In less than a year, COVID-19 has reversed the decades-long decline of extreme poverty the decades-long decline of extreme poverty in countries around the world. In the process, it has added urgency to the development sector’s focus on serving the remote, rural communities where poverty often hits hardest, and where most people make a living in agriculture.
AgUnity is a global, blockchain-based technology platform, that uses low-cost smartphones to provide smallholder farmers in these last-mile communities with practical, accessible tools to connect with each other and work their way out of poverty. NextBillion caught up with David Davies, CEO and co-founder of AgUnity, to discuss the company’s unique approach, and the challenges and opportunities in leveraging blockchain, smartphones and other tech-based solutions for poverty alleviation.
Katie Beasley: Briefly explain what AgUnity does, where you operate, and what makes your approach effective/unique.
David Davies: AgUnity takes low-cost smartphones and we make them relevant and useful for the very lowest-income farmers in the world. We make the phones so they record on the blockchain the things that are important to farmers’ everyday life, such as recording the handover of crops, sharing equipment and generally collaborating together.
We’ve completed projects in seven countries now including Papua New Guinea, Ethiopia,Kenya, Sierra Leone, Trinidad, Tobago, and we’ve had a couple of small trials in other areas like Columbia and Uganda.
We concentrate on improving trust and cooperation between the farmers. We found that’s the big difference between low-income areas and big-commercial areas in Australia (where we’re based), where even people with multi-thousand-acre farms rely on cooperatives and associations. The very small communities lack that, so everything becomes more costly and more challenging for them. What we’re trying to do is level theplaying field by giving them a tool that can help them trust and cooperate better.
KB: Though a majority of the populations in many emerging countries earn their income from agriculture, many smallholder farmers live in poverty. In your view, what are some of the systemic reasons that such a critical population remains so poorly compensated?
DD: It’s because a lot of the people that are buying the produce, and the people in the supply chain, have a vested interest in keeping it this way. When you’re a small farmer earning a few dollars a day, and all the commodity buyers that buy your type of commodity are effectively acting like a cartel to keep your prices down, there is not a whole lot you can do. However, if you get a couple hundred farmers together into a cooperative, you start to make it a little bit better. And when you get multiple cooperatives working functionally, producing higher-grade produce, that gives them a degree of power to try to improve their livelihood.
The key is that smallholder farmers need to work together better, and in order to do that they need record-keeping to show what they’re doing.
In the past 30 years, the price of coffee and cacao – the crops grown by many of the farmers AgUnity has worked with – has hardly changed at the source. Yet, what we paid for a cup of coffee 30 years ago, compared to what we pay for one today, has vastly changed. The farmers are still getting the same money they were 30 years ago and we consumers are paying a whole lot more, which means the middlemen are making a lot more revenue from that same produce.
Our whole purpose is to try to enable farmers to get a fair price. We don’t want to make the industry inviable, we just want the farmers to get their fair share.
KB: Can you explain a couple of key ways smartphones can be life-changing for smallholders?
DD: The Western audience takes for granted the reason these phones are life-changing: basic record keeping on the blockchain. The ability to prove that someone owes you money, or that you need to pay them at the end of the season is very valuable in rural communities. If I’m a farmer and you’re a worker, and you come help me with my harvest and I’ll pay you when I get paid, we’ve both got a record of what we agreed on – and that allows the transaction to happen and be recorded on the blockchain.
Once the farmers can record what’s happened and what’s meant to happen, the whole workflow functions more effectively. It allows them to trust and cooperate, and once they do that, they can get a lot of additional benefits. The usual impediment of small farmers is they struggle to cooperate as a group – and that all comes down to record keeping. That’s the main thing that the phones do. That’s where blockchain is important, because when they record those agreements, it is important to know that nobody can change it. That way, the farmers can trust that both parties completed the transaction, and not even AgUnity can say that it didn’t happen.
But to enable this, you have to make it so that a farmer who’s never had a phone before can understand what to do with it. When smartphones first came out, they were pretty simple. But if you get a modern Android phone out of the packet now, most of us would struggle to know what to do with it. Imagine giving that to a farmer in Papua New Guinea who’s never seen a phone before. The key is, you have to make the phone and supply chain app simple to operate, so you can train people quickly and they get comfortable with it right away.
The second thing you need to do is make the smartphones so that they can operate when there is no signal or the farmers lose connectivity, as most of the areas that we operate in have patchy signal, and farmers often can’t afford to update their data plans.
KB: We definitely take for granted how easy it is for us in developed nations to have invoices, follow-up systems and accounting systems – meanwhile, some smallholder farms rarely even use receipts.
DD: A receipt for something isn’t a whole lot of good if you can’t really read. And it’s evenless useful if you’re going to have to pay the police to actually enforce it.
