Founder of K-Farm, Kit Chan thinks that there are more to contract farming that are often overlooked by eager farming agropreneurs. From his observation of the contract farming model, Kit Chan believes many wrongly assume that growing produce automatically leads to profit. “The truth is, many farmers do not understand that profit comes from income, and income comes from not only the price, but also the quantity of produce that they can supply. Thus, profit is not necessarily derived from price alone. When farmers fail to understand this, many would hop from one buyer or another in the search of an extra 10 cent of revenue. This then leads to an unsteady relationship with buyers whereby trust cannot be developed in the longer term,” says Kit Chan.

When Oii Boon Sheng started Web Bytes Sdn Bhd, a cloud-based point-of-sale (POS) service provider in 2007, it was not common for businesses to have internet access. "It was a luxury. Some of our customers used on einternet account for a couple of outlets. When we entered the market, we had to make our solution offline and build a client/server-besed model," says Ooi. He co-founded the company in Penang after joining the Microsoft Imagine Cup, a technology competition for students.

The digital economy of Southeast Asia continued to be resilient in 2020 despite the Covid-19 pandemic ravaging most of the region's largest economies. Led by Indonesia and Vietnam, the total gross merchandise value of Southeast Asia's digital economy reached US$100 billion last year. Despite that, funding was lower as a result of the pandemic. This lack of funding led to fewer "unicorns" emerging in the region, with only one company getting on the unicorn list.

MGROW is a contract farmer that supplies its fresh produce to the Federal Agricultural Marketing Authority (FAMA) and to private companies mainly in the northern region of the country. In the international front, it has also brokered exporting deals to China, a promising market for the tropical fruit. Ting shares, “The market here has been very welcoming. We are excited to get an overwhelming enquiry from distributors and exporters, to the point that we had to say ‘no’ to some! It is a good problem and has boosted our confidence in the product. But we recognise the high-demand and we plan to expand our farm soon so we can venture into more contract opportunities.” For MGROW, contract farming is a strategic component of the business growth. “Contract farming provides a set target that allows us to make precise decisions on how many acres of pineapples we are growing, how many the farm will produce, and when it will be harvested. Once the pineapples are planted, the only focus is to ensure we meet the deliverables,” says Ting.

Contract farmers reap advantages that allow for a sustainable income and business growth. For instance, Treegrow Orchids engage contract farmers in Cameron Highlands via a standing order. The pre-agreed price ensures that the sell-price will not fluctuate, thus enabling sustainable, stable income for the farmers. Meanwhile in peak seasons, exporters like Treegrow Orchids may also offer to purchase slightly more than the agreed quantity with a competitive price. At the same time, farmers are also keen to improve farming practices to ensure the quality of the crop and attract more business with existing and new exporters. In the case of Treegrow Orchids, farmers also benefit from the transfer of technology and best practices from the company. “Whenever we notice that the crop quality is not up to standards, we take the initiative to visit the farm to identify problems with the farmers and provide free consultation to help tackle any issues,” said Seng Yee.