Traceability is the important aspect which is capable of providing help for small-scale farmers achieve huge profit, but is Blockchain solutions enough to catch on in developing countries?
Traceability is the important aspect which is capable of providing help for small-scale farmers achieve huge profit, but is Blockchain solutions enough to catch on in developing countries? The global food and agriculture industry is a trillion-dollar sector which is growing on another level. Based on the findings from the World Bank, agriculture single handedly is considered for 4% of global domestic product, or GDP, of the United States in 2018. The report also states that agriculture could stand for more than 25% of GDP in developing countries.
However, its crucial to come to the understanding that large corporate farms play a dominant role in the agriculture industry. For example, research from the United States Department of Agriculture (USDA) describes those major farms accounted for 89% of food production in the U.S in 2015. This still seems to be an important case as main agricultural markets remain at top by very few companies. This has become even more obvious as the USDA recently declared their plan to invest $500 million to help ensure that U.S agricultural markets are fairer and more accessible to small farmers and ranchers.
Even though the government funding could evidently help farmers around the globe who are also starting to adopt smarter agriculture technologies such as blockchain and data analytics to make sure that the growing agricultural demands are met. During the same time, these technologies are helping small-scale farmers to obtain a number of benefits that were not previously possible. Max Makuvise, president and co-founder of E-Livestock Global which is a social enterprise that has created a blockchain-based cattle tracing app for farmers in Zimbabwe said that Africa has accounts for 20% of the global cattle population, whereas the region only contributes 3% of the world’s beef consumption.
According to Makuvise, farmers in countries like Zimbabwe have a tough time getting into global value chains due to challenges involving visibility, ownership and trust. These issues got complicated after the eruption of a tick-borne disease in 2018 that resulted in the death of 50,000 cattle in Africa. The shortage of trustable traceability system has now ended up Zimbabwe being unable to export beef to profitable markets in recent years. To solve this crisis Makuvise believes that the blockchain-based solution created to bring visibility and proof-of-ownership to Africa’s cattle market could maybe be the solution. “Blockchain provides trust and verification that can help bring farmers to global markets.”
Powered by Mastercard’s blockchain-based provenance solution, the E-Livestock Global app works by giving an end-to-end visibility to the cattle supply chain. To give this importance and attention, Makuvise said that thousands of cattle in Zimbabwe are constantly “Dipped” to prevent ticks and parasites. It is during this process when cattle ownership becomes even more demanding. “About 2,000 cattle will go through this dip tank, all which can be owned by 500 or more cattlemen,” said Makuvise. Kamram Shahin, Vice president of Blockchain product development and innovation at Mastercard MEA, suggested that the E-Livestock Global solution can be solved by letting commercial farmers and immersed officers to tag each of the cow’s head with an ultra-high radio-frequency identification (RFID) tag, as instructed by the Ministry of Agriculture of Zimbabwe, to register the cow and its owner, “Each time the animal gets dipped, vaccinated, or receives medical treatment, the tag records the event onto the traceability system. Leveraging Mastercard’s Provenance solution, E-Livestock Global records these events to maintain a secure and tamper-proof trail of each animal’s history.”
Also, cattle farmers in Africa, coffee and cocoa farmers in Honduras are purchasing blockchain traceability to gain access to latest markets. Heifer international is an international, a global nonprofit that focuses to end world hunger and poverty through sustainable farming. heifer international show that small-scale coffee farmers can work at an average between a 46% to a 59% loss, with farmers earning less than 1% from the sale of a cup of coffee at a coffee shop. “Problems of traceability have 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 small-scale farmers.” IBMS’s food trust platform draws coffee beans from small farms all the way to coffee shops. Extra details about the beans are then written down on to the Blockchain, also how the beans were cleaned, dried and roasted and if they are set for fair trade, organic or other specifications. Also, this data is shared with corporate buyers who can get the data about the beans to learn more about the prices. “By leveraging blockchain, we establish a connection while enabling the farmer to belong to a bigger market. Ultimately, this exposes consumer to more variety and a better experience in their coffee selection. We now have the ability to connect all these people at scale, which could allow producers to charge more as a result, and could lead to higher profits for small-scale farmer.”