NFT for food value chain resilience

We build a verified food information&certification system with NFTs hold by smallholders farmers that reward sustainable practice using ADA.

Jules Repusseau - Cardano Developer Associate (Emurgo) Agritech founder

Jin Yu- Data analyst senior - UX/Web developer 

Farmers from TABA

Solution -  Integrate  a food system on Cardano and  reward smallholders using ADA

New economic initiative are highly needed for smallholder to produce a resilient agriculture. (A)

Cardano NFTs by their policy ID can protect,  store and valuate  food information while be used by multiple stakeholders. A first application can already connect food information system with food buyers (consumers, food processing industries, retailers) to use Cardano blockchain to get source and secure information about is food product . https://codepen.io/ninojamay/embed/WNEmqwO?  (B)

The system can be further  by government and academics to understand  farm/ food production sustainability  offer a better protection to smallholders on the short and long term (C)

Smallholders can obtain more financial accountability by taking part in a Staking Pool that will create circular economy. (D)

Ongoing steps:

• Integrate smallholders from different horizon and asses their feedbacks - Complete the functionalities of the food information with more agricultural labels (organic production, agroforestry, water management, fairtrade, zero deforestation)

• Develop the first staking pool dedicated and run by smallholders farmers : Farmerstake

• Develop the buying system for food buyer be able to buy product directly from the farmer with cryptocurrencies

(A) Market 💸

We target smallholders (farmers with less than 5 hectares of production) in developing countries. Globally, 500 million smallholders produce more than 80% of the food production and contribute directly to feed 2 billion consumers. Smallholders are directly contributing to food autonomy and resilience however as COVID showed their production depends on a fragile and centralized chain. Sustainability is not among their concerns since they  they have to follow the growing demand in consumption notably meat and because they represent the lowest income part of the working population [0]. Various climate effect can affect the complex food production such soil degradation, drought , pest out breaks add pressure on their production[1] . Smallholders  However sustainable farming practices such as agrobiodiversity [2], soil carbon capture techniques [3] or sustainable land and water management [4] are necessary to reduce emission due to agricultural activities .

Then a food information system build on the blockchain  offer new way to trace food product, give economic incentive to smallholders with sustainable practice  and  enable farmers to accumulate asset and value that are not deflective.

The proposal is more cost-efficient, sustainable , and scalable to protect for every participant. Since food intermediaries suffer from trust issues among consumers, there is a need for a direct food information solution build on farmers' verified information where smallholders can access financial and social benefits and where everyone can run product life cycle analysis.

Small farmer increase their product values, farm credibility and communication and in the long term will access credit and market. This system also efficiently help a consumer to make conscious decisions out of commercial claims that can be incomplete/manipulated, and connect more directly with the farmer. It can also help to investigate processed food that has multiple components and ingredients mixed together with little information about ingredient origin. With the whole food data integrity is conserved without needing to rely on a unique retailer, this data also allow researcher to study with more details the carbon footprint of a product before being purchase by a consumer. Farmers will be able to promote their products directly on social media platform or dedicated NFT marketplace by using their wallets.

Building a transparent system will leverage brand interest to increase fair and sustainable initiative to source their products and get aligned with consumer needs and climate actions. The scope of certification can go beyond the product and can evaluate the sustainable land and water management (SLWM) or soil regeneration to further access the food production sustainability. This system enables participation and integration of new information to increase the product sustainability. For example the complete product carbon footprint can be directly accessed then written on processed products.

(B)  Build a secure food value chain 🍅

Non fungible token (NFT) information, transaction and ownership is store in the public ledgers. For a food system, NFT can then carry the Food data, show that the information where validate by a third party and that the NFT owner is the food producer, thus in a permissionless system. [5]

A trusted external auditor such as a farmer cooperative will be in charge to verify information then mint NFT with a private policy ID (example of a private policy with seed phrase https://minterr.io/mint-cardano-tokens/) then will send the NFT to the food producer wallet. This verification procedure increase trust on producer information. A Cardano explorer API (Blockfrost.io)  quickly identify policy ID to compare with the Verified Policy ID onchain, the actual owner (farm) and recover direct information about the food product.

