating an e-bulletin board for farmers and traders to jointly determine what to produce and
when and what price to sell.

4. To enable easier access to short-term crop loans from participating banks by linking them
to the FSC platform. This is done by allowing banks direct access to farmers’ new collateral.


5. To improve agriculture extension services by linking up with various agriculture related
portals and emerging initiatives of the Department of Agriculture.

3.2) Was this project succeeded?

This project experienced some sort of a triumph rather than the existed manual process at
DDEC. But our opinion is this project has looked only at certain aspects of the objectives.
Below mentioned points will brief you the drawbacks of this GGS project.

1. They could achieve more success if this project had been launched in several DECs as
that project would engage with farmers in different areas in Sri Lanka. We are saying
like that because not all farmers would come to DDEC to sell their products. All
farmers around the country are not having the same passion.

2. The GGS price dissemination with large spot screens has not been in place for long
enough to understand the status. The main reason being, farmers who visit the market
only once in two weeks or thus need to get used to the new information first before
they begin using the same regularly.

3. GGS signed an agreement with Dialog Telecom in order to launch this project via
Dialog Tradenet. That project was not succeeded than thought. In our opinion it is
because of farmers’ lack of knowledge on technology and lack of marketing strategies
of Dialog Telecom. Presently in Tradenet we can see only few people are registered
for virtual marketing.

4) Proposed e-Business Solution

After analyzing all these issues related to the vegetable market in Sri Lanka, we introduce the
“Virtual Dedicated Economic Center” concept as an e-Business solution. Through the VDEC,
we are not focusing to override whole market channels behind this scenario. But as an initial
step we are focusing on busiest market channels.

The main vision of the VDEC system is to provide access to island wide market for the
farmers and wholesale buyers and reduce the complexity and lengthiness of the vegetable
market channels by implementing new online business methodologies to vegetable market.

System is consisted of three types of end users. Those are the Farmer, Wholesale Buyer and
Government. The system will captures all the data about farmer's cultivation in every village
via a Government officer who have been appointed to act as the intermediate person to
communicate between the system and farmers. At the initial stage system is interested in pre
harvest data such as currently cultivated vegetable types, expected harvest seasons, expected


harvest amounts, area and etc. It’ll give a broad picture about the harvest to be produced
within the country in upcoming seasons. The government would be very interested about
such details which can be used in their strategic planning. For an example, if certain
vegetable is expected to produce excessive amount beyond the country’s demand it will leads
to great wastage in upcoming months. Government can regulate the new cultivations of that
vegetable for the farmers. And also government can encourage growing certain vegetable if
it's happening other way around.

When the harvesting season is started, farmer can sell his production in online market by
sending a selling request via the intermediate person. And also wholesale buyers also can go
through the system and accept the farmers selling request to purchase the amount that he
want. There's a minimum limit of kilos that wholesale buyers can buy from this online
market. Also buyers can forward a buying request to the system which can be accepted by a
farmer who can supply the request.

For the payment procedure system will link up with currently available money transferring
methods. Most of the time we suggest that to link up with money transferring method such as
Dialog easy cash service. Once a buyer buying via the system at the time he should do the
full payment. But the payment should be on hold for the farmer until farmer hand over the
vegetable lot to the nearest railway station. The buyer also can clear his vegetable lot from
the nearest railway station for him. Once deal is done via the system all the transporting are
happening offline. For that we suggest to use railway transport which costs very low amount.

Analyzing the strategic position of the particular industry will involve an assessment of both
its internal and external environment since the future strategy of industry needs to achieve a
'good fit' with its environment. Therefore we can use several kinds of standards to analyze the
feasibility of the proposed solution.

* Abstract process of the VDEC will be on the next page.


Figure 3: Abstract e-business
solution

5) Feasibility Analysis

5.1) Technical feasibility

We are going to use available telecommunication networks to create our virtual network.
Since we are targeting general public customers we are going to use simple technologies
available (For the farmer end applications and business end).

To create the central modules we can use PHP and MySQL mainly because they are FOSS
technologies.

5.2) Legal feasibility

In this project when it comes to transactions we suggest to divert them to financial institutes,
Banks or telecommunication networks (ex- dialog) that have authority to carry out monitory
transactions. And to handle the central governing body there is an entity with a participation
of government and it will take the responsibility of the systems activities.

