Blockchain agriculture is one of the compelling use cases that simplifies the process of growing and supplying food. The agriculture supply chain can provide all involved parties with a single source of truth.
But the challenge for the agriculture sector lies in tracking and paying for the delivery of foods. Nowadays, the process depends on a third-party for coordinating the goods delivery.
The sellers usually have an agent who ensures that the goods are delivered safely and buyers have an agent to recommend payment and audit the delivery.
The involvements of multiple agents add high costs to the system and make the process time-consuming. With blockchain, the whole process can be simplified to a single distributed ledger.
Experts say commodity buyers can directly interact with the supplier, speeding up the process and reducing the time taken to settle a payment. Also, companies can save on additional agent fees and farmers can receive a larger share of sales directly with a blockchain-based solution.
With the features like traceability and auditability, farmers can directly sell crops or food to the restaurant or individuals without intermediaries.
The agriculture industry needs to do more work to maintain and build consumer trust when it comes to the food quality check.
A blockchain based agriculture solution holds a lot of promise for the agribusiness industry with its ability to bring transparency in the system.
Crop and food production
With the help of smart farming, Internet of Thingd (IoT) sensors could fetch important information such as the temperature of the soil, water level, fertiliser details and more and send it to the blockchain.
Based on the data saved in blockchain, smart contracts could trigger and execute the specific actions. It will help in enhancing the quality of the farming process and produced crops.
Speaking in an interview with Prosper Magazine, Mr Theunis Coetzee, Agric Manager EA AB Inbev, says to save farmers from making losses and enable them to have access to finance from the commercial banks or any other financial institutions that provided loans, Nile Breweries Ltd is enhancing economic opportunities for smallholder farmers within its supply chain through blockchain technology.
Mr Theunis says the programme is being implemented as a partnership between top brewer ABInbev, the parent company and BanQu, a non-cryptocurrency blockchain platform, with Barley farmers in Uganda and cassava farmers in Zambia being the pilot.
“Through this collaboration, we are providing farmers with access to digital payments and technology to further their economic opportunity to achieve our agriculture sustainability goal to have 100 per cent of our direct farmers skilled, connected and financially empowered by 2025,” he said.
Mr Theunis adds that the technology allows transparent real-time transactions with end traceability. Farmers’ data is recorded on spot and the farmer who owns this data can access it from anywhere. This therefore increases accountability and the same data of products and earnings enable farmers have better access to financial tools and partnership opportunities with financial services.”
Mr Theunis who was speaking Prosper on the sideline Africa Blockchain conference, says Blockchain allows farmers to get payment in real-time while cutting out the middlemen.
Mr Theunis says the farmers can access their payments through mobile money or banks using their SMS messages in their phones, which they present to the bank.
“The benefit of the Blockchain is affordability for the farmers because it is linked on their phones. With Blockcahin, I know where the transactions happen at what time. The other benefits are traceability and tractability of the farmers. We know where they live and their farmers,” he said.
Mr Theunis says the use of Blockchain reduces in a way because banks are not willing to lend to agriculturalists.
“With Blockchain, the farmers can now access bank loans and any other financial institutions that give loans since Blockchain enables them to become their clients. Women are the most beneficiaries of this system,” he said.
The programme that started as a pilot project in 2018 in Sebei sub-region in Uganda has recorded 349 transactions worth more than Shs880 million out 587 tonnes of barley from 316 the registered farmers. Nile Breweries Limited (NBL) says by the end of 2019, 4,000 barley farmers will be registered. It is projected that 8,000 tonnes of barley will be bought through blockchain.
Currently, NBL has 8,000 registered barley farmers but not all of them are in Blockchain system. Why? Some of them don’t have phones.
“We support our direct farmers to access cutting-edge innovations through digital tools like Blockchain because it is important for us that our farmers are getting better at their activity and are also making money,” says Onapito Ekomoloit, legal and corporate affairs director, NBL.
“The project enables us to show who the farmers are, as we have recorded and also prove that they are indeed making money,” he says.
Farmers are also excited by the new technology.
“I can now track my farming and know when I have better. This system has made barely a cash crop in this region. I’m happy that even if my phone gets lost, I still have recorded and the bank can give me credit or process my payments. My farming has also become more like a business since I have records of produce and sale,” says Mr Nelson Chebet, farmer leader, Kapchorwa.
Globally, Blockchain technologies are linked to the fourth industrial revolution.
Its uses and benefits are so immense across sectors of the economy, because Blockchain technology provides all users with efficient data protection, transparent and secures data exchange.
All information written in blockchain cannot be changed, and its storage is decentralised, making blockchain technology the best tool for encrypted information transfer.
As experience shows, the use of blockchain technologies can accelerate and simplify the decision-making process concerning funding of agricultural projects.
It will have a positive impact on competitive ability and development of agriculture.
The president of Uganda National Farmers’ Federation, Dr Dick Nuwamanya, says the Fourth Industrial Revolution will mobilise, organise and coordinate small holder farmers who are about 8.9 million in total.