AgUnity

Since 2015, the number of people suffering from food insecurity has been increasing, and by 2030 it is expected to reach 660 million people. Of the 608 million farms the world currently relies on to feed the population, 84% are smallholder farms on which over 2 billion people live and work. However, despite their critical role in establishing global food security, the productivity of smallholder farmers is severely limited by food supply chain inefficiencies, and low incomes, which keep these farmers from feeding themselves and their families and turning enough profit to earn a living income (Marie, 2024, Harvard - Advanced Leadership Initiative).

Digital transformation has been widely heralded as the solution to overcome these challenges. However, the explosion in the global number of digital agricultural service providers targeting smallholder farmers from 53 in 2009 to over 700 in 2020 (GSMA, 2020) has done little to transform the sector. In Sub-Saharan Africa, as of 2019, 73% of short-term financial needs and 99% of long-term financial needs of smallholder farmers are still being unmet.

AgUnity offers a comprehensive digital platform aimed at empowering smallholder farmers and their cooperatives by digitizing agricultural value chains. This blockchain backed digital data collection and record keeping solution promotes inclusion of smallholder farmers into agricultural and financial systems by enhancing efficiency, transparency and trust. With offline transaction recording functionality and a user interface based on human centered design principles, the platform is designed specifically to connect digitally and financially excluded farmers to markets and financial services.

AgUnity's solution is targeted at digitally and financially excluded smallholder farmers and their farming cooperatives. Over 2 billion people live and work on smallholder farms, and they make up the vast majority of the world's poorest 40% of the population. AgUnity's solution promotes collaboration between farmers, enabling them to access commercial value chains, and enhances farmers ability to access financial services by improving their bankability with reliable and sharable digital records relating to productivity and income.

AgUnity's co-founder spent a year living in a rural farming community in Kenya prior to the AgUnity solution began to be developed. Over the course of the next few years, AgUnity's solution was co-developed alongside the very communities it is designed to serve through a process of iteration. AgUnity's team comprises of people with expertise in financial technology, data management and rural community developed, but also members of the community from each of the communities in which we are working. Adoption of the solution is always community driven, ensuring that the solution is always tailored to their specific needs.

AgUnity is actively deploying our solution in countries include Kenya, Ethiopia, Ghana, Indonesia and Papua New Guinea. We're currently working with the largest smallholder farmer cooperative union in Africa, with over 560,000 farmer members, to help them transition from paper and excel based record keeping systems to our simple, secure and reliable cloud-based system. So far, we have digitized the records of over 30,000 of their members. In Kenya, we're working with a food packaging and branding company that supplies the largest supermarket in Kenya to enable them to source produce from smallholder farmers. With support from the local government and NGOs, we've on-boarded a cooperative to our solution to demonstrate how cooperatives can perform the role of produce aggregation and supply to the company.

Solve can help AgUnity to attract the talent, public relations expertise and M&E expertise required to scale our solution and demonstrate the impact the solution has. This solution aims to improve collaboration across the private, public and academic sectors. AgUnity requires individuals with a broad range of skills and experience to do this.

The AgUnity web-based data management platform and smartphone transaction recording application promotes inclusion of smallholder producers into agricultural systems. By overcoming the barriers to technology adoption such as lack of digital skill, unreliable connectivity and cost, this innovation enables the simple and reliable collection and management of data. Features of this solution include digital IDs for producers, offline digital transaction recording, low literacy friendly user interfaces and a blockchain secured backend system. Replacing unreliable paper-based record keeping systems with reliable digital systems enables the activation of effective networks, creation of aggregation points and transaction transparency. This promotes participation of producers in cooperatives, and enables cooperatives to build trust with buyers and financial service providers. Ultimately this leads to increased producer productivity, profitability and resilience through increased access to inputs, markets and financial services.

This approach to driving digital, financial and value chain inclusion for smallholder producers was studied during a pilot deployment of the innovation in Kakamega County, Western Kenya, during 2020/21. Virginia Tech and Egerton University conducted a rigorous assessment of the value that blockchain backed record keeping can provide in a report that can be found here: https://vtechworks.lib.vt.edu/items/476603d9-d7f1-42c7-bc0a-35f8f72d96d3. The study found that producers incurred significant benefits from the increased trust and collaboration that the solution enabled. Ultimately, on average across the producers, this resulted in a 30% increase in income generated from the sale of their vegetables and a 50% reduction in time required to sell their vegetables. 

