FreshConn is a digital platform using blockchain to synchronize all agribusiness entities in one world to achieve universal food security.
Describe the People and Place: Provide information that would be helpful for an outsider who has never been there and may have no context about this Place to better understand the area.
Vhembe district is home to 1.2 million residents who either come from the Venda, Xitsonga, Sepedi, and Afrikaans tribe. The district is a major hub of agricultural products in various forms of crops and livestock. Agriculture in this area is the largest economic sector and is the major agricultural contributor to food security in South Africa's large cities. Most of the products coming from the area are organic and good for the health of individuals. The region is able to export an adequate production to international markets. Large scale entities have the capacity to export their produce, while small scale players supply the local markets as they battle with accessing markets efficiently. The weather temperature range between 18 - 35 degree Celcius in summer, spring, autumn, and 7 - 16 degree Celcius in winter. Most parts of the provinces are rural areas comprised of small towns supporting the services and agricultural sector. Most land parts of the district comprise of arable land suitable for robust agricultural activities. The people in the area hope for an increase in agricultural activity among the youth, industries, access to technologies and markets. The region prides itself in the health wellness of its inhabitants because of a mixture of organic crops and livestock suitable for the cognitive and wholesomeness of the body system.
Challenges: Describe the current (2020) and the future (2050) challenges that your food system faces.
The principal reason to establish the project came from the following facts: The rising level of food poverty and inequality in the region, the disincentive of youth participation, lack of access to land, the rising of food price level which affect low income and unemployed people in the region, the deterioration of agricultural activity post-1994 in the region, the difficulty by subsistence farmers and commercial cooperatives to access markets, land, and operational resources, and the difficulty by cooperatives to embark on export-oriented businesses in the region. Most of these challenges are imposed by ineffective policy reform and transformation. Some of the current challenges are the skills deficit of the older agribusiness players who are not technologically savvy. The future challenges of the proposed system are the ever-changing technological developments that impose uncertainty on which digital transformation will be more dominant in the future, e.g. Artificial Intelligence or Blockchain, et cetera.
Address the Challenges: Describe how your Vision will address the challenges described in the previous question.
Our organization has been informed by professional research done by researchers in the area and pointed out the key and relative challenges. Waithaka et al. (2007) state that for smallholder farmers to be capable of making rational economic decisions, the economic and technical constraints that they face must be removed. In addressing constraints to smallholder agriculture, comprehensive agriculture support services become a necessity. Lack of markets and high transaction costs are some of the challenges facing smallholder farmers and this makes poor farmers to be excluded from participating in potentially remunerative commodities as a result of poor access to market and high transaction (Sendall 2007). Gratadew et al. (2001) on their findings on international food agribusiness management noted that in Ghana for producers to create better market access for local foods they need to provide additional market services and develop trust-based relationships with their buyers. In Uganda, farmers also face complex constraints that limit their participation and benefit from agricultural market chains. Suggestions were made that the Government, civil society and all development agencies should mobilize and support farmers to form production and marketing organizations. The government should use an integrated approach to marketing; increase investment in road construction and maintenance, establish market and trade centers in all rural areas and fight corruption at all levels. Poet and Obi (2007) in their study of technical constraints to smallholder agriculture and their implications for market investigated factors such as equipment, information, market distance, assets value, infrastructure, total income, extension assistance, and farming type. According to Lauw et al. (2007), smallholder farmers are excluded from main street food markets in South Africa as a result of colonial legacy and due to the poor performance of their production, which is characterized by high production and transaction cost and poor quality making them less competitive. Lack of assets, market information and access to services are some of the factors that hinder smallholder farmers in potentially lucrative markets. In Limpopo province, the participation of small-scale farmers in commercial agriculture is still a major concern since the majority is excluded from supplying high-value markets due to a number of challenges (Machete 2004). According to Baloyi (2010), high-value markets in the Limpopo Province are normally located in the shopping malls while most small scale vegetable farmers supplying agricultural produce to these stores are located in the rural areas, far from towns. This leads to the distance from the farm to the town happens to be a major problem limiting small scale farmers to market their fresh produce to retailers - A major problem of the Vhembe district region.