Because another issue in developing nations is that when someone wrongs you, getting that situation rectified is often difficult – and having vague records makes it substantiallymore difficult. It usually comes down to who bribes the police more. Not that all police take bribes, but it is an unfortunate aspect of developing markets. Once you’ve got good records, and the cooperative members know it, those sorts of situations will tend to solve themselves without having to getting anyone else involved.
KB: You mention that the phones are designed with a user interface that’s suitable for people with low literacy. Can you explain how AgUnity helps farmers to use the phone if they don’t know how to read at all?
DD: Writing is designed to be almost unnecessary. We key the interface using geometric shapes and primary colors, and we try not to have more than one thing per screen. They do things step-by-step, rather than having to understand too much on one screen – and that enables people who have no literacy whatsoever to handle the device. They do need to deal with numbers, but that’s fairly universal knowledge from what we’ve seen.
KB: You and your co-founder spent a year immersed with Kenyan smallholders in remote communities. What are some of the insights you gathered during this yearthat enabled you to come up with a technology that successfully reaches these customers?
DD: There are two key insights. The first one was understanding how farmers think about what they’re doing. We found that they distrust the people who make a profit from their commodity, because those are the people who have been historically cheating or oppressing them. So AgUnity never wanted to be a company that bought their produce and then sold it to someone else, because that would undermine their trust.
The other insight involved how to design a user experience that works for farmers who’ve never had technology before. Because they’ve never had a phone before, they have a hard time knowing if anything is wrong – and even if they did, they wouldn’t tell us because they assume that we know better than them. So you can’t ask them for feedback on a user interface, because you could make something completely dysfunctional and they would probably tell you it’s perfect, since they assume that they must be making a mistake.
The only way to really understand what works and what doesn’t is to give them the phone (or a trial solution), then watch what they do. By seeing when they’re struggling, you can adapt the interface. It’s much more difficult than in a Western environment, where you can go to the users and they will tell you, “This doesn’t work” or “You need to change this.” You don’t get that sort of feedback in most rural smallholder communities, so you have to actually live with them in order to be able to design a user experience that works for them.
KB: Your organization currently runs projects in Africa, Asia and the Pacific. Is there a fairly uniform application of the blockchain technology across different environments, or are the programs tailored to fit?
DD: The blockchain technology remains the same, because we use it in the transaction log: It doesn’t matter whether it’s a cocoa farmer recording the handover or a wheat farmer renting a combine harvester. That transaction, as far as the blockchain is concerned, is just a transaction.
However, the user experience and the workflow has to change for every situation. We always go in, speak to the farmers, learn what they’re doing already and try to adapt it to be exactly what they want. We’ve designed the application as a super-app, with pushable “applets” – so they can be easily customized. That’s a really critical thing that gives us a huge advantage over what most other organizations are doing.
We really have two clients: the farmers, who are our most important client, and the partner organizations that want to deal with them. So we adapt the solution from both directions.
If an NGO wants to collect more information about how well kids are eating, then we can include an applet for that. If a bank wants to include a loan application applet, we can include one of those. By adding features, we allow them to improve their supply chain, track produce, offer farmers other services, and help farmers in other social impact ways.
KB: Why do you believe blockchain is such a buzzy word in the social impact space right now?
DD: Blockchain is just another technology: It’s not cold-fusion, it’s not going to change the world. It has very specific uses, and there are some instances where blockchain is a very good solution – but it usually is used as a complement to other technologies.
You can’t just implement blockchain in the social-impact space and expect it to change everything. You’ve got to have an entire solution – and most of the solutions being rolled out in blockchain are honestly rubbish. It’s important to always think about the problem you’re solving, and then look for technologies that help you solve that problem.
That’s what we’ve done. Blockchain has an important place in what we are doing – it provides an immutable record of what’s happened that nobody can change. That’s the only thing we use blockchain for, and it’s really good for that. But you use technology to solve the problem, you don’t put in technology for technology’s sake.
KB: You’ve spoken in the past about the risk of burnout among social entrepreneurs in challenging markets. Do you anticipate more of this in light of the current economic reality? What steps can entrepreneurs take to survive the upheaval in these unprecedented times?
DD: I think in developing markets we’re only seeing the tip of the iceberg as to the economic impact COVID-19 will bring. First is the pandemic, second will be the food supply chain issues, and third will be the economic impacts of developed nations providing less aid and buying less produce. I think there are a lot more problems to come.
But for entrepreneurs, as much as change causes upheaval, it also causes opportunity – and this is particularly true for small innovative companies that can change what they are doing in the space of a couple of weeks. The key is to look for these opportunities. Don’t fight the upheaval, it’s going to happen and you can’t stop it. You can create a completely new business plan to adapt to an opportunity that didn’t exist previously. There will be plenty of opportunities to do very important and good work despite the crisis, if companies are willing to move quickly and adapt.
This article was originally published on NextBillion website on October 7 2020 . For the original version visit NextBillion.net
Photo courtesy of International Maize and Wheat Improvement Center and NextBillion.