Blockchain technology has the potential to transform sustainable agriculture in Africa by enabling greater transparency, efficiency, and traceability across agricultural supply chains.
Many African countries face challenges such as lack of infrastructure, limited access to markets, and high costs of compliance and certification for agricultural exports.
However, blockchain’s decentralised record-keeping and ability to facilitate trusted transactions without third party intermediaries can help overcome some of these obstacles.
This article explores the application of blockchain technology to key aspects of the agricultural sector in Africa to promote sustainability.
What is Blockchain Technology?
Imagine there was a special notebook that lots of people shared. This notebook lets people write down messages and transactions that everyone can see.
When someone writes in the notebook, the message gets locked so no one can change it. More and more pages keep getting added to the notebook as people keep writing in it. This special shared notebook is called a blockchain.
The blockchain notebook doesn’t belong to any one person or company. Lots of people around the world help add pages to it.
These people are called miners, kind of like miners who dig up precious metals from the ground.
The miners use computers to help lock the messages that people write in the blockchain. This helps make sure no one can go back and change what has already been written down.
The blockchain notebook allows people to exchange messages and money in a way where everyone can see the transactions.
No one person controls the blockchain, and it’s very difficult for anyone to go back and change the messages.
This makes the information secure and trustworthy for everyone involved. The blockchain technology behind this special notebook is what allows cryptocurrencies like Bitcoin to work.
Applications of Blockchain Technology
Blockchain has diverse applications across finance, corporate operations, governance, and personal identity.
As the technology matures, we will likely see many more creative blockchain use cases emerge as well as increase adaptability.
Cryptocurrencies: Blockchain first emerged as the underlying technology powering Bitcoin. Now there are over 10,000 different cryptocurrencies built on blockchain networks. These allow fast, global financial transactions without intermediaries.
Supply Chain Management: Blockchain can track items through every step of the supply chain. This improves transparency, reduces fraud, and streamlines record-keeping for global trade. Walmart uses blockchain to track pork from Chinese farms to its stores.
Voting: Blockchain-based voting could offer greater security, transparency, and accuracy. Voters can confirm their votes were counted properly, while outsiders can independently audit results. West Virginia has piloted blockchain voting for overseas citizens.
Real Estate: Blockchain can facilitate and record real estate transactions. It provides a secure, permanent transaction record and automates processes like title transfers. Sweden is trialing a blockchain property title registry.
Identity Protection: Blockchains can securely store identity information and records. Users control their own data and choose what to share. Blockchain identity systems can prevent fraud while protecting user privacy. Microsoft and Accenture are building blockchain ID prototypes.
Advantages of Blockchain Technology to Sustainable Agriculture in Africa
Traceability and Transparency in Supply Chains
One major benefit of blockchain is the ability to track the movement of agricultural goods from farm to fork.
Through digital ledgers that record transactions at each step of the supply chain, blockchains can trace the origin, transportation, and distribution of produce and livestock products. This can help tackle food fraud, contamination, and mislabeling.
For example, the startup Provenance used blockchain to enable tracing of yellowfin and skipjack tuna from Indonesian fishers to restaurants in the UK.
By scanning QR codes on packaging, consumers could access records of the catch location, fishing methods, and processing activities for the specific tuna fillet.
Such granular transparency could help African farmers prove the origin and ethical production of goods to gain market access and command higher prices in countries where consumers demand sustainability.
Blockchains also allow supply chain participants to access tamper-proof shared data rather than having to rely on paper documentation.
This real-time transparency regarding yields, batch numbers, storage temperatures etc. across complex supply webs has the potential to build trust among actors and mitigate food safety risks.
For instance, the IBM Food Trust network brings together players across the food ecosystem on a permissioned blockchain to enable seamless and transparent exchange of information.
The Coffee Board of India has explored this system for sharing data with stakeholders to help make Indian coffee exports more competitive globally.
Similar approaches could be adopted across agricultural sectors in Africa.
Enhancing Efficiency through Smart Contracts
Smart contracts – self-executing lines of code triggered by a defined action on a blockchain network – are a pivotal construct for streamlining agricultural supply chains.
Smart contracts allow farmers, haulers, distributors, and other supply chain actors to seamlessly execute transactions and track contract progress with fewer intermediation costs.
Smart contracts can encode terms for crop insurance payouts so that farmers automatically receive compensation based on rainfall and yield data uploaded to the blockchain rather than relying on lengthy claims processing.
In Kenya, the startup ACRE Africa offers this exact service via smart contracts built on the Ethereum blockchain.
Additionally, smart contracts could enable automated payments to farmers upon delivery of harvests and transfer of title verified on a blockchain. This could lower bureaucracy, speed up financing, and improve farmer incomes.
Smart contracts also allow peer-to-peer renewable energy trading and sharing. Powered by blockchain technology, platforms like GridPower are creating solar energy microgrids in African villages, where smart contracts administer payments from community members who charge their devices using shared solar panels.
Expanding such models could help make smallholder farms in Africa more energy secure and climate friendly.
