Vol 18: How Blockchain Will Transform Africa's Agricultural Sector.
This is the 5th post in a blog series on Blockchain Transforming Africa. So for today, I will be explaining how this technology can transform our AGRICULTURAL SECTOR.
Blockchain is now becoming synonymous with trust-as-a-service system. The annual global output of agriculture is close to $5 trillion which is approximately 7% of the total production. Almost 40% of the global workforce is involved in agriculture related activity and smallholder farmers in Africa and Asia provide up to 80% of the world food supply.
The Africa food supply chain is a complex system with multiple intermediaries. From the Farm to the Processing plants to Warehouse/Distributors to Retailers and finally to Consumers who find it hard to track food origination and reduce trust on the food they buy. Farmers reliance on GMOs, modified seeds, fertilizers and pesticides are creating huge risk and health impact for people.
genetically modified organism
(GMOs) is an organism whose DNA has been modified in the laboratory in order to favour the expression of desired physiological traits or the production of desired biological products. These altered foods
can have harmful effects on the human body
. It is believed that consumption of these genetically engineered foods can cause the development of diseases which are immune to antibiotics.
This is why it has been found that most consumers are always checking the labelling and ensuring any potential fraud and adulteration and sometimes take measures against it. Manufacturers and Suppliers need to increase transparency as well as to identify and isolate contaminated and altered food and farm products in the supply chain because consumers want more accountability and a higher level of corporations from food companies. If all these combined processes are done it will make tracking of farm produce from its origin safer and products more reliable and blockchain helps with that.
TRACEABILITY & TRANSPARENCY
Farmers in Africa often have to wait weeks or months to receive payments before selling their products, this places economic strain on an already poor occupation rural areas. In addition, most rural farmers lack the ability to conduct due diligence on their buyers which allows buyers further down the supply chain to compete on payments and offer lower prices which undervalues the farmer’s output and lower their income.
Implementing peer-to-peer transactions would allow instant payment between farmer, buyer, distributor and seller without the need for intermediaries like banks or a middle man in the agricultural sector. It will also allow a supply chain food supply to be traceable, incorruptible and easily trail money back to the source, the farmer. This traceability allows consumers and businesses the ability to verify food certification, ensuring the quality for consumers.
Due to the transparency and distribution of data on the blockchain, market information is accessible to farmers at any time, empowering them with the know-how, to get a fair price for their labour. Smart contracts or conditional transactions also allow powerful micro-financing support for small scale agricultural entrepreneurs in Africa
This antiquated industry of maximizing yields, minimizing information and the only information that’s been transferred to the supply chain sector is cost prices because it dictates everything, that is what people buy and there is not a lot of transfer of information on a product. If farms produce details like; sourcing information, cold chain information, temperature data, chemical details, all these could give a more better picture of the food system and identify where the inefficiencies are.
Blockchain can serve as a recording ledger for information capture and storing data. General information on commodity prices and fluctuations and data about market demands and global trends will enable fairer pricing and risk mitigation
Most of the records in this field are paper-based in their record-keeping, now with blockchain, it enables having all that data in one system and make them available to clients, farmers can’t hide anything, its all there, it creates honesty in the stories they tell to their clients.
More from MAP's Newsletter:
Reducing food waste is challenging, estimates place the volume globally at over one billion tons of food going into landfills each year. The world is at such a place where in some parts of the world people are enjoying all sorts of amenities available to them whereas, in places like Africa, they cannot afford even the basic necessities of life. This is also being translated to the availability of food. The basic requirement of food is thought to be equally distributed amongst all the peoples of the world at each given time. However, recent developments relating to alarming food waste has changed the equation. Coupled with environmental challenges and climate change.
Storing and transmitting real-time data about crops and livestock with blockchain helps manage food produce. Furthermore, IoT linked technologies such as sensors and machine learning provide greater insight into conditions that are conducive for high yields, smooth operation and risk mitigation, this combination of Internet of Things (IoT), blockchain and predictive analytics allows farmers to grow only what shoppers want to buy, thus reducing food waste.
With a digital food system created in Africa for Africans, network participants can now better track the quantity of food wasted and of food rescued. Blockchain technology stores digitized records in a decentralized and immutable manner, promoting trust and transparency which in turn helps reduce food waste. Also, selective data sharing enables all in the food system to adopt consistent standards, policies and procedures which leads to greater visibility into food waste. Food producers, distributors and retailers can help identify opportunities to reduce food waste along the supply chain.
Some Blockchain Startups Transforming The Agricultural Industry:
AgriChain: A blockchain company focusing on enabling peer-to-peer agricultural transactions and processing while cutting out the middlemen.
AgriDigital: A blockchain-based and integrated commodity management solution for the global grains industry. The platform helps to process complex agricultural transactions through smart contracts.
AgriLedger: A UK social enterprise project supporting farmers in tracing food origins, getting easier access to financing, and storing transactions data.
Demeter: A central hub to rent and farm micro fields anywhere in the world with no middlemen, complexity or the overhead of a big organization.
Etherisc: A blockchain startup offering crop insurance to farmers via its decentralized insurance applications.
Ripe: By designing a transparent digital food supply chain, the startup harnesses quality food data to create the Blockchain of Food – mapping the food journey.
TE-FOOD: Applies identification tools to livestock, transports, and fresh food packages to follow the items throughout the whole supply chain.
The projected role for Blockchain is significant, from food source to tracking and trading. Linking all these together will add value to the agricultural products because they can be traced by the recipient to prove authenticity and add greater value to the products.
Blockchain is a growing technology. Even though it has just begun to revolutionize many industries, there is still a long way to go.
However, it’s becoming increasingly clear that there are opportunities for blockchain technology in the agriculture industry. The global agriculture industry is now worth over 2.4 trillion dollars and has over one billion people involved worldwide. Now, more than ever, there is an opportunity for innovation.
Until next week, Merry Christmas.
Enjoy the weekend.