Henry Duckworth: co-founder and CEO of Agridex.
In the 1920s, Soviet authorities took advantage of the expansion of cotton cultivation in Asia: cotton was declared “white gold” and large areas of land were irrigated for cotton production. The problem was that they were using inefficient practices, such as outdated farming techniques, and in doing so they were wasting water on such a scale that it was causing an ecological disaster.
The earth dried up and the Aral Sea, the great oasis of the Asian steppes, evaporated. This is a major environmental catastrophe that serves as a short-term warning. The same story has repeated itself many times throughout history, but the lessons learned were short-lived. Today, I think we seem ready to repeat these same mistakes.
Feeding the planet’s 8 billion people depends on the development of small farms. About 35% of the world’s food is produced on small farms of less than 2 hectares, mainly in developing countries. But small farmers often operate on low margins and therefore lack the capital to invest in modern techniques or technologies. Instead, the modern agricultural system often encourages the expansion of inefficient agriculture, leading to deforestation and accelerating global warming.
But the problem goes deeper because the agricultural market is inefficient. Farmers sell into a centralized market, where crops pass through dozens of jurisdictions, each with its own language, currency, legal system, food quality standards and tax regime. And every step of the journey, from farm to table, has a middleman who takes their share of the proceeds. In fact, the average farmer only receives 0.03% of the profits from their crop yield. This not only deprives farmers of their autonomy, it forces them into subsistence farming.
Farmers are not opposed to affordable practices: they simply cannot afford them.
The barriers small farmers face are the same ones that prevent policymakers from decarbonizing agriculture. Ottmar Edenhofer, president of the European Scientific Advisory Board on Climate Change, said it would be “almost impossible” to meet the EU’s climate targets without a carbon tax on agriculture. However, policymakers were forced to reverse course on this path last year following protests from European farmers, who already rely on subsidies and cannot afford an emissions tax.
Even if they want to invest in sustainable practices or save the ecosystems in which they live, they simply cannot afford it. If this is the situation in Europe, the situation in many developing countries is worse. Any project aiming to decarbonize agriculture must face this reality.
Blockchain could be at the heart of the next agricultural revolution.
Outdated paper-based processes have been replaced by the Internet, which has improved efficiency but remains largely centralized. Today, I believe we are seeing a similar revolution with the rise of blockchain technology and AI. Blockchain has improved processes by replacing manual record keeping with secure, transparent and decentralized digital transactions.
As the co-founder and CEO of a real-world asset marketplace (RWA), I believe blockchain technology can be used to solve some of the major issues plaguing the industry, particularly for producers and suppliers , because it offers two key advantages: efficiency and transparency.
Transactions on the blockchain are settled almost instantly, with minimal fees. It lowers barriers to entry into the global market, allowing farmers to sell directly to buyers in a decentralized marketplace that removes any additional fees. Additionally, all transactions are permanently recorded on the blockchain. This makes fraud less likely and harder to hide. Finally, blockchain gives farmers access to working capital in a stable international currency, rather than a volatile local currency.
All of this means one thing: more money in farmers’ pockets.
A decentralized blockchain-based marketplace provides farmers with independence and autonomy. Importantly, it gives them access to much-needed capital to invest in their farms and land. Higher profit margins for small farmers could have a transformative effect.
Beyond raw materials, blockchain technology could also facilitate other types of transactions for farmers, such as the sale of agricultural land in Zambia or baking machines from South Africa to Zimbabwe.
How can farmers get started with blockchain technology?
Blockchain technology offers farmers a way to improve transparency, streamline operations and access new markets. To begin, farmers should begin by understanding how blockchain can directly benefit their specific agricultural practices. For example, it can be used to track the journey of crops from field to fork, ensuring traceability and helping to build buyer confidence. Farmers should evaluate their current challenges, such as record keeping, price volatility or access to financing, to identify areas where blockchain could provide solutions.
As a first step, farmers can explore blockchain-based, agriculture-friendly platforms that enable direct buyer connections and secure payment systems. The initial investment in blockchain technology is relatively low for small farmers. A smartphone and an internet connection are often the only hardware requirements for accessing blockchain platforms.
Many tools offer free tiers or low-cost entry points. I recommend farmers look for platforms with minimal fees and robust support systems. However, they may also consider partnering with agricultural organizations or cooperatives that can provide technical assistance and share knowledge.
To overcome potential challenges, farmers should focus on platforms designed to operate in low-bandwidth environments or offer offline functionality. Training and education are also essential; farmers can benefit from online workshops or resources provided by blockchain platform providers.
By starting small and scaling up, farmers can avoid common pitfalls and gradually integrate blockchain into their operations.
This is just a glimpse of the potential of blockchain.
There is no doubt in my mind that there are countless other potential applications waiting to be discovered. And that’s not to mention AI, quantum, and other exciting new technologies that are nearing maturity.
The inherent efficiency of blockchain can reduce costs and improve margins across the board; while its transparency can make the system more accountable. This could enable farmers to regain their autonomy and give them the resources needed to fight climate change. In short, the revolutionary change that blockchain technology can bring could finally give us the ability to make agriculture sustainable.
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