The blockchain solution designed to stop farmers in developing countries being cheated
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National government organisations (NGOs) and other philanthropic organisations spend millions of dollars attempting to help create better access to markets and the establishment of farmer-based cooperatives, but struggle to deliver the impact promised.
AgUnity wants to be the missing technology link to help them succeed where previously they have failed. It has developed a a smartphone and blockchain based-solution for the world’s last mile communities.
Stockhead spoke with chief operating officer Angus Keck as the company prepares to launch an equity crowd fund via Equitise. It will raise a minimum of $250,000 and a maximum of $1.25m – although this will only be one tranche of a larger funding round.
The idea for AgUnity came out of a “Fintech for Good” competition where fintech founders were challenged to increase incomes among the poorest worldwide – particularly farmers.
“There’s already a suitable and efficient solution for improving farmer outcomes and that’s farming co-operatives – its worked in Australia, America and Europe,” Keck said.
“But we’ve asked ourselves why is this not working in [developing countries]?
“The biggest challenge in rural communities is that there’s a lack of trust and cooperation [between farmers who trade].”
Keck said a co-operative effectively has a central record book it controls, which leaves it vulnerable to manipulation.
“If an administrator wants to add a few dollars to their pocket, they can change an existing record of what was previously agreed without being stopped,” he said.
“But if I’m a wheat farmer in Kenya, surviving on $2 per day, there’s not much I can do.
“Unlike in Australia where we have strong governance mechanisms including a non-corrupt police force, my main course of action to dispute a transaction is to simply leave the co-op.
“No one wants to be cheated, it’s a natural human feeling.”
Blockchain technology provides a publicly available account of all transactions and activities on a “distributed” ledger.
The “distributed” part refers to the fact that the data is not collected or held on a single machine, but on a network of computers around the world.
For each transaction, a new “block” is added to the ledger that is connected to the previous block to form a chain.
To prevent manipulation and ensure that all copies of the ledger remain the same, each new block must be approved via a consensus algorithm.
“We basically thought what if we merge three existing and emerging technologies – global telecommunications coverage, low-cost mass-produced smart phones out of China and blockchain?” Keck said.
“And to combine them in a way where we can provide a platform where farmers can all do transactions and once the parties have agreed, no one can ever change that transaction.
“All this is existing technology, we know the impact its had on our lives.
“We build it [the software] hand in hand with the farmers. It’s based around simple workflows – the use of basic geomertic shapes and colours. It’s just getting them off the ground.”
The challenge is though that many people in developing countries have not used a smart phone before.
“In Ethiopia female coffee holders called it [the AgUnity phone] ‘touchy’ – a lot of these are first time technology users,” Keck said.
“We focus on getting them off the ground in how to use a new technology and once you’ve got them engaged and using the solution you open the door to introduce new services.”
If farmers don’t have coverage, offline functionality has been built in so transactions can occur even when there’s no coverage. As soon as a farmer comes into coverage transactions are reconciled to the cloud.
As with many firms seeking crowdfunding, AgUnity thinks it makes good business sense but is philosophically positive as well.
“What we like is that it [crowd funding] is democratising what is traditionally an exclusive sector – and that is wealth and investment,” Keck said.
“Usually you need to be a high net worth [investor] or a family office to get to make these [early-stage] investments.
“Now it isn’t a bad thing to be one of these, but a regular person with some money who is passionate about a product can participate in investing in this product – becoming part of that journey.”
Keck also told Stockhead if the company eventually became publicly listed, it would hit the market with a larger network than it otherwise would have.