Hidden in the green: There are additional costs that determine the price of vegetables sold, including packaging, transportation, location and distribution. — Filepic/The Star
THE scorching heat didn’t stop farmer Ku Muhammad Azrul Ku Azhan from inspecting his chilli farm in Kuala Selangor. With fertigation technology (injecting fertiliser into irrigation systems), farming has become easier for him, yielding consistent crops and enough profit to cover costs.
But now there is a surge of heavy rain. MetMalaysia has forecast continuous rain, including thunderstorms and strong winds, in some states across the country in the next few months.
The weather has always been a bane for farmers, raising costs and disrupting output, and causing instability in prices of crops and fresh produce for consumers.
Experts say technology can help here too, especially in reducing secondary costs like marketing and delivery services. And one way it can do so is through e-commerce.
Ideally, using e-commerce to connect directly with consumers could lower costs and reduce vegetable prices.
Azrul says he knows that to boost his income, he must adopt e-commerce to reduce costs – especially middlemen costs.
“But in reality, there are many layers of costs I still have to navigate,” Azrul explains.
His experience reflects findings from the World Bank, which reports that while Malaysian farmers excel in precision agriculture, they’re less proficient in using financial technology or e-commerce to market their crops.
“Small-scale farmers, especially, struggle to adopt new technologies sustainably. They may also hesitate to change practices due to limited information on profitability,” says “Farming the Future: Harvesting Malaysia’s Agricultural Resilience Through Digital Technologies”, the World Bank’s 30th Malaysia Economic Monitor report.
Trimming with tech
The Federal Agriculture Marketing Authority (Fama) is a staunch proponent of reducing the market price of vegetables for consumers through e-commerce or direct sales.
Fama reports that vegetables and fruits have experienced price drops of between 5% and 30% under the ongoing “Jualan Terus Dari Ladang” (JTDL), or direct-from-farm sales, programme, even with unavoidable costs like packaging and transportation.
This initiative ensures that produce is fresh and priced lower than typical market rates.
“The programme is part of an effort to diversify the market for contract farmers.
“It offers vegetables and fruits at 5% to 30% below the usual market price while ensuring producers receive a fair rate, around 50% of the consumer price,” Fama said.
The agency said the programme is usually held at agro markets, Mafi (Agriculture and Food Security Ministry) Marts, and selected supermarkets, while supply is sourced from various farms nationwide.
According to Universiti Malaya senior lecturer Dr Purabi Mazumdar, connecting farmers directly with consumers through such platforms could lower costs, reduce food miles, and provide Malaysians with fresher produce at more affordable prices.
Purabi, who is attached to the Centre for Research in Biotechnology for Agriculture, believes this approach could improve food affordability across the country.
Reducing intermediaries is essential for significant cost savings, and integrating e-commerce could make this possible within the agricultural supply chain, Purabi explains.
“Currently, multiple intermediaries involved in transportation, packaging, and storage drive up prices with significant markups.
“Staple ingredients in Malaysian cuisine can be considerably more expensive by the time they reach consumers.”
Reports last year highlighted price increases in several vegetables, such as calamansi and eggplant, by RM1 to RM4 per kg.
“In Malaysia, vegetables like water spinach, red and green spinach, okra, French beans, calamansi, eggplant, and chilli are among the most heavily marked up due to intermediary costs,” she says.
Purabi: Reducing intermediaries is essential for cost savings, and integrating e-commerce could make this possible within the agricultural supply chain.
Purabi points to cost-saving platforms like AgroBazaar Online, which allows farmers to sell directly to consumers, bypassing middlemen: “Platforms like AgroBazaar Online enable farmers to sell directly, allowing them to retain more of the sale price while offering goods at lower prices to consumers.
“Consumers benefit from lower prices as savings from optimised logistics and resource management get passed down.”
She adds that, other than JTDL, digital payment systems such as e-wallets can also cut costs by “streamlining transactions and reducing cash handling costs”.
“Logistics services help farmers optimise delivery routes and minimising transportation expenses, ensuring quicker, cheaper delivery.”
Purabi also says that data analytics and Internet of Things (IoT) technology for crop monitoring can enable better planning and precise resource management, reducing waste and operational costs. Additional features like consumer feedback and purchasing trends can help farmers focus on high-return crops.
“These improvements can lead to lower prices for consumers, fresher produce, and increased profitability for farmers.
“Faster, more affordable delivery brings fresher produce to shelves, while data analytics and demand forecasting can help farmers plan more accurately, reducing waste and stabilising prices.
