Following the tremendous success of the work we did in Nigeria , Liberia and other countries such as Afghanistan , Togo and others. I decided that we needed something much more superior to the eWallet. We had to be at the cutting edge of technology for Agriculture; I decided that we need to move to a blockchain core. Here is the story and I will be taking you on a 7 article journey over the next few months. Agrikore is a blockchain based smart-contracting, digital payments, customer relationship management and market place system developed by Messers Cellulant to make:
- financial markets work for Agriculture stakeholders.
These stakeholders are:
- community produce aggregators
- financial institutions
- development partners.
The Agriculture market in Africa, despite its $330billion size in 2015 and projected to grow to $1Trillion by 2030 is not organized. Agrikore provides this on its block-chain core. It makes this wealth addressable & accessible to all through a comprehensive system consisting of the technology, business processes, and operating models that delivers a systematic organization of the actors in Agriculture in a manner that it is extremely de-risked and investable on a large scale. This has never been done before. It is a game changer for communities, countries & continents. Agrikore solves the 3 big problems that have prevented Africa as a continent & its constituting countries from being able to feed themselves & use agriculture – the sector where African has a competitive advantage (weather, arable land, water) – to compete with the rest of the world. These problems are:
i.Access to markets arising from asymmetry of information that make inputs & produce trade etc markets work imperfectly within Agriculture: Millions of small holder farmers cultivate but they can’t find markets easily & consistently for their products. Thousands of commodity buyers need agricultural produce but can’t find the farmers who have produced. Neither do both market participants have a basis for price discover that is transparent & fair to all. The consequence is that Africa borrows to feed itself whilst it own produce rot in fields and barns. The marketplace capability of the blockchain solves this problem
ii. Access to liquidity – Credit & inclusion in Digital Financial services: A market becomes sustainable because it is liquid.i.e. people are able to fulfil contracts by paying on time and paying consistently through payment methods, instruments & channels that are transparent. . This means access to liquidity in the form of credit is a key factor. Credit is required by all the agriculture market participants, but financial service providers; be they financial institutions, international development partners, governments cannot easily inject liquidity into agricultural markets because of the lack of a framework that deals with the problem of identity management (KYC), contract administration & enforcement (trust) & last mile financial services (agents, stores of value , wallet or bank accounts ) . The smart-contract & digital payments & financial services functionality on the blockchain solves this problem because everyone on the blockchain is holding a smart -contract for _sales, loans, production, storage, transport, insurance etc therefore we can now make money have attributes such as – you can only use it for XYZ and spend it YZ way on the blockchain through accounts on the blockchain.
iii. Simplification of the market entry process for investors: Agriculture is perceived as extremely physical, risky & impossible to digitize. This perception suggests that private citizens, government , development partners, financial instructions etc who wish to participate as investors desiring either financial or social impact returns are unable to do so in simple way because agriculture requires that they either go to the farm physically or have to de-risk themselves by enforcing complex , complicated contract instruments with partners. The blockchain will serve as Africa’s Unit of account (crypto asset ) for agriculture. It is how we harmonize the language of agriculture – for example 1MULA = 5 Cows= 1MT of grains= 1MT of fertilizer= 1MT of seeds= 50 Baskets or crates of fruit and make it investable The MULA therefore is an agricultural crypto asset that is a unit of investment Normally, potential Agriculture market-makers which may be either corporate commodity buyers who use their order book or Government, Development partners, Private Investors- Institutional or individual- are unable to easily incentivise/stimulate the production, produce off-take, processing, storage logistics and marketing that make the market work easily because the mechanisms to provide the needed liquidity or velocity of money either as a loan or grant to the various actors starting from the farmer. This is due to several factors including lack of access, inability to monitor, and ensure the application/return of the financial input, and a lack of leverage in retrieving the returns from the investment. With Agrikore, the market-makers are insulated from the intricate system consisting of farmers, aggregators, offtakers, agrodealers, insurers, and commodity buyers that create value in the form of produce etc from agricultural inputs because the technology provides the transparency , integrity & immutability that grows the confidence of remote actors in the system. In the way Uber organized disparate single drivers into an organized ecosystem, Agrikore does the same for agriculture. By organizing the farmers etc in the ecosystem, and easing the flow of providing liquidity into the system, Agrikore incentivizes various elements that make- up the agricultural value chain by ensuring that resources are available to farmers on time. The existence of the produce itself serves as its own collateral, and a system of insurance, and inspection ensures that the flow of inputs and its conversion to produce is seriously de-risked compared to without the network. The blockchain based Agrikore system facilitates transparency of all transactions, with an immutability of transactions and records that assures confidence to all participants. A comprehensive system of smart contracts further assures trust in the system by facilitating and enforcing expected outcomes of agro-financial processes including disbursement, administration, and repayment of agro-loans, produce delivery, storage contracts, and ware-housing, and grants and subsidy, loan distribution. This is the first time on the African continent that a system that provides immutability, integrity and transferability of contracts within agriculture. We can now capture agricultural potential inside a digital ecosystem and create sustainable wealth. And like a car consists of many parts under the hood all working together to move the driver of a car forward, where the requirement is simply to put in gas. The Agrikore model ensures that liquidity that flows into the system, that the rewards of the system are shared equitably; but without everyone being required to create or operate any of the aspects of the ecosystem churning under the hood to create value, and ultimately returns.
The detailed brief on how this system works is described in detailed technical videos & documents available on Agrikore.com
Note: This article is part of a series of 7 articles on Features & Attributes of the Agrikore Blockchain; authored by Cellulant‘s Co-founder, and CEO of Cellulant Nigeria, Bolaji Akinboro. In following articles, he will explain more about each of the abovelisted components to ensure understanding of what makes Agrikore unique and transformational.