High Level Vision: With these challenges addressed, now provide a high level description of how the Place and the lives of its People will be different than they are now.
Greater access to agricultural information will help agribusiness players make better decisions on (1) Transportation and logistics: Farmers begin to leverage economies of scale. They can organize and coordinate among themselves and (larger-scale) truckers to consolidate volume. Greater coordination also occurs around the timing of aggregation, collection, and volumes. Larger volumes can lower costs and enable farmers to realize higher prices. (2) Price and location. An ability to compare prices increases farmers’ power to negotiate with traders. It also enhances farmers’ ability to change the time and place of marketing to capture a better price. (3) Supply and demand. Farmers gain greater control over their production and product sales by finding new sources of demand, improve their ability to adjust supply and quality to market conditions, and learn about quality, grades, and product presentation. (4) Diversification of their product base. Over the longer term, a better understanding of market demand and consumer trends helps farmers diversify into higher-value crops and capture greater value. (5) Access to inputs. Farmers can make more informed decisions about which inputs are better or cheaper to buy and when and where to best obtain them.
Full Vision: How do you describe your Vision for a regenerative and nourishing food future for your Place and People for 2050?
A new innovative service is needed that will serve as intermediary bringing together buyers, sellers, and users in the Vhembe District, Limpopo Province, South Africa.
Digital tools have the potential to contribute to productivity improvements of small-scale farmers. First, they overcome information problems, most importantly the ability to access market information, and reduce persistent information asymmetries caused by reliance on market intermediaries. This promotes the inclusion of rural and often marginalized producers in regional, national or even global markets. Second, to raise on-farm productivity, the demand for timely and precise information on input use has increased. Better information delivered through extension services - about agricultural practices, new tools or new seeds - increases access to suitable technologies and makes other forms of capital more productive, thereby making production more efficient. And third, agriculture benefits from major innovations including logistics platforms that better link buyers and sellers along the agricultural production chain.
Improving the efficiency of agricultural markets is very important. The digital tool has the following impacts: (1) Improve market efficiency: Greater arbitrage opportunities, reduction in spatial price dispersion, lower wastage, increase in both consumer and producer welfare; Increases in farm-gate prices from improvements in bargaining power with middlemen, greater market participation in remote areas through more efficient coordination. (2) Enhance farm productivity: Facilitates adoption of improved inputs by providing extension advice and weather forecasts at a lower cost and encouraging agricultural investment decisions; Improvements in rural households’ food security, income, the value of assets through enhanced management practices (3) Enable efficient logistics: Optimize supply chain management, enhance coordination of transportation, delivery of products, and improving capacity utilization; Facilitates secure payments, allows fast and safe transfer of funds to pay for products and inputs, agricultural subsidies, or remittances.
The internet and mobile phone applications facilitate the collection, storage, analysis, and sharing of information among a large and growing share of the agricultural community. The digital tool generates immediate private benefits as people can more easily communicate and access new sources of information. We synchronize the services of all agricultural players in one platform characterized by buyers, sellers, and user services. The usage of the mobile and web application reduce the money and time costs of accessing and exchanging information, hence, reducing transaction costs, that is, the cost of searching and exchanging information, of bargaining and decision making. There is also the facilitation of timely information on the most effective planting strategies, sources for improved seeds, the best price in the market, and sources of agricultural finance.
