This is the 2nd part of our series on the use of blockchain as a solution to Africa’s agriculture value chain challenges. FInd the first article here.
Cellulant’s Blockchain Network
Our blockchain network is not only about the exchange of crypto-assets among holders– that is just one of the capabilities of the network. Our network is about using the attributes of the network to solve specific problems in the real- world and creating economic wealth through the network.
We have developed a framework that anchors and represents all the activities in a real-world economy on a blockchain. Our initial focus is on the agriculture economy. The same way that books, movies, music that are produced by real people went virtual, that’s the same way we are using our blockchain to make the agriculture economy go virtual.
Agrikore – blockchain based smart contracting
Agrikore is a block-chain based smart-contracting, digital financial services & customer relationship management system for Agriculture. It organizes & digitizes the value chain so that the various actors – Farmers, Agro-dealers, Input producers, Produce Off-takers, bankers, commodity exchanges, warehouse receipt operators, logistic companies etc in the value chain can create & capture economic value sustainably because the economic activities are now visible in a single transparent ecosystem.
How does Agrikore make this happen?
Is Agriculture Fintech Ready?
Agriculture across Africa is a $330B segment in 2015 that will grow to $1Trillion. However, this segment is perceived as “not FinTech ready” because of the intrinsic nature of the segment. Agriculture is:
The primary economic activity that drives the value chain occurs in remote areas over large geographical territories; Not digitized – it’s a cash-driven segment; and Based on relationships in the immediate vicinity, not contracts which enable the economic activity to extend beyond the immediate environment.
These factors make agriculture, despite its size a segment that is considered as an “out-of-view” economic segment that either can’t or won’t be integrated into the wider economy in terms of FinTech, banking & payments systems, securities & commodities markets etc. Essentially to do business in agriculture on a massive scale in a structured way, you need a huge level of social trust or goodwill capital that does not exist today.
Market participants either do not trust each other enough nor do they trust that the market will work for them on a sustainable basis. For example:
- Bankers are not sure that if they lend, they will get paid;
- Farmers are not sure that if they produce, they will be able to sell everything;
- Manufacturers & intermediate processors are not sure that if they invest in growing their industrial capacity, they will find agricultural inputs of production at the right quantities;
- Intermediates like Agro-dealers, primary produce aggregators, warehouse operators, and transporters are not sure that if they extend services to the last-mile, they will find customers. Therefore because of the high level of uncertainty in the sector, the sector does not realize its potential.