Agriculture is the backbone of many African countries, in sub-Saharan Africa, it is the primary source of both food and income with 60% of the region’s jobs coming from agriculture. These jobs come from the supplier of farming inputs to the farmers who grow the food, to the people who dealer to the retailers who sell the produce to the consumer.
Blockchain the technology that powers popular cryptocurrencies like bitcoin have great potential in helping the agriculture industry grow using its biggest assets of transparency and integrity it will make supply chains more efficient and reduce theft among other things. We will look at exactly how blockchain can be integrated into agriculture. By giving examples we hope to clearly explain how this complicated technology can be used.
In this article we will be focused on the players in the agriculture supply chain as agriculture itself has many sections, from dairy farming to horticulture but all these types of agriculture have supply chains which we feel benefit the most from the blockchain.
Let's have a look at the possible implementations of blockchain in agriculture.
Transparency
This is the open, honest and effective way of communicating with customers about how the food they consume is produced. These days’ customers want healthy and ethical produce. If the food they are eating has unhealthy chemicals or the meat they are consuming is free-range.
With blockchain, producers can create a story of how the produce is produced and in return, the value of their products increases as each stage of production is documented and customers have a quick and trustworthy was to check if the food they are buying meets their required expectations.
An added benefit of transparency is the ability to trace, since each stage of production is documented if any problems were to come up for example maybe its discovered there are contaminated produce, we are able to trace where the contamination occurred, why it occurred and how much of the produce was affected. This will take a few minutes to check and confirm, saving the producer time, money and their public perception. Unlike now where you would recall the entire stoke which could take days if you are lucky, but most likely it will take weeks if not months to check all the stock.
Creation of a Marketplace
For decades farmers in Africa have been getting a bad deal as middlemen exploit them for their produce. These farmers don’t have direct links to the market that want their produce and hence have to rely on middlemen. The middlemen buy their produce at very low prices and sell it for high profits, creating a vicious cycle where there is a lot of money to be made in agriculture, it's just the wrong people profiting off it.
A marketplace platform based on the blockchain can go a long way in preventing this as it will link the farmers directly with the buyers. The middle man will be cut out, which is a win situation for both parties. The farmers will get all the profits, while the buys buy the produce at a low cost.
The buyers the farmer needs to impress is very concerned with food safety and with the blockchain providing the required documentation of the food’s supply chain, it will give the buyers confidence in their produce and a fair price can be reached.
Finance
80% of farmers in Sub-Saharan Africa are small scale farmers, and this brings a lot of problems when it comes to raising money to grow, expand and maintain their crops. They also face problems in receiving payment for their produce on time. With blockchain, it is possible for them to fundraise on their own without relying on microfinance institutions whose interest rate are extremely high.
The impact blockchain can have is positive and we as Africans should be investing in this technology, it is a new and exciting means to raise the poor farmers out of poverty and bring much needed transparency in the sector to prevent them from being taken advantage of.
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