The project proposal is informed by recent research completed by the Department of Agricultural Economics and Agribusiness within the School of Agriculture at University of Venda, that focused on determining whether there is statistical significance differences between the average score for two farmer groups, that is, those who have access to markets and those who do not, to determine which of the independent variables account for most of the differences in the average score profiles of the two groups, and to come up with recommendations that will assist small scale farmers to access markets for their agricultural produce (Mukwevho R, and Annim F.D.K, 2014). The study was done using a large sample to obtain accurate results. The results of the study indicated that farmers who had access to markets were fewer than those who did not have access to markets. The results also showed that farmers who had access to markets were more educated than those who did not. Value of equipment owned by farmers, where they sell their produce, distance from farm to markets, extension education received and high transaction costs were all significantly different in the two groups of farmers. The findings agreed with those of other researchers. Distance from the farm to the market place was found to be negatively correlated with market access with the resulting reduction in the sale of produce. The quality of equipment owned by the farmers has been noted to affect the quality of produce. The results of this study indicated that those farmers who had access to markets were those who had a higher value of inputs. Consequently, through the multiplier effects, availability of inputs could have severe implications for the quality of produce for market access. In general, the variable that accounted for most of the differences in the average scores profiles of the two groups of farmers were: transaction costs, agricultural extension education, level of education of farmers, distance farm to market, where farmers sell their produce, and value of equipment owned by farmers. According to the study, smallholder farmers often face high transaction costs and other technical and economic constraints such as lack of equipment and long distances from farm to market places making it difficult to produce and access markets. The results of the study also are in line with other researchers who found out that small scale farmers are not able to access lucrative markets due to lack of assets and market information.
The following are market players to be synchronized in the system:
The digital project for market access has the best interest of the consumer and to promote food security to all. The consumer will be able to access the application through App stores and use it to access bulk produce directly from the farm, wholesale, fresh produce markets, and pack-houses.
SUBSISTENCE AND SMALL-SCALE FARMERS:
The digital project will initially have a focus on farmers in the Vhembe district area, even though the Mobile and Web applications will not exclude people from outside the region. Success in this region will provide an incentive to manage the technology at a national scale. The project is catering to more than 180 farmers and more than 40 agricultural cooperatives.
The food processors who purchase products from the region create an account on the digital platform and be able to make the best choices from who to buy from – based on preferences as distance, prices, quantity, and quality. Agriculture is the second largest sector after social services in the Vhembe district region, which makes it the largest commercial sector within the region. However, farming has been the main business focus of the community. The drawback of this is that it exports jobs and skills to industrialized cities outside the Limpopo province. We are strategically planning to partner with the University of Venda’s School of Agriculture, the National Empowerment Fund (NEF) and the Industrial Development Cooperation (IDC) to bring the food processing industry home where most of the inputs used to produce final products are found.
Most small scale farmers in the region exist in the form of agricultural cooperatives and this enables them to produce in large numbers. It is an opportunity for them to export their produce after meeting the Global Gap Certification requirements. Food processors in the region can take advantage of the link enabled by the technology to export final and packaged products internationally.
Farmers in the region experience a lack of connection with government extension officers and arranged visits that never take place. Many of the visits that take place involve a mismatch of expertise of the extension officers, leading to poor maintenance of crops and livestock by farmers, hence producing poor quality. The digital technology will involve extension officers and categorize them based on professional expertise or skills for the farmers to access the right extension officer.
HAWKERS, RETAIL AND WHOLESALE ENTITIES:
The wholesale and retail sector has a very active market where buying and selling of agricultural production take place. Each entity has access to all farmers and food processors. The digital platform is the marketplace where matching orders are facilitated.
PACKHOUSES AND FRESH PRODUCE MARKETS:
Fresh produce markets and packhouses contribute immensely in terms of daily price formation and supply of produce to supermarkets, hawkers, and retail markets. Their supply to the retail markets is more than that of wholesalers inside and outside the region. This makes them key suppliers of agricultural production.
We anticipate the rise of the transport logistics business to support the transactions that get completed by buyers and sellers. Transport businesses create an account to be accessed and to access farmers, food processors, export agencies, retail and wholesale entities. Transporting produce often requires coordination between producers, truckers, and, at times, warehouse owners and aggregate traders. Many producers, especially in remote and rural areas, must carry their produce themselves, often by foot, to the nearest collection point. Coordinating transportation is also important for larger traders who aggregate products for sale in urban or export areas.