University of Colombo School of Computing                                      ICT 2013                 E-Business Technol...
Table of ContentsABSTRACT ...................................................................................................
List of FiguresFigure 1: Population Density of Sri Lanka ....................................................................
ABSTRACTDedicated Economic Centers in Sri Lanka play a major role of Sri Lankan agro-economy.The Dedicated Economic Center...
1) IntroductionSince ancient times Sri Lanka had a strong agriculture based economy. Majority of SriLankans who lived in r...
2) The Virtual Dedicated Economic Center2.1) ProblemAccording to Sandika AL (2011), in Sri Lanka,more than ninety nine per...
causes another set of environmental problems also.While the farmers prefer to sell their products in nearby markets most o...
“However, with the policy shift to an open economy where state agencies were forced to   compete with private enterprise, ...
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 ...
5. To improve agriculture extension services by linking up with various agriculture relatedportals and emerging initiative...
harvest amounts, area and etc. It’ll give a broad picture about the harvest to be producedwithin the country in upcoming s...
Figure 3: Abstract e-business          solution                                Virtual Dedicated Economic Center |   Page ...
5) Feasibility Analysis5.1) Technical feasibilityWe are going to use available telecommunication networks to create our vi...
1. Since we are targeting small business 200kg of goods been shipped to the nearest      railway station for Rs1000 will b...
Figure 4: - Prices at Market     end         Figure 5: - Prices at Farmer endVirtual Dedicated Economic Center |         P...
Figure 6: - Minimum price Farmer vs. Market                                      Figure 7: - Maximum price- Farmer vs. Mar...
Figure 8: - Minimum Price – Market vs. System                                        Figure 9: - Maximum Price – Market vs...
Figure 10: - Maximum/Minimum Price – Market & system                                      vs. SystemVirtual Dedicated Econ...
6) SWOT analysis6.1) StrengthsThese are the facts that are going well in this proposed e-business solution, such as itscom...
6.3) Opportunities Constant sales volume and trends.   With the direct relationship between manufactures (producers) and ...
7) PESTEL Analysis7.1) Political factors Government policy   A policy means that a principle or rule to guide decisions a...
Most of the time people are doing jobs for making money in order to live safely and   happily. The new generation has been...
There are number of variables which can impact on firms and they are difficult to predict andunderstand. This is the major...
8) Sustainability of the proposed e-business solution, (VDECs)1) Some surveys clustered that the mobile applications can b...
According to Syngenta Foundation (2011) mobile projects in agricultural extension can beclassified in to two broad categor...
4) Partnerships among reputed agro based companies such as CIC, Browns, Lankem andHeyleys.This system can be further enhan...
9) Reference List   AGS, 2012, AGS: Agricultural finance and investment, [online], Available at:    http://www.fao.org/ag...
2012].   Saliya Kumara Gunasekera, 2011, Large scale waste at Dambulla Economic Centre,    [online], Available:    http:/...
10) AppendicesAppendix A: Field SurveyIntroductionA field survey was carried out in our project. This was carried out to s...
Appendix B: Questionnaire         ක ොෂඹ වි඾්ල විදයා඼යය ඳරිගණ      අධ්යයනායතනය - කතොරතුරු රැව්කිරීකේ ඳත                    ...
අව්ලනු විකිණීමට ශාවිත රන කලෂදඳ඼ කුමක්ද?…………………………………………………………………………………………………………………….වාමානයකයන් එක් ේරලාශන ලාරය දී අව්ලනු ව...
…………………………………………………………………………………………………………………………………………………………………………......................ඔ කේ නි඿්ඳාදන කලෂදඳ඼ තු඼ විකිණුකේදී ...
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Virtual Dedicated Economic Centers [VDECs]

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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.