The NFT asset ID will be tied to a QR code,  everyone can rapidly trace the data about product, location, farm  activity efficiently without the need to trust a reseller or a brand. Then data stored on the NFTs can be displayed to form comprehensive information UI/UX and promote  the farm property.

Food information security is detailed as follow: 🔒

1.  Cooperatives and Third party certification information are verified by the third party verification (TPV). Once verified, Cooperative and Third Party certification communicate a policy ID that will be listed in the Verified policies NFT stored on chain (cf technical diagram).
2. Cooperatives and TPC use the a minter platform (a specific minter will be available on FarmerStake) to mint with their register food policy (using their seed phrase) then send data NFTs to smallholders wallet.
3. When searching for a product, the website will retrieve the product with certificate verify NFTs policy ID. Advanced research will also allow to explore products from the same farm and map the product on a comprehensive map.

First prototype can be find here : https://codepen.io/ninojamay/embed/WNEmqwO?

(B) Working with Governments and Research 🔬

Mapping  food production  information with real tine weather data can help simulate environmental pressure on food production (external (precipitation, temperature), internal (market price, soil and water availability)). Simulation are needed to better understand their environment and create early warning system for smallholders. Government will explore the impact of certification in a joint manner with farms to measure the effectiveness of certification on the food system resilience in social and climate context and use with academic and research bodies.

Early warning can also be integrated with smart contract farming can help smallholders to mitigate risk of lost production then support them to change their agriculture practice. This contract can enable partnership between an insurance company that will unlock fund to a farmer in case of drought or late frost that damage harvest.

(C) FarmerStake :  Staking Pool lead by smallholders cooperatives 🪙

Staking Pool can be a new initiative for smallholders farmers to reach more accountability and develop a more resilient agricultural sector. By managing Staking pool revenue, smallholders cooperatives can decide how to distribute wealth  between identified smallholders' wallets and increase adoption in rural sector. We will initiate this process by giving verified smallholders address (25$USD worth of ADA) and bigger subsidies (50$USD worth of ADA) for holding at least a NFT from a certified third party. We will the offer farmer to stake their ADA on the FarmerStake to create a circular economy and send subsidies to new comers farmers.

The Staking pool can bring new incentive for Cardano user to reduce smallholders poverty, protect resources and fund sustainable agriculture.  ADA usage will back resilience and sustainable agriculture.

SDG Goals and KPI observed

The main goal of our project is based on the SDGoal 2. End hunger, achieve food security and improved nutrition and promote sustainable agriculture. The second goal is SDG 15. Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss.

The company will mostly focus on the sub goals:

2.a Increase investment, including through enhanced international cooperation, in rural infrastructure, agricultural research and extension services, technology development and plant and livestock gene banks in order to enhance agricultural productive capacity in developing countries, in particular least developed countries

2.3 By 2030, double the agricultural productivity and incomes of small-scale food producers, in particular women, indigenous peoples, family farmers, pastoralists and fishers, including through secure and equal access to land, other productive resources and inputs, knowledge, financial services, markets and opportunities for value addition and non-farm employment

2.4 By 2030, ensure sustainable food production systems and implement resilient agricultural practices that increase productivity and production, that help maintain ecosystems, that strengthen capacity for adaptation to climate change, extreme weather, drought, flooding and other disasters and that progressively improve land and soil quality

15.9 By 2020, integrate ecosystem and biodiversity values into national and local planning, development processes, poverty reduction strategies and accounts

15.a Mobilize and significantly increase financial resources from all sources to conserve and sustainably use biodiversity and ecosystems

Key performance indicators

In order to work efficiently on this goal, the company will focus on the fund raise towards the agriculture sector (2.a.2) in particularly to improve small-scale food producers subsidies (2.3.2) More specifically, we will look at the number of smallholders that adopt  sustainable agriculture (2.4.1) and the improvement for the farmer production quality  (2.3.1) and  diversification/ resilience. We will look at the following metrics:

