9 ways blockchain can help smallholder farmers

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.

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 signalled. 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 like blockchain, access to the internet can empower farmers in many different ways.

Using blockchain technology, information can become transparent and reliable at a significantly lower cost. This allows smallholders to create a digital identity, gain access to financial services and build up the trust they need to do business internationally so they can finally participate and compete in a global economy.

In total we identified nine ways blockchain can empower (smallholder) farmers:

1. Build up a self-sovereign digital identity
2. Control and monetise their data
3. Get access to finance
4. Get access to insurance
5. Get access to international markets
6. Regain trust from consumers
7. Prove brand promises and ownership claims
8. Send and receive payments
9. Earn a living income

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.

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This article is made possible with the financial assistance of CTA (Technical Centre for Agricultural and Rural Co-operation). The views expressed above can in no way be taken to reflect the official opinion of CTA.