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Virtual Dedicated Economic Centers [VDECs]

  1. 1. 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 - 10020055Virtual Dedicated Economic Center | Page 0 of 31
  2. 2. Table of ContentsABSTRACT ............................................................................................................................... 2ACKNOWLEDGEMENT ......................................................................................................... 31) Introduction ........................................................................................................................... 42) The Virtual Dedicated Economic Center............................................................................... 5 2.1) Problem ........................................................................................................................... 53) Operational Project in a similar domain ................................................................................ 8 3.1) Govi Gnana Service 3.2) Was this project succeeded? ........................................................................................... 94) Proposed e-Business Solution ............................................................................................... 95) Feasibility Analysis ............................................................................................................. 12 5.1) Technical feasibility ...................................................................................................... 12 5.2) Legal feasibility ............................................................................................................ 12 5.3) Organizational feasibility .............................................................................................. 12 5.4) Financial feasibility....................................................................................................... 126) SWOT analysis .................................................................................................................... 18 6.1) Strengths ....................................................................................................................... 18 6.2) Weaknesses ................................................................................................................... 18 6.3) Opportunities................................................................................................................. 19 6.4) Threats........................................................................................................................... 197) 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.................................................................................................................. 228) Sustainability of the proposed e-business solution, (VDECs) ............................................ 239) Reference List ..................................................................................................................... 2610) Appendices ........................................................................................................................ 28 Appendix A: Field Survey.................................................................................................... 28 Appendix B: Questionnaire .................................................................................................. 29Virtual Dedicated Economic Center | Page 1 of 31
  3. 3. List of FiguresFigure 1: Population Density of Sri Lanka ........................................................................................... 05Figure 2: Vegetable Distribution System in Sri Lanka ......................................................................... 05Figure 3: Abstract e-business solution………………………………………………………11Figure 4: Prices at Market……………………………………………………………………………14Figure 5: Prices at Farmer end……………………………………………………………………...14Figure 6: Minimum price [Farmer vs. Market]……………………………………………………15Figure 7: Maximum price- [Farmer vs. Market]………………………………………………….15Figure 8: Minimum Price – Market vs. System……………………………………………………16Figure 9: Maximum Price – Market vs. System……………………………………………………16Figure 10: Maximum/Minimum Price – Market & system……………………………………….17Figure 11: Information requirements and business processes offering opportunities for mobileapplications along the value chain …………………………………………………………………….23List of TablesTable 1: Additional Transport Cost………………………………………………………....12Virtual Dedicated Economic Center | Page 2 of 31
  4. 4. ABSTRACTDedicated Economic Centers in Sri Lanka play a major role of Sri Lankan agro-economy.The Dedicated Economic Centers (DECs) were established under several long termobjectives 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 fromthat, there are many consequent minor issues emerged around the DECs. This paper presentsa possible e-business solution to address those issues. And it will also support to achieveprevious 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 otherresearch papers. The pilot research we launched in Welipitiya, Kurunegala was theinformation source for the primary data.Key Words: - Dedicated Economic Centers, Sri Lankan agro-economical sector, e-businesssolution …………‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡‡………… ACKNOWLEDGEMENTWe would like to thank Dr. Shiromi Arunatileka for her continuous support and guidance inthe preparation of this paper. Without her invaluable supervision, all our efforts could havebeen 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.SarathSamarakoon, 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 inproviding statistical data of vegetable prices.And we would like to thank our colleague Damith Ekanayake who helped us a lot ingathering information via questionnaires and analyze information in relation to our projecttopic.We owe quit a lot to our families who provided us the chance to fulfill our career objectivesand for the support throughout our studies. We would like to dedicate this study to them as anindication of their significance in this study as well as in our lives. Finally, we are responsiblefor any errors occurred in the project report.Virtual Dedicated Economic Center | Page 3 of 31
