Guest writer, Ken Lohento, is the Senior ICT for Agriculture Programme Coordinator at the Technical Centre for Agricultural and Rural Cooperation ACP-EU (CTA). The CTA was established under the Lomé Convention between the African, Caribbean and Pacific Group of States and EU member states. Lohento, explains how blockchain could unlock new markets for Caribbean farmers.
Blockchain might be best-known for disrupting the financial sector, thanks to Bitcoin and more recently, Facebook’s Libra.
Yet there are scores of other industries ripe for transformation, and smallholder farming could be one of them.
The digital ledger technology can provide greater levels of transparency and, as a result, open up new, high-value markets to smallholder farmers in the Caribbean, revolutionising the way they go about their business.
Blockchain, at its most basic level, is a digital database that contains immutable information, which can provide anyone, including farmers, with secure, digital identities. It provides an additional layer of security and transparency for buyers, sellers, and all other actors in the food supply chain.
Using this technology, farmers can create a digital footprint, not only of every transaction they make but how they farm, the resources they use and the crops they produce. This then allows farmers to provide rigorous data on provenance and quality that can secure a premium from buyers.
But to fulfil its potential the technology needs to overcome three fundamental barriers: access, knowledge and capacity.
This is why the Technical Centre for Agricultural and Rural Cooperation (CTA) is funding new projects in the Caribbean to test the technology on the ground and meet some of these challenges head-on.
In Trinidad and Tobago, for example, a pilot system using blockchain to trace the quality of cocoa is being developed and tried by Bioversity International with the support of their partner AgUnity.
The project is testing a proof of concept that could help verify the quality of cocoa from the islands, which in turn could secure better prices for farmers, the majority of whom survive on just $2 a day despite producing raw materials for an industry worth $10 billion.
This could also have wider repercussions for Trinidad and Tobago’s export economy. Once one of the top five cocoa producers, the sector has waned recently to producing just 500 tons annually, compared to 30,000 tons a year a few decades ago.
However, since levels of digitalisation in Caribbean farming are generally low, agribusinesses often lack the technical knowledge to get the best from a new tool like blockchain. Finding the right way to communicate its benefits and encourage policymakers to support its adoption is therefore crucial.
Another blockchain project supported by CTA and focused on vegetable traceability in Trinidad and Tobago is led by Erba 96 partnered by the Caribbean Agribusiness Development Company (CADCO).
The project is testing a system that isolates and prevents contaminated products from reaching consumers. As part of the pilot, farmers, distributors and retailers will all be given appropriate training on using the system to ensure it is properly used at every stage of production.
Providing training for all actors along the value chain is crucial; blockchain relies on everyone buying into a shared system to guarantee its rigour and accuracy.
The pilot will also test how using blockchain can help to identify the source of disease outbreaks, limiting the spread of contamination much more quickly and efficiently than otherwise.
Finally, blockchain also has the potential to open up the financial services that farmers are often denied.
By making verification easier, the digital information provided by blockchain could support applications for credit or insurance to previously “unbankable”, risky farmers.
This would be an important step forward as around 65 per cent of the Caribbean population is unbanked, despite mobile penetration sitting at around 74 per cent of the population.
If farmers are given access to banking services, they can then invest back into their farms, buying high quality inputs like seeds and fertilisers.
And if blockchain technology becomes more widely standardised, they can be confident that they are actually receiving the high-quality inputs that they are paying for.
So, while blockchain is still a nascent technology, it holds enormous promise for smallholder farmers and agribusinesses, especially in developing regions like the Caribbean.
And though there is still much more to understand about potential applications or opportunities of blockchain, we must ensure that the Fourth Industrial Revolution does not leave agriculture, and small-scale farmers in particular, behind.