Washington DC-based agriculture supply chain development firm AVC Global is partnering with the Riyada Group, one the leading conglomerates in Bahrain, to launch an African agricultural blockchain project.
After being in the R&D phase for more than a year, the project is being unveiled by the partners who are developing and deploying an end-to-end technology platform that will include blockchain, distributed ledger, smart contracts, distributed applications, Internet of Things, artificial intelligence, and “scrutinized tokens integrated with fiat-to-crypto on+off ramps,” according to an announcement on the the AVC Global website.
“When the founder of the Riyada Group, HRH Shaikha Dheya bint Ebrahim Al Khalifa, and I looked at the facts and AVC’s approach, we saw an opportunity to collaborate with AVC on something truly profound, which will supply agricultural products from Africa and Asia to the Middle East,” said Sergey Tsvetkov, executive vice president, Riyada Group. “We see Bahrain and Riyada Group as well positioned to be the key founding partner in this supply chain project.”
The project, which is being developed and made operational by AVC Global Holdings, a strategic venture between AVC Global and Riyada Group, will be an end-to-end agricultural supply chain and distribution network, connected to cutting-edge supply chain financing and infrastructure development funding designed as a supply collaboration to provide agricultural products from Africa and Asia to the Middle East.
Co-founder and executive chairman of AVC Global, Leo Giacometto, explained the numbers and trends that are the impetus for such an undertaking, telling Forbes, “Let’s look at the facts: A growing global population requires that the world’s $8.7 trillion annual agricultural supply market to increase 70% by 2050. That represents over $180 billion per year in new market demand that must be filled. That cannot be filled without African farmers and agricultural products they specialize in growing. In order to meet this necessity, the leading multinational and innovative food companies recognize that the world’s 500+ million smallholder farms must integrate into global agricultural supply chains with a special focus on Africa and India.”
Agriculture has seen waves of “revolution” that have advanced production methods, raised outputs, and increased yields over the past one hundred years. However, Africa remains in need of a distinct agricultural revolution that links its smallholders to wider agribusiness, according to the 2017 Africa Agriculture Status Report.
Indeed, in the 2015 report, “Ending Poverty and Hunger by 2030: An Agenda for the Global Food System” – the World Bank states that food demand in sub-Saharan Africa is projected to climb by 60 percent over the next 15 years, while the continent as a whole is expected to see a population of 2.5 billion by 2050. However, according to the UN FAO, Africa is already home to the greatest concentration of undernourished people.
Faced by these challenges, technology is widely being seen as a key answer to advancing agricultural production on the continent.
“Agriculture is not about sustaining people just above the poverty line; it’s about turning them into entrepreneurs who can thrive, recognizing the potential for this sector to lift millions out of poverty,” Debisi Araba, regional director for Africa at the International Center for Tropical Agriculture (CIAT), told Forbes. “Agriculture is poised for a mushrooming of investment across the continent.”
And as African agricultural production becomes more tech savvy and globally connected, and the Middle East increasingly needs to balance declining groundwater versus food security, CIS countries are shifting their focus for agricultural imports away from the U.S. and Europe, and toward Africa.
Indeed, while it is true that depending on agricultural production in Africa comes with a host of political, bureaucratic, governance, and social risks, initiatives that integrate blockchain into production models and the supply chain will go far to mitigating these risks.
-Lynda Kiernan