• The number of smallholders/ cooperatives/ third party associate correctly register onchain
• The number of smallholders that receive starting fund and sustainable fund
• The total fund distributed to the agricultural sector
• The staking pool funds harvested

The team will develop new service to protect land and production biodiversity (15.a.1) and develop a new economic through a staking pool to finance biodiversity incentive . We will work closely with governments to reach the Aichi Biodiversity and Strategic Plan for Biodiversity and to create a living record of the farmers resources available to build new economic metrics accordingly (15.9.1):

• The number of food product registered and certification associated
• The regional position and food diversity of food production
• The number of government and researcher involved

Show us the money 💰

The first part of the fund ($2000/6 months) are necessary to hire a Cardano professional developer and an agro-industrial researcher fully granted for the following deliverables :

• ($1000) (1) Web development + Integration of the system with Smallholders and cooperative. (2) Assessment and improvement to fit the need of smallholders and food buyers. 

• ($1000) (3) Research paper to improve the system, collaboration and explore smallholders - blockchain initiatives

The second part of the fund ($2000/6 months) is dedicated to smallholders to adopt the system with their product. Each smallholders that adopt the system will receive 25$USD worth of ADA for holding one NFT send by a cooperative and 50$USD worth of ADA for holding at least a NFTs from a certified third party. In that way we will at the same time reduce smalholders poverty and increase adoption of ADA. Funds are administrated with the Taiwan Africa Business Association (TABA) and WADA local community to create the first cooperatives list in Africa and Taiwan to adapt the system, verify the NFTs and send the funds to smallholders.

The third part of the fund ($1000/ 3 months) will be dedicated to the creation of the staking pool manage by smallholders cooperatives. It will include the stake pool setting up with 3 relays nodes ($600) and the creation of communication web/support include a website ($100) and a Youtube channel ($300) that we will bid on the community.

 As a written article non of the team will use the fund and dedicate the resource as mentioned (at +/- 5%) In complementary looking for fund in the agriculture sector and blockchain VC.

Roadmap and Milestones 🚗

The official date will be the first January 2022.

For the next 3 months we aim to complete the food explorer tool and farmerstake website and integrate Taiwanese and African smallholders cooperatives including 40 farmers that will receive the first fund and test/ discussion with end users and developers of the ecosystem. Invite several group of the Cardano ecosystem to help us build the Farmer Staking pool.

For the next 6 months we are looking for to integrate new services on the top of NFTs such a mapping of the farm product and conduct a food resilience study that will be published.  We will raise NFT adoption with several government involved in Africa and South Asia (Vietnam, Thailand, Cambodia)  with 3 cooperatives and at least 10 farmers and a third party certification. We will look for 100 active viewers/ day.

For the next 12 months we are looking to create an official Playstore/ Appstore cross platform dApp where user can directly by local smallholder product. We aim to peak an adoption with  1000 active visitors and a wider variety of food NFTs and start working with food brand and retailers to cooperate with smallholders

Definition of success 🎯

Distribute $75 worth of ADA to more than 1000 smallholders ($75000) to create new asset will be a success. ADA can decrease poverty,  increased the food system resilience at the regional level create a decentralized sustainable economy and a innovative society [6] with agroecology initiative.

Complete article

https://medium.com/@jrepusseau/food-product-centered-information-system-using-standard-non-fongible-token-and-permissionless-a28cf6119153

References

[*]Investment in resilient food system in the most vulnerable and fragile region is critical https://www.nature.com/articles/s43016-021-00345-2.pdf ;

Pathways to Prosperity – 2019 Rural & Agricultural Finance

[0] Creating Synergies between Water, Energy, and Food Security for Smallholders.

[1] Food system resilience: Defining the concept

[2] Agrobiodiversity Index scores show agrobiodiversity is underutilized in national food systems

[3] The role of soil carbon in natural climate solutions

[4] Barriers to scaling sustainable land and water management in Uganda: a cross-scale archetype approach

[5] Digital Ag Series: Blockchain as a Solution to make Sensitive Food Supply & Value Chains Resilient and Transparent - The Open + Public Approach

[6] https://www.youtube.com/watch?v=97ufCT6lQcY