There are only a small number of alternatives to this innovation in the market, none of which are widely adopted because they are too complex and expensive. This means that the majority of smallholder producers and cooperatives continue to use paper-based record keeping systems, if any. By using only unreliable record keeping systems, cooperatives are unable to reach their full potential membership size, cannot meet the transparency demands of many commercial buyers and cannot access financial services. The AgUnity solution is targeted at farmers and farmer cooperatives which cannot afford any other solution. By using our product, farmers and their cooperatives are connected to the thousands of digital agricultural services providers that were previously unable to reach them.

Smallholder farmers face the following barriers to increasing their productivity and income, with women farmers disproportionately affected:

• Farmers have to grow, market and sell their produce themselves which is time consuming and inefficient
• Farmers have limited ability to transport themselves or their produce which limits who they can transact with
• Farmers have no way to determine who to trust and no recourse of action if a counter-party does not live up to their side of a transaction (further limiting who they collaborate or transact with)
• Farmers cannot afford to pay for productivity increasing inputs or services and have no way of establishing credibility with input and service providers to pay at a later date.

To address these challenges, AgUnity will deploy a digital platform (that overcomes barriers to technology adoption in rural communities) to farmers and cooperatives that enables:

• Efficient transaction recording between farmers and cooperatives in the field (e.g. integrated into the value chain rather than collected adhoc)
• Cooperatives to simply and digitally manage data
• Data to be secure (by using blockchain technology)

The output of these activities are:

• Reliable record keeping
• Ability for data to be shared (transparency)

We have shown through previous pilot projects that these outputs can be achieved and create impact https://vtechworks.lib.vt.edu/items/476603d9-d7f1-42c7-bc0a-35f8f72d96d3. What we are now establishing is how these outcomes can be achieved at scale through the use of blockchain technology, which provides enhanced trust, security and privacy to large-scale record keeping systems spanning across hundreds organizations.

The resulting outcomes of this are:

• Credibility (Trust)
  • In cooperatives from farmer members
  • In the quality of produce and reliability of supply from buyers (improving market linkages)
  • In the bankability of farmers and cooperatives from financial service providers (improving financial services)
• Collaboration at scale (enabled by trust between farmers and cooperatives)
  • Enabling aggregation and disaggregation of inputs, produce and services to and from smallholder farmers in an efficient and cost effective way
  • Promotes specialization of roles 

When these outcomes are achieved, smallholder farmers can be integrated into input, market and financial systems at scale.

Here is a sample of the goals and indicators we use to assess the impact of our solution:

• Farmers improve access to markets for higher value produce / higher prices (increase price received for produce grown on same land area by up to 50%)
• Reduced post-harvest loss (30%)
• Reduced time for farmers to sell produce (50%)
• Reduced time for farmers to be paid by cooperatives (50%
• Increased trust in cooperatives management from members
• Increased access to financial services (No. of financial products available at better terms)

AgUnity combines multiple cutting edge technologies to deliver and function solution. A key problem AgUnity aims to solve is the profound lack of trust that developing world farmers have in any system, including their own government records which in the developing world can often be doctored. AgUnity users are inherently suspicious of centralized systems and are very receptive to the concept of a distributed ledger when it is explained in appropriately simple terms. By using a blockchain ledger, AgUnity can communicate to ecosystem participants that their transactions once recorded, can never be tampered with.  

The AgUnity platform communicates via the custom asynchronous protocol with a cloud service; the back-end cloud service incorporates both a traditional SQL database as well as a blockchain. The SQL database is a traditionally designed cloud service which incorporates most of the necessary workflow and business process logic. The blockchain component of the back-end cloud service is a basic application of blockchain, simply to ensure that every transaction is immutably recorded in a semi-private distributed ledger. The blockchain is effectively a transaction log for the business system. In the event of a dispute or transactional error the correct state of a farmer’s wallet and basket can be reconstructed from the blockchain transactions. The back-end cloud service also provides web-based reporting and administration features that are primarily used by supply chain and cooperative management. 

There are 15 FTEs working on this solution comprising of 8 people full-time, 10 people part-time and an additional 10 contractors.

AgUnity has been working on this solution since the company was founded in 2016. The product itself has evolved over this time as we have developed deeper insight into what a scalable solution looks like, however the problem we are addressing has remained consistent.