“IoT technology for crop monitoring enables precise resource management, driving down costs and providing consumers with quality produce at competitive prices,” she notes.
ALSO READ: Leveraging technology to empower farmers
Leafy but not lean
Federation of Vegetable Farmers’ Association deputy president Lau Weng Sow, however, remains sceptical about e-commerce’s impact on lowering vegetable prices.
Getting vegetables to market starts with one priority: ensuring the greens arrive fresh and unblemished. Farmers need someone to buy their produce quickly, package it, and transport it to market, he says.
“That adds extra costs – packaging must be done well, and the transport must be timely. Vegetables don’t last long and can spoil easily.”
Vegetables are usually sold to wholesalers, who purchase in bulk and sell at a slight profit, typically 10 to 20 sen per kg.
“Selling 1,000kg to wholesalers, packing it, and loading it onto a lorry travelling from Cameron Highlands to the Selayang market in Selangor illustrates some of these hidden costs before vegetables reach the consumer’s table.”
Lau also notes that some people wonder why vegetables are pricier in some villages far from the main markets.
“The added cost of transporting vegetables from the main market to rural areas drives up prices the further you are from urban centres. Or, if you transport the vegetables from the Selayang market to the Seremban market, the price can be higher at the latter.”
Lau emphasises that vegetable pricing is complex and not as simple as removing a few middlemen. He points out that supply and demand largely determine the base price of vegetables, which fluctuates based on seasonality and consumer demand.
“If supply exceeds demand, prices drop, and vice versa. No single entity controls the price; it’s based on supply and demand,” Lau says.
Another factor is the recent rationalisation of the diesel subsidy, Lau adds. While fuel for logistics vehicles remains subsidised, farms in remote areas rely on diesel generators for power, significantly adding to costs.
“Each generator uses over 200 litres of diesel, which is costly when unsubsidised. This can lead to increased production costs. For example, last year, the cost of growing 1kg of tomatoes was RM2.50; now, it’s RM2.70.”
Federation of Malaysian Consumers Association president Prof Datuk Dr Marimuthu Nadason also doubts the prospect of reduced vegetable prices, noting Malaysia’s reliance on imports. According to UN Comtrade (the UN’s trade statistics database) the total value of vegetable imports to Malaysia in 2023 was US$491.13mil (RM2.2bil).
“I don’t want to give false hope about reducing vegetable prices when we rely so heavily on imports,” Marimuthu says.
Marimuthu: He doubts the prospect of reduced vegetable prices, noting Malaysia’s reliance on imports. — ROHAIZAT MD DARUS/The Star
Grounding hope
Meanwhile, the World Bank’s report states that widespread adoption and scaling of digital agriculture technologies (DATs) could accelerate Malaysia’s journey to high-income nation status.
The report highlights that DATs could enhance productivity, marketing efficiency, export competitiveness, food security, climate resilience, and social equity.
“Smallholder farmers are particularly well-placed to benefit,” the report states, pointing to the potential of data platforms, precision agriculture, e-marketplaces, and other digital solutions facilitated by DATs.
The World Bank suggests three approaches for Malaysia to maximise the benefits of DATs:
> Increased financing for public goods to ensure successful implementation of DATs.
> Greater investment in the innovation ecosystem to support DAT development.
> Establishing clear strategies for data governance, privacy, security, and incentives.
Purabi believes it is not too late for Malaysia to adopt successful strategies from other countries. She suggests technology training programmes can help farmers navigate online marketplaces effectively.
She points to India’s e-NAM initiative, which provides farmers with digital marketing and e-trading training.
“India’s government also offers digital literacy training, enabling farmers to trade in a unified online marketplace, while Kenya’s Digital Green programme uses video training to promote marketing practices.
“Expanding similar programmes could empower Malaysia’s farmers in the digital economy, reaching broader markets with greater transparency and efficiency.”
Locally, Agrobank’s Digital Niaga Programme and the Malaysia Digital Economy Corporation’s e-Ladang project offer digital finance, IoT, and data analytics training to help farmers access digital marketplaces.
Purabi stresses that training can equip farmers with skills essential for navigating online marketplaces, managing inventory, setting prices, and engaging directly with consumers.
“Training includes using smartphones, basic financial literacy, and e-commerce navigation, opening new revenue channels, reducing middleman reliance, and improving profits.
“Farmers learn to create effective product listings, use secure payment systems, and leverage data insights to align crop production with demand.
“These skills enable farmers to control pricing and marketing, allowing direct consumer and retailer engagement focused on transparency and freshness.”
