Blockchain traceability provides farmers with a competitive advantage

The global food and agriculture industry is a trillion-dollar industry and is growing exponentially.According to the findings of the World Bank, only agricultural Take up The United States accounted for 4% of global gross domestic product (GDP) in 2018. The report further pointed out that agriculture in developing countries may account for more than 25% of GDP.

At the same time, it is important to point out that large corporate farms play a leading role in agriculture.For example, research by the United States Department of Agriculture (USDA) shows that major farms Take up In 2015, it accounted for 89% of US food production.

This still seems to be the case, because the main agricultural market is still dominated by very few companies.This becomes more obvious because the U.S. Department of Agriculture recently announced plans investment US$500 million to help ensure that the U.S. agricultural market is fairer and more accessible to smallholder farmers and ranchers.

Although government funding can help a lot, farmers around the world are also starting to adoption Smarter agricultural technologies-such as blockchain and data analysis-to ensure that the growing demand for agriculture is met. At the same time, these technologies have allowed smallholder farmers to obtain many benefits that were previously unavailable.

Farmers enter the global market

Max Makuvise, president and co-founder of E-Livestock Global, is a social enterprise that has developed a blockchain-based cattle tracking application for farmers in Zimbabwe-telling Cointelegraph that Africa accounts for 20% of the global cattle herd, but the region only It accounts for 3% of the world’s beef consumption.

According to Makuvise, it is difficult for farmers in countries such as Zimbabwe to enter global value chains due to challenges in visibility, ownership and trust. After the outbreak of tick-borne diseases in 2018, these problems became more serious. Cause 50,000 cattle died in Africa.

In recent years, Zimbabwe has been unable to export beef to lucrative markets due to the lack of a reliable traceability system. To solve this problem, Makuvise hopes that a blockchain-based solution that aims to bring visibility and proof of ownership to the African cattle market may be the solution: “Blockchain provides trust and verification, which can help farmers enter the world. market.”

powered by MasterCard’s blockchain-based provenance solution, The E-Livestock Global app works by providing end-to-end visibility into the cattle supply chain. To put this in perspective, Makuvise explained that thousands of cattle in Zimbabwe are regularly “soaked” to prevent ticks and parasites. However, it is in this process that the ownership of cattle becomes challenging. “Approximately 2,000 cattle will pass through this dip tank, all of which can be owned by 500 or more herders,” Makuvise said.

Kamran Shahin, Vice President of Blockchain Product Development and Innovation at Mastercard MEA, told Cointelegraph that the E-Livestock Global solution addresses this challenge by allowing commercial farmers and impregnators to mark the head of each cow with ultra-high radio frequency identification (RFID ) The label is used to register dairy cows and their owners in accordance with the regulations of the Ministry of Agriculture of Zimbabwe. Shahin added:

“Every time an animal is immersed, vaccinated or treated, the tag will record the event in the traceability system. Using Mastercard’s source solution, E-Livestock Global records these events to keep each animal’s history safe and secure. Tamper proof.”

Shahin said that the whole process provided valuable information for farmers and beef buyers. “For farmers, it provides irrefutable records that can prove ownership, support sales and exports, and allow them to obtain loans and use their cattle as collateral.” On the other hand, Shahin explained that this enables buyers Able to effectively manage their operations and guarantee product quality to customers.

More importantly, thanks to the visibility captured and recorded on the blockchain, farmers who join the E-Livestock Global system can now enter the global market. Makuvise elaborated: “In Africa, we did not have any traceability system before, so we could not export beef.” He added, therefore, “animals can be slaughtered and exported, and farmers can earn high prices to buy beef.” Their beef. “

In addition to cattle farmers in Africa, coffee and cocoa farmers in Honduras are also using blockchain traceability to enter new markets. Heifer International, a global non-profit organization that aims to eradicate world hunger and poverty through sustainable agriculture, is using IBM Food Trust (a network powered by IBM’s blockchain technology) to enable coffee and cocoa growers in Honduras Supply chain visibility.

International Heifer survey results show that small-scale coffee farmers operating The average loss is between 46% and 59%, and farmers earn less than 1% from selling a cup of coffee in a coffee shop. Heifer International Financial Innovation Vice President Jesús Pizarro told Cointelegraph that Heifer specifically uses blockchain to manage the value chain of smallholder farmers because it solves the traceability problem:

“The issue of traceability has always been a challenge. We believe that providing end-to-end transparency in the food supply chain can solve many social problems, starting with providing visibility to smallholders.”

Therefore, IBM’s Food Trust platform can track coffee beans from small farms to coffee shops. IBM Blockchain executive Kurt Wedgwood told Cointelegraph that this particular process started with Heifer uploading information about nurse plants delivered to farmers to the IBM blockchain network. After the harvest, Wedgwood pointed out that farmers would label the coffee beans and ship them to Copranil processors in Honduras, a coffee cooperative.

It then records other data about the coffee beans on the blockchain, including how the coffee beans are cleaned, dried and roasted, and whether they meet the requirements of fair trade, organic or other specifications. Finally, this information is shared with corporate buyers, who can also access data about coffee beans to understand prices.

Although the process sounds simple, the most important element to understand is how it opens global market access for smallholder farmers. Wedgwood said:

“By using blockchain, we have established a connection between farmers, producers and consumers, while enabling farmers to belong to a larger market. Ultimately, this will allow consumers to have more variety and better choices when choosing coffee. Experience. We now have the ability to connect all these people on a large scale, which allows producers to charge more for this and can bring higher profits to smallholders.”

It all boils down to visibility

In general, farmers who use blockchain can realize a major benefit, which has been an ongoing challenge facing the food industry-supply chain visibility. Once visibility is established, farmers can enter the global market, create greater profits, and even gain benefits such as financial inclusion.

For example, Makuvise pointed out that the financial inclusion of farmers in many African countries has been challenging because these people cannot borrow money without proof of mortgage. E-Livestock Global’s solution attempts to solve this problem by providing proof of ownership for dairy cows, allowing farmers to use their cows as collateral to obtain loans.

In addition, buyers and consumers also benefit from food visibility because it generates trust. Keith Agoada, the co-founder and CEO of Producers Market, a digital platform dedicated to the economic and social well-being of farmers, told Cointelegraph that people want to know where their products come from, and its impact on the environment and communities. Its production:

“For farmers and producers who manage their operations in the’right way,’ blockchain can be part of the trust-building process, distinguishing themselves in the market by connecting with brands and consumers who have these values.”

A report from the Blockchain Research Institute entitled “Agriculture on Blockchain” More Explanation “To date, food safety traceability is the most widely adopted application of blockchain in agriculture.” Although this may be the case, the challenges that hinder the growth and adoption of these solutions remain.

For example, Pizarro mentioned the need for government support in Honduras and other regions so that the company understands the importance of food supply chain visibility to consumers: “Technology is available, but I don’t think the status quo will change for this change without the government’s promotion. .”

Although this may be the case in Central America, Makuvise shared that African governments are excited about blockchain solutions due to the data generated. According to Makuvise, the government that has spoken to E-Livestock Global is happy to have access to data showing how many cows are in each source, which can help create better planning, and this is usually done through guesswork. Makuvise further pointed out that in this case, sensitive data will never be shared, but will provide relevant data that can help city planning.

On the other hand, Makuvise explained that the real challenge of adopting blockchain solutions to improve supply chain visibility in Africa is universal acceptance: “The adoption of blockchain-based solutions in Africa may take longer because people are visual And hope to see that the benefits are technology first. Once the benefits become obvious, more people will join.”