9 ways blockchain can help smallholder farmers 08/11/2019

How can we make blockchain technology work in the agri-food sector, with entrepreneurs and smallholder farmers in emerging countries benefiting from it? Fairfood, The Fork and CTA have joined hands to explore the opportunities and challenges. In a series of blogs, info sheets and webinars we´ll dive into this topic.

When I went to work this morning, I wasn’t afraid of being robbed on the streets. I arrived at the office and wasn’t at all afraid of being mistreated by my boss or colleagues. The thought of not being paid at the end of the month also didn’t cross my mind. Whenever I want to do or learn something, I know it’s only one Google search away from me. I can basically go, do, learn and become wherever and whatever I want. It is a fact I’m hardly ever aware of, because it simply seems normal to me.

 

I went to work this morning and wasn’t afraid of being harassed. I arrived at the office, I wasn’t worried for getting bullied by anybody. The thought of not being paid a fair wage didn’t even cross my mind. It’s only one Google search away to learn and improve my skills. I can basically go, do, learn and become whatever I want. This seems so normal to me. I have to take an effort, to remind me, it is not. Especially not for 500 million farmers that produce 80% of our food, and their households, more than 2 billion people.

Financial exclusion

Many romanticise farming: living in the countryside, connected with nature… The sad reality however is that most farmers don’t earn enough to enjoy a proper meal.

A lot of this has to do with their remoteness, and a poor political and financial structure in their country. This results in financial exclusion from the global economy. Most of these farmers live in rural areas and belong to a demographic that is the least likely to have access to an official proof of identity. Without official records, it is very difficult for them to proof their ownership or to build up a financial track record. This, in turn, makes it difficult for them to get access to loans or insurances, which makes them the most vulnerable when socio-economic or environmental disasters occur. Their remoteness and lack of official documents puts them in a weak negotiation position, leaving room for structural underpayment and bad working conditions. It allows for human rights violations like child labour to persevere even in today’s world.

Where only 6 percent of farmers has access to a bank account, over 36 percent of people in sub-Saharan Africa has access to smartphones.

Access to internet

Luckily, some interesting developments have been signaled. Where only 6 percent of farmers has access to a bank account, over 36 percent of people in sub-Saharan Africa has access to smartphones. It is expected that in the next 7 years, over 1.4 billion new users will get access to the internet through smartphones, bringing the number up to 60 percent of mobile phone ownership in sub-Saharan Africa by 2025. Access to the internet brings a world of opportunities to the rural poor. It doesn’t only allow them to stay up to date and become more productive like us; with new technologies such as blockchain and Internet of Things (IoT) devices, access to the internet can empower farmers in many different ways.

With blockchain technology and IoT sensors, information can become measurable and reliable at a significantly lower cost. This allows smallholders to build up a financial identity, gain access to financial services, increase their yield and strengthen their negotiation position within their supply chain. Potentially, we could have everyone around the world participate in the global economy. So, how can we make this work?

We identified nine ways in which new technologies such as blockchain can empower smallholder farmers:

  1. Ownership of (self-sovereign) digital identity
  2. Proving brand promises and ownership claims
  3. Access to affordable loans
  4. Access to affordable insurance
  5. Sending and receiving payments
  6. Avoiding middleman corruption
  7. Increasing yield and productivity
  8. Strengthening negotiation position
  9. Capitalising on data

The coming months, we will dive into these topics, inviting innovators, thinkers and experts to share with us how they envision this. Of course, we also realise that digitalisation and blockchain will only work if they actually add value for the farmers using them. It isn’t always easy to connect rural farmers to new digital systems, and there are a lot of learnings to be gained before attempting to do so. For this reason, we partnered up with CTA, Technical Centre for Agricultural and Rural Co-operation.

Join our next webinar on the 16th of January 5PM CET where we will talk with Puvan J Selvanathan from bluenumber and Marieke de Ruyter de Wildt from the StrikeTwo summit on how blockchain can help farmers build up a self-sovereign digital ID Read more about this webinar. To join the webinar, sign up here!

This is an initiative by the Blockchain for Agri-food Community, a result of a partnership between Fairfood and CTA (Technical Centre for Agricultural and Rural Co-operation). The community exists of different actors in the agri-food sector who share blockchain learnings and work together towards a better food system. The community and webinars are free and open for anyone to access. Read more about the community.

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This initiative is made possible with the financial assistance of CTA. The views expressed above can in no way be taken to reflect the official opinion of CTA.

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We will keep you posted about the before mentioned blog posts, upcoming webinar dates, and food tech events and developments.