5.3) Organizational feasibility

According to the data we gathered both farmers and targeted customer base is ready to accept
the technological and cultural changes that are going to happen.

5.4) Financial feasibility

These calculations are based on our research. We are calculating transport cost to the
Colombo market because we have taken end market’s data from the “Colombo Manin
market” using worst case scenario.

Additional transport cost

No Description Cost (SLR.)/Kg
01 Kurunagala, Welipitiya to Ganewatha (Nearest 5
railway station through main road)
02 Railway Transport 2
03 Normal VAT rate on railway transport (12%) 0.24
Total 7.24
Table 1: Additional Transport Cost


1. Since we are targeting small business 200kg of goods been shipped to the nearest
railway station for Rs1000 will be charged. There for per Kg charge will be Rs5 (If
they are transporting larger quantities per Kg cost will be reduced).
2. These calculations are from Sri Lankan railway pricings (Ganewatha to Colombo Fort
for 200kg).

3. If government categorizes this system as a special purpose entity we can reduce this
tax burden.

* Graphical analysis of the vegetable prices will be in the next page.


Figure 4: - Prices at Market
end

Figure 5: - Prices at Farmer end


Figure 6: - Minimum price Farmer vs. Market

Figure 7: - Maximum price- Farmer vs. Market

Figure 8: - Minimum Price – Market vs. System

Figure 9: - Maximum Price – Market vs. System


Figure 10: - Maximum/Minimum Price – Market & system
vs. System


6) SWOT analysis

6.1) Strengths

These are the facts that are going well in this proposed e-business solution, such as its
competitive advantage or the skills, competences, morale of the individuals within it and
major successes.

 Willingness to accept technology.

Here the target market can be identified as vegetable sellers in rural areas. Whilst as a
significant advantage, after conducting a research it confirms that most people are willing
to accept the technology of using applications. Because the attitude of the target people
hugely affected when forming new business solutions.

 Reasonable knowledge.

Nowadays most of the people are very familiar with technology usage. Therefore, we can
consider the most of the people have reasonable knowledge to handle this kind of
procedure with technology improvements.

6.2) Weaknesses

These are the things that may be going badly in this solution as a result of failures in some
factors.

 Lack of analytical skills.

Most of the vegetable producers are having lack of analytical skills. It means most of
them are not doing this job on behalf of a profit maximizing objective. They only do it for
lifetime occupation.

 Organizing issues.

Most of the vegetable sellers are not well organized. As a result, they are trying to
increase the selling price for their vegetables individually and that will negatively affect
for sales, because there are so many players exist in this agricultural industry. Buyers will
able to bargain with different prices. After market sellers choose the lowest bargaining
price, it will hugely affect some vegetable producers. Therefore the producers should
organize well enough to maximize their sales.


6.3) Opportunities

 Constant sales volume and trends.

With the direct relationship between manufactures (producers) and buyers (customers),
there are no intermediaries exist in the distribution channel. By doing this, market price of
a particular product diminishing drastically due to no increments happens in the
distribution chain. Therefore the end price of the product become low, hence sales
volumes will rise up and it will lead to the profit maximization.

 Job opportunities.

New opportunities of job facilities would arise for each village. As an example,
representing intermediate person will be assigned to each village in order to bridge the
relationship between both sellers and the government. Intermediate person will be a
government appointed person who checks and set the price for each vegetable and
establish direct communication among government, seller and buyer.

6.4) Threats

 Bargaining power of intermediaries.

In this industry, bargaining power of intermediaries is very high. They are dealing with
several vegetable buyers who are having different prices that help to catch the lower price
of each vegetable in different markets. As a result, producers will not get the expected
output from their cultivation.

 Nature issues.

One of the major obstacle that can be identified as nature issues in agro ecological sector.
For example, some periods are dealing with lack of water sources due to drought seasons
and in contrast to that at another time there will be huge rains which cause flood make it
obsolescence.

 Harvest selling problems

Another threat that can be occurred is harvest selling problem. Sometimes due to some
reasons there may be not significant constant price for some vegetables. It means most of
the times; the vegetable sellers fail to achieve their sales targets with the expected profit
margin. Most of the time they couldn’t cover the cost of cultivating and it will incur a loss
for the farmer.