Securing Land Rights
Across Sub-Saharan Africa, 70% of rural land is undocumented. This lack of formal titles dispossesses smallholder farmers and makes investment difficult due to contested land rights.
Blockchain-based land registries that provide secure, decentralized records of land ownership and boundaries can help address this.
In Ghana, blockchain startup Bitland is tapping into satellite imagery and GPS coordinates to create immutable land records and allow residents to survey and register land.
The public can access historical data about property boundary changes to resolve ownership debates and clarify rights for legal protection.
Similarly, the Kenyan startup Land Layby Group is using a private blockchain to issue digital titles and location tags encoded in QR codes, allowing farmers to prove ownership of everything from small garden plots to vast acres of land.
Enshrining land rights on tamper-evident, community-managed blockchains can provide African farmers security and autonomy over their primary productive asset while enabling more accurate valuations of land for lending and dispute resolution.
Facilitating Access to Finance
Smallholder farmers often face challenges in accessing loans for essentials like seeds, fertilizer, and equipment before harvest season when they are short of cash.
Blockchains are enabling innovative lending models for the unbanked in Africa through decentralized finance.
For example, community-based credit unions and farming cooperatives can utilize blockchain tokens to facilitate microfinancing.
Members’ milk yields, cash crop deliveries, or livestock births and transfers can be tracked on blockchain.
Based on these records, members can instantly collateralize tokens to obtain short-term loans from the cooperative in cryptocurrencies or stablecoins, bypassing lengthy application processes.
Then loans get automatically repaid from future milk or crop sales through smart contracts.
Startups like Token Farm are implementing such token-based cooperative lending models on blockchains like Stellar to provide fast financing to smallholder farmers in countries like Uganda.
Peer-to-peer lending apps are also harnessing blockchain to assign reputational scores to users and allow those with sustainable and profitable farms to take out microloans from individual lenders without punitive interest rates.
By lowering barriers, decentralized finance can offer African smallholders much-needed liquidity to invest in climate-smart inputs and profitable activities.
Enabling More Sustainable Value Chains
Blockchain technology enables value chain actors far and wide to coordinate in pursuit of sustainability – whether by using blockchain-verified origin data for preferential sourcing or designing smart contract-based incentives for sustainable practices.
The World Wildlife Fund piloted a blockchain system called OpenSC that traces the journey of fish products and uses QR codes on retail packaging to provide consumers information verified by smart contracts – like the name and fishing practices of the originating vessel – that reassures them of buying legally caught, sustainable seafood.
A blockchain-traced value chain where ethical sourcing earns producers higher prices could similarly drive sustainability in African crop and livestock sectors.
Within blockchain ecosystems, smart contracts could offer tokenized incentives for sustainable farming techniques.
For instance, agribusinesses could reward smallholder farmers with tokens for minimizing chemical use, preserving forests on their land, or adopting climate-resilient practices verified through IoT sensors on farms.
When redeemed, these tokens could provide inputs for further sustainable farming at discounted rates.
This positive feedback loop creates aligned incentives between food companies and their smallholder suppliers for meeting sustainability targets.
Challenges to Blockchain Adoption
While blockchain’s potential for sustainable agriculture in Africa is vast, some key challenges continues to hinder its adoption.
Many smallholder farmers lack internet access, digital literacy, and an understanding of blockchain principles.
Substantial outreach and training through farmer associations and development partners would be essential for uptake of blockchain tools.
The complexity around cryptocurrency wallet use and blockchain data uploading may necessitate investment in shared infrastructure like agricultural blockchain hubs with local intermediaries assisting farmers.
Developing blockchain applications tailored to diverse small farm contexts across Africa entails significant technical capabilities and startup costs, which could constrain innovation.
Cost-sharing partnerships between agribusinesses, financial institutions, nonprofit groups and governments can help focus blockchain development on local agricultural and sustainability needs.
Some critics argue that permissioned blockchain networks controlled by agribusinesses may have limited net benefit for smallholders in global supply chains.
However policies can mandate transparency, fair profit distribution, and shared access to blockchain infrastructure to safeguard smallholder interests.
Ultimately farmer input is crucial for designing empowering business models centered on user value.
Policymakers will also have an important role in enabling blockchain adoption by providing clear regulations, improving rural connectivity, and fostering an innovation ecosystem around sustainable agriculture.
Moreover, international development agencies can fund blockchain initiatives aligned with climate and sustainability goals in Africa.
The Way Forward
Blockchain technology could be truly transformative for advancing sustainable agriculture in Africa.
Pilot projects should ensure solutions are accessible and beneficial for end users through iterative human-cantered design.
Developing the necessary digital infrastructure and capacities will require multi-stakeholder collaboration and long-term engagement. Policy and institutional support can create an enabling environment for blockchain innovation to take root.
If implemented thoughtfully, blockchain could provide African smallholder farmers an identity, voice and integration into modern agricultural markets, amplifying sustainability impacts.
The era of digital food traceability, data-driven agriculture and decentralised finance is just beginning.
Blockchain offers opportunities to build future food systems in Africa that deliver for people, planet and prosperity.