  5. 5. 1) IntroductionSince ancient times Sri Lanka had a strong agriculture based economy. Majority of SriLankans who lived in rural areas were depended on agricultural economy. After 1970’s thisagricultural economy drastically faced into a crisis due to the economic reforms implementedin the country from 1978.To overcome this situation government launched several projects to uplift the agriculturaleconomy. Establishing Dedicated Economic Centers (DECs) island wide was such project.This project was started in 1998, as means of implementing marketing development strategyto provide marketing facilities for producers in the rural areas. This project was launchedunder 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. Butstill symptoms of the crisis haven’t disappeared from the Sri Lankan agro-economy. Whathappened 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 fullcontribution to resolve the issues that have been emerged around this industry sector. Andalso 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 areincapability of finding a wide market available nearby these agro-ecological zones andlengthiness and the complexity of traditional off-line vegetable marketing channels.By identifying the matters that are currently resulted in this agro-economic domain, we aregoing to propose new ICT enabled e-business solution “Virtual Dedicated EconomicCenters (VDECs)” to address these problems occurred in this industry sector.Virtual Dedicated Economic Center | Page 4 of 31
  6. 6. 2) The Virtual Dedicated Economic Center2.1) ProblemAccording to Sandika AL (2011), in Sri Lanka,more than ninety nine percent of vegetableproduction is consumed by the local consumers.And most of the vegetable production is done in theagro-ecological zones which are in dry andintermediate zones of Sri Lanka. But both of thesezones have less density of population comparing tothe Sri Lankan wet zone. Thus the market is quitenarrow and has less demand for the agro productsnearby where the vegetables are produced.Considering Sri Lankan wet zone the situation isquite different. As wet zone have the highestpopulation density, theres an enormous demand forthe agricultural products. But due to inefficient andimproper marketing channels, dry and intermediatezone farmers have lots of entry barriers to that Figure 1: Population Density of Sriavailable market. Hence theres always a big Lankamismatch between demand and supply in (Department of Census andgeographically 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 its 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)Virtual Dedicated Economic Center | Page 5 of 31
  7. 7. causes another set of environmental problems also.While the farmers prefer to sell their products in nearby markets most of the wholesalebuyers also prefers to buy the products in the same manner. In that case the role of the middlemen 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 thisbusiness scenario because of his important functionalities. It can be accepted when itstraditional offline business. But they expect profit in return. Hence, if there is unnecessarychain of middlemen at several stages of the business then it leads to unnecessary increment ofprices in the consumer market.Other than these primary issues we have identified some secondary issues in this sector whichalso 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)Virtual Dedicated Economic Center | Page 6 of 31
  8. 8. “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 theVirtual Dedicated Economic Center | Page 7 of 31
  9. 9. 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 domain3.1) Govi Gnana ServiceThe 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 locallanguages. Not only that, provide information to farmers and getting information fromfarmers were objectives of this project.“If project get succeeded, GGS will be able to create thus far illusive stability in farmerincome by bringing in a calculated certainty in to the now unpredictable and volatile produceprices that they receive. It will help farmers to plant crops according to forward contracts andraise 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, thefirst 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 liveprices across the markets for farmers and traders to negotiate the best price based on accurateinformation for crops already brought to the market.2. To help farmers obtain the best possible price by disseminating real-time prices tolocations outside the market hence that they could decide whether they should bring in thealready harvested produce to the DDEC, or sell locally.3. To create a simple platform for Forward Sales Contracts (FSC) centered at DDEC bycreating an e-bulletin board for farmers and traders to jointly determine what to produce andwhen and what price to sell.4. To enable easier access to short-term crop loans from participating banks by linking themto the FSC platform. This is done by allowing banks direct access to farmers’ new collateral.Virtual Dedicated Economic Center | Page 8 of 31
  10. 10. 5. To improve agriculture extension services by linking up with various agriculture relatedportals 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 atDDEC. 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 SolutionAfter 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 initialstep we are focusing on busiest market channels.The main vision of the VDEC system is to provide access to island wide market for thefarmers and wholesale buyers and reduce the complexity and lengthiness of the vegetablemarket 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 andGovernment. The system will captures all the data about farmers cultivation in every villagevia a Government officer who have been appointed to act as the intermediate person tocommunicate between the system and farmers. At the initial stage system is interested in preharvest data such as currently cultivated vegetable types, expected harvest seasons, expectedVirtual Dedicated Economic Center | Page 9 of 31