7) PESTEL Analysis

7.1) Political factors

 Government policy

A policy means that a principle or rule to guide decisions and achieve rational outcomes.
Government policies can affect business both directly and indirectly. In Agro ecological
industry there are several government policies, exist to make proper procedures to follow
effectively in some operations. When we are focusing on policies of the government,
producers and sellers have to follow the government themes such as “API WAWAMU,
RATA NAGAMU’’.

 Unstable structure

There is no proper industry formed structure to handle activities which are involving in
agricultural sector. Therefore it might drive some uncertain issues. If we want to
overcome these issues, government’s strict policies on agricultural sector should come in
to the practical market.

7.2) Economic factors

 Price fluctuation

Fluctuations of fertilizers, other relevant chemicals and equipments may directly affect the
economic factors and energy fluctuation trends may indirectly affect also. Due to these kinds
of fluctuations it will deliberately reduce the possibility of planning and organizing
operations. Furthermore it may be difficult to evaluate or judge the cost for each operation.

 Constant demand aspects

This might involve the wide variety of economic factors and consumer activities of spending
patterns, willingness to spend and their behaviors. For example in recession period of trend,
many products and services tend to fall. This kind of agro ecological sector will be unable to
achieve a constant demand due to uncertain factors.

7.3) Social factors

 Accept the new ideas with new generation.


Most of the time people are doing jobs for making money in order to live safely and
happily. The new generation has been becoming through innovative agro ecological
concepts for getting more profit and to have many hopes. Because young people in the
modern society have the knowledge about agriculture from their school time. Caring that
path, there are young people doing granting vegetables in new methods using the
technology.

Also there is a negative side can be identified as the resistance to accept the technology of
old aged people. Because they are not very familiar with new technology improvements
and not having enough knowledge can lead to make chaos in their career path.

 Career attitudes

According to the historical sources agriculture is becoming from the ancient history in Sri
Lanka, but unfortunately in the 20thcentury it is coming with new technology and many
people are doing different types of agriculture based careers. The attitudes towards
agriculture are being decreased due to the facilities and rewards in modernized
avocations.

7.4) Technology factors

 Low supporting

Now, the business operates in a world with rapid technological advancement. This is a
field to get more product mainly depend on the people with their working capability.
Focusing the innovative technology will assist farmers in producing more harvest. But
most of the people in this sector wouldn’t apply new technologies because old typical
ways of doing cultivation have been rooted in their minds.

 Industry entering support

There is a huge barrier to introduce this concept because new technological elements did
not exist up to this time. Therefore before implementing the system it is important to give
a proper knowledge about the procedures that going to be implemented. Industry Culture
is a strong point which will take more effort, time to change the suppliers and consumers
opinion.

7.5) Environment factors

 Environment forces


There are number of variables which can impact on firms and they are difficult to predict and
understand. This is the major obstacle that can be identified as environment forces in agro
ecological sector. For example, some periods are dealing with lack of water supply due to
drought seasons and flood can destroy harvest while making it obsolescence. Therefore this
kind of uncertainty makes it difficult to make reasonable assumptions about future.

7.6) Legal factors

 Rules and regulations

Rules and regulations also have to be considered before implementing a project which is
controlled under government bodies. While implementing the system stake holders should
follow necessary guidelines that are designed to ensure more reliable and efficient operations.

 Financial forces

Increasing finance and investment to rural areas is a vital part of addressing food security and
poverty reduction. Rural finance encompasses the range of financial services offered and used
in rural areas by people of all income levels. It includes agricultural finance, which is
dedicated to financing agricultural related activities such as input supply, production,
distribution, wholesale, processing and marketing. Agricultural value chain finance takes
account of those inter-linked processes from farm to consumer and uses them and them to
increase efficiency and lower risk in lending. Furthermore microfinance provides financial
services for poor and low income people by offering smaller loans and savings services,
while accepting a wider variety of assets as collateral (FAO, 2012).


8) Sustainability of the proposed e-business solution, (VDECs)

1) Some surveys clustered that the mobile applications can be used for the information flow
of agricultural value chain (Syngenta Foundation, 2011).

ICT’s power is in collection, processing and distribution of information. Each stakeholder
involved in the agricultural value chain has different functions, interests and information
flows that need to be managed.

a) Extension services.

