Blockchain, enabling farmers to trade in trust

AGRF 2020

September 4, 2019

Blockchain technology is a game changer. It is transforming agriculture by enabling smallholder farmers in Africa to improve their production and enhance their trade through a platform of trust.

Blockchain is a decentralised, digital ledger which works through a series of digitally connected records where information can be shared openly and publicly verified through a cluster of computers. 

Blockchains disintermediate transactions in agricultural supply chains as distributed ledger technologies (DKTs) and smart contracts to provide similar outcomes for trade finance, and agricultural financial services such as payment services, agriculture insurance, credit and derivatives.

The decentralised nature of blockchain means that information is not stored in one place but on many databases and is signed and time stamped. Blockchain technology can be applied to facilitate clusters, food security, traceability, real estate, financial production, supply chains, insurance, better infrastructure and transactions. 

In agriculture, block chains have possible uses in modernizing farm management software, optimizing agriculture technology Internet of Things (IoT). Furthermore, they can enable mobile remittance for smallholder farmers, greater accountability for multinationals, enhance agriculture supply chains, improve overseeing farm inventory and agricultural subsidies oversight, can ensure fair pricing and incentivise sustainable practices.

While blockchain is still a new technology across Africa, it is transforming the way farmers produce food and earn income from selling to effective markets. However, there are prerequisites to enabling the use of block chains such as the use of smart phones, energy and internet connectivity.  In addition, skills, mistrust and relevance are needed, says Henk van Cann, co-founder, blockchain Workspace.

“Mistrust is a good thing because our platform of trust which a truly innovative blockchain is, will solve to eliminate mistrust so we need mistrust. We will grow digital in the coming 20 years without blockchain, so we will use digital flow to work together and trust each other and if we don’t that is the moment blockchain comes in.”

Dorothy Rambim, Head of Department Computer Science at the Masinde Muliro University of Science and Technology in Kenya says blockchain is an idea whose time has come because it works and can boost the agriculture value chain.

Her department have developed and tested a prototype application to help smallholder dairy farmers in Kenya to securely sell their milk at a profit to secure markets where they can trace their deliveries, monitor the quality and quantity of their milk. 

In Ghana, Emmanuel Noah, CEO of BenBen, has developed a system to manage land tenure and transactions in Uganda. The system based on blockchain gathers data on land and has allowed the derisking of land transactions in Uganda, most of which is under customary and statutory ownership. 

In Nigeria and Kenya, Cellullant, provides a platform, Agrikore which allows secure instant payments across platforms for service providers, aggregators and farmers. 

While Nurvitria Kristofikova, co-lead of UX design, developed a platform to help cocoa farmers improve the delivery of high quality cocoa through improved record keeping and data collection from production, processing and sale of their cocoa beans.

In Uganda, Beer maker AB InBev, has developed a secure immutable distributor ledger that captures its financial transactions with farmers enabling them to create credit history with farmers which banks can verify to access them credit. Through the platform, farmers own, access and can monetise their data. The platform being used with 4000 farmers in Uganda and Zambia, works on a basic mobile phone and enables farmers to have an electronic record of their purchases, they can see how much they sold to the beer company, of what quality and volumes.

Africa is still at infancy in terms of blockchain use but it is real and working for the agriculture sector and there is need to improve digital infrastructure and regulation issues to take advantage of this technology, said Ken Lohento, Program Coordinator, ICT4Ag at the CTA.