As demand grows for sustainable agricultural practices, the EU is striving to meet the necessary changes by looking towards improving the competitiveness of commodity chains through analyzing value chain implementations in agriculture.
The solutions they have suggested all involve optimization of current systems within the agricultural supply chains; linking producers to competitive markets and developing regional support systems such as farmer organisations. Their current goal to support, “farmers and their organisations, agricultural laborers, commodity suppliers as well as small and medium-sized enterprises (SME's)” to increase fair distribution practice.
While looking towards the existing market players is understandable and an unavoidable baseline, perhaps considering new developing companies that specialize in digitizing agricultural trade could be a compelling answer.
The EU has suggested that local SME’s, involved in the processing of agricultural goods, participate in encouraging agricultural production by offering producers financial support. Innovative companies like Avenews-GT directly address this issue by partnering with financial institutions that provide pre-export working capital, flexible export financing, guarantee of immediate payment upon shipment of the goods and more.
By working through the Avenews-GT platform, farmers’ needs are taken into account to provide smart and adaptive financial flexibility. As an online trading platform that directly connects between buyers and producers, Avenews-GT provides a solution to one of the EU’s major objectives of linking contractual relations between producers, buyers, and financial products.
An additional issue facing agricultural trade today is the middle ground in which contractual arrangements are facilitated. By digitizing the process, companies like Avenews-GT provide a transparent record and informational input supply. This middle-ground could become a solution towards handling the notorious hurdles of the agricultural production process. Exposure to price instability, natural disasters, diseases, conflicts, and uncertainty about access to resources and markets, often leaves both producers and buyers with a lack of management security.
Commercial buyers and agricultural investors seek security of supply and are less eager to provide working capital and producers are left in low bargaining positions, making sub-optimal production decisions out of lack of information. What follows is price volatility. While optimization and collaboration of existing market players may seem like the easier and familiar route, newer digital organisations may be the key.
Such companies can accomplish and centralize the EU’s ultimate objective; Improve farmers’ access to markets, increase smallholders’ bargaining power and give commercial buyers and agricultural investors transparency and security of supply, all in a digital platform at the click of a button.