According to Syngenta Foundation (2011), applications discussed under this category
cover communications required to transfer and exchange knowledge and experiences
to and among farmers, to facilitate the dissemination of information from research and
extension agencies to farmers.

Figure 11: Information requirements and business processes
offering opportunities for mobile applications along the
value chain, (Syngenta Foundation, 2011)


According to Syngenta Foundation (2011) mobile projects in agricultural extension can be
classified in to two broad categories.

I. mLearning

As Syngenta Foundation (2011) expresses this type of learning method can be used on
farming techniques and trends, information on plants and varieties and how to grow them,
etc. This mainly takes the form of one-way push communication to subscribers to a service
(e.g. general information related to particular crops, weather forecast) or enables users to send
queries to a database. More interactive forms also offer possibilities for exchanging
experiences among farmers.

II. mFarming

Individual decision-support systems and services based on localized contextual information
can be introduced into the agricultural context. mFarming requires remote sensing
instruments and GIS. It can also involve advice systems such as remote diagnosis of diseases
by experts.

2) Market information and interaction facilities.

An information system can be implemented to inform farmers about prices of different inputs
and agricultural commodities in different trading locations. The use of mobile technology can
be introduced here in order to increase the market transparency.

3) Introduce and improve support services and systems.

a. Operational process management.
b. Quality control: Communications between parties such as farmer and whole sale
buyer, government and farmer help to facilitate exchange of quality of products and
non-economic values as external inputs to the agro market.

c. Logistics and business process management: Applications that facilitate sound
business processes in rural areas (e.g. transporting agricultural commodities, tracking
goods).
d. Financial services: Communications and processes to provide financial services
such as payment or insurance to rural farmers and agents involved in the agriculture
value chain.


4) Partnerships among reputed agro based companies such as CIC, Browns, Lankem and
Heyleys.

This system can be further enhanced with collaboration among reputed agro based companies
in order to optimize the business process. As prestigious companies involve in this system,
parties who are communicating with the system will get more reliable mind on this system.
At the government point of view they can sign agreements with above mentioned ventures in
order to supply agro products for reasonable prices. And also government can obtain some
percentage from their profit under considerable policies. This will help both farmers and
government in order to accomplish their planned goals.


9) Reference List

 AGS, 2012, AGS: Agricultural finance and investment, [online], Available at:
http://www.fao.org/ag/ags/agricultural-finance-and-investment/en/, [Last accessed 21st
Nov 2012].

 C.S. De Silva,E.K. Weatherheadb, J.W. Knoxb,J.A. Rodriguez-Diazc, 2007, Agro-
ecological zones and the main paddy rice growing areas in Sri Lanka, [Image online],
Available at: http://ars.els-cdn.com/content/image/1-s2.0-S037837740700162X-gr1.jpg,
[Last accessed date 20th Aug 2012].

 Department of Census and Statistics, 2003, Population Density of Sri Lanka, [Image
online], Available at: http://www.globalsecurity.org/eye/images/srilanka_pop-map.jpg,
[Last accessed 21st Aug 2012].

 Harsha De Silva, 2006, Regional Consultation on Linking Farmers to Markets, [online],
Available at:
http://globalfoodchainpartnerships.org/cairo/presentations/HarshadeSilva.pdf, [Last
accessed 16th Oct 2012].

 Ministry of Co - Operatives and Internal Trade - Sri Lanka, 2012, DEDICATED
ECONOMIC CENTERS (DECs). [Image online], Available at:
http://www.trade.gov.lk/web/images/ecocenter/base/base_map.jpg [Last accessed date
20th Aug 2012].

 Neyo. 2012, Over 30,000 kilos destroyed at Dambulla Economic Centre, [online],
Available:
http://www.digathanews.com/index.php/index.php?option=com_content&view=article&i
d=1636:over-30000-kilos-destroyed-at-dambulla-economic-
centre&catid=72:latest&Itemid=120, [Last accessed 27th Aug 2012].

 Newsroom, 2010, Sri Lanka - Farming problems, [online], Available:
http://www.meattradenewsdaily.co.uk/news/041110/sri_lanka___farming_problems_.asp
x, [Last accessed 14th Sep 2012].

 Riyad Riffai, 2011, Lanka Business Report, [online], Available:
http://www.lbr.lk/fullstory.php?nid=201108072318316899, [Last accessed 14th Sep
2012].