Diversity and inclusion is a core priority for our company. AgUnity’s team is made up of a globally dispersed individuals with diverse backgrounds. Our company represents cultures from over 17 countries including the Americas, Europe, Africa, Oceania and Southeast Asia. Our stakeholders (project sponsors, clients, implementing partners, farmers) represent an even more diverse group of individuals, and we have cultivated an environment of respect for personal beliefs and backgrounds, and an ability to communicate remotely and digitally with all these individuals productively. We’re proud to be a global company and we recognize the deep value we gain from having a diverse team. Our team is fluent in English, and team members can speak fluent Spanish, French, German, Bahasa (Indonesia), Luganda, Kiswahili, Japanese, Mandarin, Korean, Hindi, Pidgin English (Papua New Guinea), Amharic, Oromo, Hindi, Brazilian Portuguese, Arabic, and Filipino. 

Since the emergence of COVID, we have increasingly employed field officers from project deployment areas. This approach has allowed us to build capacity in providing ICT-based service while integrating the expertise and local knowledge of these employees.

AgUnity has been building, testing and refining this solution alongside rural farming communities since 2016. It has been piloted in Kenya, Ethiopia, Uganda, Papua New Guinea, and Indonesia in different value chain arrangements. Through these experiences, AgUnity has learned how to design digital tools that overcome barriers to adoption (e.g. unreliable connection, lack of digital experience, cost, etc.) and how to use digital tools to promote collaboration and address challenges faced by farmers' at scale. There are now 35 cooperatives actively using AgUnity’s Co-op Manager product, with over 25,000 digital profiles created for farmer members of these cooperatives. With the use of AgUnity’s Co-op Manager, these cooperatives have successfully transitioned from using paper-based recording keeping systems to managing their farmer member data digitally, reliably and securely.

Of greatest relevance to this application is the pilot recently completed in Kakamega, Kenya (funded by USAID via the LASER PULSE project). An impact evaluation conducted by Virginia Tech revealed that income increased by 30% for female producers compared to the same quarter in the previous year. Food insecurity experience also declined. Post-harvest loss significantly decreased over the study period (Agnew et al., 2022). The outcomes of this pilot project attracted interest from the public and private sectors in Kenya. This resulted in AgUnity being approached by an agribusiness, Oljoro Foods Ltd, in Nyandarua County to deploy the solution to their supplying cooperatives and farmers. Ojoro Foods has agreed to pay AgUnity a 2% fee on all produce purchased from cooperatives that use the solution. The Executive Committee of Nyandarua County has signed a letter of support for this work and have expressed interest in scaling it up to 100+ cooperatives within the County.

AgUnity’s solution will scale primarily through a private revenue model, although support from the public sector will be sought to accelerate scaling. Cooperatives using the solution will pay AgUnity 2% of sales revenue. This is a revenue model that has been formally validated through an agreement with Oljoro Foods Ltd and their supplying cooperative, Uhootani SACCO. For a cooperative of 500 farmer members, handling approximately $182,500 of produce per year, AgUnity would generate $3,650 in revenue per year. Thus, by deploying the solution to 100 cooperatives and enabling them to grow to a membership of 500 producers, AgUnity estimates that by the end of the three year project, this project will be profitable and generating $365,000 in annual recurring revenue at a gross profit margin of 80%.

DIV funding is critical to generating the evidence required, through the use of robust research methods, that this solution can replicate and exceed impact outcomes achieved in the pilot project at scale in a commercially sustainable way. This includes demonstrating the value unlocked for each stakeholder when this solution is deployed. The primary beneficiaries are the smallholder farmer members of the cooperatives using the solution, however it is also important to demonstrate how local governments, downstream value chain actors and agricultural services providers, such as financial institutions, will benefit. This will incentivise adoption of the solution and the inclusion of smallholder farmers in commercial value chains.

By scaling the solution to 100 cooperatives, and driving positive outcomes for 50,000 farmers, AgUnity will gain the attention and support of other County Governments in Kenya to replicate the program in their counties. Through this approach, by the end of year 5, AgUnity estimates our solution will be used by 800 cooperatives across five counties in Kenya representing 400,000 smallholder farmers. By year 10, this figure is anticipated to reach over 4,000 cooperatives representing 2,000,000 farmers across primarily the horticulture, rice, dairy and coffee sectors in Kenya alone. However, DIV funding will not only catalyze the growth of this solution within Kenya, it will simultaneously catalyze the adoption and scaling of this solution in other East African, West African and South East Asian markets. In Ethiopia, AgUnity is currently working with Oromia Coffee Farmers’ Cooperative Union (OCFCU), which represents over 400 cooperatives and 560,000 smallholder coffee farmers. AgUnity has also validated demand for this solution in Uganda, Ghana and Indonesia which, combined with Kenya, have over 35 million smallholder farms. With DIV funding, AgUnity anticipates this solution reaching 10 million of these farms via their cooperatives within 10 years, and directly impacting the 40+ million people living and working on them.