Beer Conglomerate Uses Blockchain to Help Farmers

Reading Time: 2 minutes

Being a small farmer in Africa can be a hard life, especially if you have no way to prove that you have buyers and income.

Farmers Get a Blockchain Boost

AB InBev, one of the largest beer producers in the world (owner of Budweiser), is looking to change all that. The company is reportedly thinking more and more locally, and the use of the blockchain can translate to as much.

One application of blockchain technology that the company has developed and deployed is a system that allows farmers to prove what they’re selling to the company through the use of the blockchain. This enables them to then open bank accounts and get lines of credit based on their contributions to InBev.

This, according to Yahoo! Finance.

The product is built with the help of a company called BanQu. According to InBev CEO Carlos Brito, the product aims to help farmers who’ve been on the short end of the stick in the past.

Even when their yield triples or quadruples, they continue to be very small. […] We need the middlemen to consolidate this cargo to send to our breweries by the truckload. And this middleman was not necessarily passing the money we were paying to him or her to [the farmer].

Supply Chain Transparency

The new blockchain system aims to put a stop to all that.

By adding transparency to the supply chain, banks and other players in the system have a better means to judge the depth of a value proposition. Brito said:

[N]ow this farmer, who was never bankable — because she couldn’t prove income of any source, had no reports, or material or paperwork — now in a flip phone, she has in the blockchain proof that she is a supplier to AB InBev, a global company.

That proof can provide powerful leverage. The transparency of the supply chain also means that the middlemen previously mentioned will have a harder time cheating farmers and other parts of the system – everyone will have a more accurate picture of how much supply there is, and roughly how much it should be worth.

Such efforts drastically change the outlook of existing operations, and it’s precisely the type of disruption we can expect from the blockchain. Nevertheless, some have argued that the blockchain will only ever be useful for financial applications. This, despite major companies like IBM, Microsoft, and InBev building and deploying non-financial applications of the blockchain tech stack.

There are other obvious uses of blockchain technology in farming. Verifying that crops are somehow organic, that’s one application that blockchain could lend itself to pretty easily. A ledger could be created keeping track of all the pesticides and what not used in the growing of a crop, and that information could eventually find its way to the consumer.