 Saliya Kumara Gunasekera. 2012, GANGSTER RULE at Dambulla Economic Centre,
[online], Available:
http://lakbimanews.lk/index.php?,ption=com_content&view=article&id=744:gangster-
rule-at-dambulla-economic-centre&catid=40:news&Itemid=64, [Last accessed 27th Aug


2012].

 Saliya Kumara Gunasekera, 2011, Large scale waste at Dambulla Economic Centre,
[online], Available:
http://www.lakbimanews.lk/index.php?option=com_content&view=article&id=1344%3A
large-scale-waste-at-dambulla-economic-centre&Itemid=56, [Last accessed 27th Aug
2012]

 Sandika AL, 2011, Vegetable distribution system in Sri Lanka, [online], Available at:
http://www.agri.ruh.ac.lk/tare/pdf/V_14.3/%283%29AEC%2010%2001.pdf, [Last
accessed 20th Nov 2012].

 Syngenta Foundation, 2011, Home - Syngenta Foundation For Sustainable Agriculture
(SFSA), [online], Available at:
http://www.syngentafoundation.org/__temp/Report_on_mAgriculture_abridged_web_ver
sion.pdf, [Last accessed 21st Nov 2012].

 Unknown Author, 2012, DEDICATED ECONOMIC CENTERS (DECs), [online],
Available:
http://www.trade.gov.lk/web/index.php?option=com_ecocenter&Itemid=98&lang=en.
[Last accessed 27th Aug 2012].

 Unknown Author, 2012, DEDICATED ECONOMIC CENTERS (DECs), [online],
Available:
http://www.trade.gov.lk/web/index.php?option=com_ecocenter&Itemid=98&lang=en.
[Last accessed 27th Aug 2012].


10) Appendices

Appendix A: Field Survey
Introduction

A field survey was carried out in our project. This was carried out to satisfy our primary data
requirements.

Followings are the main objectives of our survey

 Identify the technological awareness of the farmers.
 Identify the attitude of the farmers towards new e-Transformed businesses.
 Identify the issues in finding market for their vegetable product.
 Average cultivating vegetable categories and capacities.
 Identify the price ranges received for their products seasonally.

Sample

The sample population was a set of farmers who are highly involved with the vegetable
production in the dry zone. Survey was done in several villages belongs to Rambe,
Madahapola agrarian centers in the Kurunegala district as a pilot survey.

Methodology

A questionnaire is used as the surveying methodology. The questionnaires were presented to
the farmers and given answers were recorded by the students. Around seventeen farmers were
interviewed in the pilot survey.

Conclusion

 Nearly 66.66% of farmers are depending on the nearest DEC in finding their market.

 Average cost for the transportation to Dambulla DEC: Rs 5166.66 (≈ Rs 109 per Km).

 Average transportable vegetable volume per time: 4430 Kg.

 Maximum and minimum selling price variations identified as follows.


Appendix B: Questionnaire

ක ොෂඹ වි඾්ල විදයා඼යය ඳරිගණ අධ්යයනායතනය - කතොරතුරු රැව්කිරීකේ ඳත

විද්යුත් කලෂ඲ තාක්඿ණ අධ්යනය

නම :
…………………………………………………………………………………………………
………………………………………………………………………..

ලිපිනය
:…………………………………………………………………………………………………
…………………………………………………………………….

අයත් කගොවිජන කවේලා මධයව්ථානය
:…………………………………………………………………………………………………
……………………………

ලගා රන කශෝ ලගා ඼ ක ෝග

ක ෝගය ඼ැබූ කශෝ උඳරිම මි඼ අලම මි඼ අව්ලනු ඼ැබූ
අකේක්ෂිත අව්ලනු (ආවන්න (ආවන්න ා඼ල ලානුල
ේරමාණය ල඾කයන් ල඾කයන්
(ආවන්න කික඼ෝල මි඼) කික඼ෝල මි඼)
ල඾කයන් කික඼ෝ)

ඔ ලයාඳාරි අරමුණකින් කතොරල එකශත් කලෂ඲ඳ඼ තු඼ යේ ලටිනා මක් වහිත ක ෝග
ලගා රන්කන්ද? එකවේනේ ඒ කමොනලාද?