  11. 11. harvest amounts, area and etc. It’ll give a broad picture about the harvest to be producedwithin the country in upcoming seasons. The government would be very interested aboutsuch details which can be used in their strategic planning. For an example, if certainvegetable is expected to produce excessive amount beyond the country’s demand it will leadsto great wastage in upcoming months. Government can regulate the new cultivations of thatvegetable for the farmers. And also government can encourage growing certain vegetable ifits happening other way around.When the harvesting season is started, farmer can sell his production in online market bysending a selling request via the intermediate person. And also wholesale buyers also can gothrough the system and accept the farmers selling request to purchase the amount that hewant. Theres a minimum limit of kilos that wholesale buyers can buy from this onlinemarket. Also buyers can forward a buying request to the system which can be accepted by afarmer who can supply the request.For the payment procedure system will link up with currently available money transferringmethods. Most of the time we suggest that to link up with money transferring method such asDialog easy cash service. Once a buyer buying via the system at the time he should do thefull payment. But the payment should be on hold for the farmer until farmer hand over thevegetable lot to the nearest railway station. The buyer also can clear his vegetable lot fromthe nearest railway station for him. Once deal is done via the system all the transporting arehappening 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 bothits internal and external environment since the future strategy of industry needs to achieve agood fit with its environment. Therefore we can use several kinds of standards to analyze thefeasibility of the proposed solution.* Abstract process of the VDEC will be on the next page.Virtual Dedicated Economic Center | Page 10 of 31
  12. 12. Figure 3: Abstract e-business solution Virtual Dedicated Economic Center | Page 11 of 31
  13. 13. 5) Feasibility Analysis5.1) Technical feasibilityWe 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 technologiesavailable (For the farmer end applications and business end).To create the central modules we can use PHP and MySQL mainly because they are FOSStechnologies.5.2) Legal feasibilityIn 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 monitorytransactions. And to handle the central governing body there is an entity with a participationof government and it will take the responsibility of the systems activities.5.3) Organizational feasibilityAccording to the data we gathered both farmers and targeted customer base is ready to acceptthe technological and cultural changes that are going to happen.5.4) Financial feasibilityThese calculations are based on our research. We are calculating transport cost to theColombo market because we have taken end market’s data from the “Colombo Maninmarket” using worst case scenario.Additional transport costNo Description Cost (SLR.)/Kg01 Kurunagala, Welipitiya to Ganewatha (Nearest 5 railway station through main road)02 Railway Transport 203 Normal VAT rate on railway transport (12%) 0.24 Total 7.24 Table 1: Additional Transport CostVirtual Dedicated Economic Center | Page 12 of 31
  14. 14. 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.Virtual Dedicated Economic Center | Page 13 of 31
  15. 15. Figure 4: - Prices at Market end Figure 5: - Prices at Farmer endVirtual Dedicated Economic Center | Page 14 of 31
  16. 16. Figure 6: - Minimum price Farmer vs. Market Figure 7: - Maximum price- Farmer vs. MarketVirtual Dedicated Economic Center | Page 15 of 31
  17. 17. Figure 8: - Minimum Price – Market vs. System Figure 9: - Maximum Price – Market vs. SystemVirtual Dedicated Economic Center | Page 16 of 31
  18. 18. Figure 10: - Maximum/Minimum Price – Market & system vs. SystemVirtual Dedicated Economic Center | Page 17 of 31
  19. 19. 6) SWOT analysis6.1) StrengthsThese are the facts that are going well in this proposed e-business solution, such as itscompetitive advantage or the skills, competences, morale of the individuals within it andmajor 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) WeaknessesThese are the things that may be going badly in this solution as a result of failures in somefactors. 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.Virtual Dedicated Economic Center | Page 18 of 31
  20. 20. 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.Virtual Dedicated Economic Center | Page 19 of 31
  21. 21. 7) PESTEL Analysis7.1) 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 fluctuationFluctuations of fertilizers, other relevant chemicals and equipments may directly affect theeconomic factors and energy fluctuation trends may indirectly affect also. Due to these kindsof fluctuations it will deliberately reduce the possibility of planning and organizingoperations. Furthermore it may be difficult to evaluate or judge the cost for each operation. Constant demand aspectsThis might involve the wide variety of economic factors and consumer activities of spendingpatterns, 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 toachieve a constant demand due to uncertain factors.7.3) Social factors Accept the new ideas with new generation.Virtual Dedicated Economic Center | Page 20 of 31
  22. 22. 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 forcesVirtual Dedicated Economic Center | Page 21 of 31