…………………………………………………………………………………………………
………………………………………………………………………......................


අව්ලනු විකිණීමට ශාවිත රන කලෂදඳ඼ කුමක්ද?
…………………………………………………………………………………………………
………………….

වාමානයකයන් එක් ේරලාශන ලාරය දී අව්ලනු විකිණීම ව඲ශා රැකගන යෑමට දැරිය යුතු ප්‍රලාශන
කුලිය ……………………………………………

වාමානයකයන් එක් ප්‍රලාශන ලාරය දී රැකගන යා ශැකි අව්ලනු ප්‍රමාණය (ආවන්න ල඾කයන් කික඼ෝ)
………………………………………………

ඔ කේ අව්ලැන්න කුමන කශෝ කශේතුලක් මත කල඼දඳ඼ට ඉදිරිඳත් කිරීම අත්ශැරදැමුකේද? එකවේ නේ
එම කශේතු වශ අව්ලනු ප්‍රමාණය ආවන්න ල඾කයන්.

ක ෝගය අව්ලනු ේරමාණය කශේතු
(ආවන්න

ඔ කේ අව්ලැන්න කුමන කශෝ කශේතුලක් මත කල඼දඳ඼ තු඼දී ඉලත දැමීමට සිදුවිණිද? එකවේ නේ එම
කශේතු වශ අව්ලනු ේරමාණය ආවන්න ල඾කයන්.

ක ෝගය අව්ලනු ේරමාණය කශේතු
(ආවන්න

ඔ කේ අව්ලැන්න විකිණීම වදශා ක ොඳමණ ා඼යක් කලෂදඳ඼ තු඼ ගතකිරීමට සිදුවිණිද?
……………………………………......................

ඔ කේ අව්ලැන්න විකිණීම වදශා කලෂදඳ඼ තු඼දි යේකිසි අකයකුට කශෝ යේකිසි ආයතනය ට කශෝ
ගාව්තු කගවීමක් සිදු ර තිකේද? එකවේ නේ ඒ කමොනලාද?


…………………………………………………………………………………………………
………………………………………………………………………......................

ඔ කේ නි඿්ඳාදන කලෂදඳ඼ තු඼ විකිණුකේදී වාමාන්යකයන් ඔ මුහුණකදන ගැටලු කමොනලාද?

…………………………………………………………………………………………………
………………………………………………………………………......................

…………………………………………………………………………………………………
………………………………………………………………………......................

…………………………………………………………………………………………………
………………………………………………………………………......................

ඔ ට වතුල ජංගම දුර ථනයක් තිකේද? එකවේත් කනොමැති නේ ඔ නිලකවේ වාමාජි යන් වතුල ජංගම
දුර තන තිකේ ද?

…………………………………………………………………………………………………
………………………………………………………………………......................

ඔ ට ජංගම දුර ථන ාවිතකයන් ක ටි ඳණිවුඩ යැවීකේ ශැකියාල තිකේද? එකවේත් කනොමැති නේ ඔ
නිලකවේ වාමාජි යන් ශට ජංගම දුර ථන ාවිතකයන් ක ටි ඳණිවුඩ යැවීකේ ශැකියාල තිකේද?

…………………………………………………………………………………………………
………………………………………………………………………......................

ඔ නිලකවේ ඳරිගණ යක් තිකේද?
………………………………………………………………………………………

ඔ ඳරිගණ ආශ්‍රිතල සිදු ඼ ශැකි කලෂද ටයුතු පිළි ඲ දැනුලත්ද?
………………………………………………………………………………………

ඔ ඳරිගණ ආශ්‍රිත කතොරතුරු තාක්඿ණය ශාවිතකයන් ඔ කේ අව්ලනු විකිණිමට අලව්ථාල
඼ැබුලකශොත් ඔ ඒ ව඲ශා ැමැත්තක් දක්ලන්කන්ද?

…………………………………………………………………………………………………
………………………………………………………………………......................

ඒ තුලින් ඔ කේ ගනුකදනු ලඩාත් ඳශසු ශා ඼ා දාය ලනු ඇතැයි ඔ සිතන්කන්ද?
……………………………………………………….....................

ඒ ව඲ශා ඔ ශමුකේ ඇති ාධ කමොනලාද?

…………………………………………………………………………………………………
………………………………………………………………………......................


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