  23. 23. There are number of variables which can impact on firms and they are difficult to predict andunderstand. This is the major obstacle that can be identified as environment forces in agroecological sector. For example, some periods are dealing with lack of water supply due todrought seasons and flood can destroy harvest while making it obsolescence. Therefore thiskind of uncertainty makes it difficult to make reasonable assumptions about future.7.6) Legal factors  Rules and regulationsRules and regulations also have to be considered before implementing a project which iscontrolled under government bodies. While implementing the system stake holders shouldfollow necessary guidelines that are designed to ensure more reliable and efficient operations.  Financial forcesIncreasing finance and investment to rural areas is a vital part of addressing food security andpoverty reduction. Rural finance encompasses the range of financial services offered and usedin rural areas by people of all income levels. It includes agricultural finance, which isdedicated to financing agricultural related activities such as input supply, production,distribution, wholesale, processing and marketing. Agricultural value chain finance takesaccount of those inter-linked processes from farm to consumer and uses them and them toincrease efficiency and lower risk in lending. Furthermore microfinance provides financialservices for poor and low income people by offering smaller loans and savings services,while accepting a wider variety of assets as collateral (FAO, 2012).Virtual Dedicated Economic Center | Page 22 of 31
  24. 24. 8) Sustainability of the proposed e-business solution, (VDECs)1) Some surveys clustered that the mobile applications can be used for the information flowof agricultural value chain (Syngenta Foundation, 2011).ICT’s power is in collection, processing and distribution of information. Each stakeholderinvolved in the agricultural value chain has different functions, interests and informationflows 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)Virtual Dedicated Economic Center | Page 23 of 31
  25. 25. According to Syngenta Foundation (2011) mobile projects in agricultural extension can beclassified in to two broad categories. I. mLearningAs Syngenta Foundation (2011) expresses this type of learning method can be used onfarming 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 sendqueries to a database. More interactive forms also offer possibilities for exchangingexperiences among farmers. II. mFarmingIndividual decision-support systems and services based on localized contextual informationcan be introduced into the agricultural context. mFarming requires remote sensinginstruments and GIS. It can also involve advice systems such as remote diagnosis of diseasesby experts.2) Market information and interaction facilities.An information system can be implemented to inform farmers about prices of different inputsand agricultural commodities in different trading locations. The use of mobile technology canbe 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.Virtual Dedicated Economic Center | Page 24 of 31
  26. 26. 4) Partnerships among reputed agro based companies such as CIC, Browns, Lankem andHeyleys.This system can be further enhanced with collaboration among reputed agro based companiesin 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 inorder to supply agro products for reasonable prices. And also government can obtain somepercentage from their profit under considerable policies. This will help both farmers andgovernment in order to accomplish their planned goals.Virtual Dedicated Economic Center | Page 25 of 31
  27. 27. 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 AugVirtual Dedicated Economic Center | Page 26 of 31
  28. 28. 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].Virtual Dedicated Economic Center | Page 27 of 31
  29. 29. 10) AppendicesAppendix A: Field SurveyIntroductionA field survey was carried out in our project. This was carried out to satisfy our primary datarequirements.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.SampleThe sample population was a set of farmers who are highly involved with the vegetableproduction in the dry zone. Survey was done in several villages belongs to Rambe,Madahapola agrarian centers in the Kurunegala district as a pilot survey.MethodologyA questionnaire is used as the surveying methodology. The questionnaires were presented tothe farmers and given answers were recorded by the students. Around seventeen farmers wereinterviewed 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.Virtual Dedicated Economic Center | Page 28 of 31
  30. 30. Appendix B: Questionnaire ක ොෂඹ වි඾්ල විදයා඼යය ඳරිගණ අධ්යයනායතනය - කතොරතුරු රැව්කිරීකේ ඳත විද්යුත් කලෂ඲ තාක්඿ණ අධ්යනයනම :…………………………………………………………………………………………………………………………………………………………………………..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 ෝගලගා රන්කන්ද? එකවේනේ ඒ කමොනලාද?…………………………………………………………………………………………………………………………………………………………………………......................Virtual Dedicated Economic Center | Page 29 of 31
  31. 31. අව්ලනු විකිණීමට ශාවිත රන කලෂදඳ඼ කුමක්ද?…………………………………………………………………………………………………………………….වාමානයකයන් එක් ේරලාශන ලාරය දී අව්ලනු විකිණීම ව඲ශා රැකගන යෑමට දැරිය යුතු ප්‍රලාශනකුලිය ……………………………………………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 නේඑම කශේතු වශ අව්ලනු ප්‍රමාණය ආවන්න ල඾කයන්.ක ෝගය අව්ලනු ේරමාණය කශේතු (ආවන්න ල඾කයන් කික඼ෝ)ඔ කේ අව්ලැන්න කුමන කශෝ කශේතුලක් මත කල඼දඳ඼ තු඼දී ඉලත දැමීමට සිදුවිණිද? එකවේ නේ එමකශේතු වශ අව්ලනු ේරමාණය ආවන්න ල඾කයන්.ක ෝගය අව්ලනු ේරමාණය කශේතු (ආවන්න ල඾කයන් කික඼ෝ)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 කශෝගාව්තු කගවීමක් සිදු ර තිකේද? එකවේ නේ ඒ කමොනලාද?Virtual Dedicated Economic Center | Page 30 of 31
  32. 32. …………………………………………………………………………………………………………………………………………………………………………......................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 ජංගමදුර තන තිකේ ද?…………………………………………………………………………………………………………………………………………………………………………......................ඔ ට ජංගම දුර ථන ාවිතකයන් ක ටි ඳණිවුඩ යැවීකේ ශැකියාල තිකේද? එකවේත් කනොමැති නේ ඔනිලකවේ 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?…………………………………………………………………………………………………………………………………………………………………………......................Virtual Dedicated Economic Center | Page 31 of 31

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