Growing the fortunes of smallholder farmers in Tanzania through blockchain technology

By Millicent Mwololo

For its production and brewing activities, AB InBev, the parent company of Tanzania Breweries Limited (TBL), depends on high-quality agricultural crops. These can only be obtained from thriving communities and healthy ecosystems.

Taking a farmer-centric approach in its commitment to supporting sustainable agriculture supply chains, in 2018, the company committed to intensify skilling, connecting and financially empowering their direct farmers through a project that runs through to 2025.

In June 2022, TBL, through its subsidiary, Tanzania Distilleries Limited (TDL), announced that it had plans to reach 300 grape farmers through contract farming by the end of 2022. The company will reach the farmers through an agricultural support programme that is undertaken by AB InBev.

During the project’s pilot phase that had kicked off in 2021, TDL, the largest consumer of grapes and the biggest wine producer in Tanzania, disbursed Tsh350 million to procure 233 tonnes of grapes from its contracted grape farmers at a price of Tsh1,500 per kilogramme.

In mid-march this year, TBL managing director Jose Moran issued a statement saying that TDL was pioneering the development of the Tanzanian wine industry, a commitment which includes the support of local grape farmers.

He observed that TBL was aiming at supporting the socio-economic development of women in Tanzania by enabling them to undertake grape farming.

The brewer is committed to supporting the Government of Tanzania’s industrialisation drive by investing in the development and expansion of the barley programme to include additional smallholder and large-scale farmers across the country, that will see the locally produced malt capacity grow from 5,000 to 32,000 tonnes of malt by 2027.

In February 2021, TBL partnered with the World Food Programme (WFP) for the 2021 sorghum season, in an initiative that saw over 4,000 farmers benefit from the extension of the BanQu Blockchain project that enabled farmers to have an immutable digital record of their financial transactions.

The ambitious partnership sought to produce 10,000 tonnes of sorghum per acre, with TBL buying one kilogramme at Tsh550. The scale-up was informed by the success of the 2020 pilot project, which had involved 2000 farmers and had recorded 70 percent better yields than 2020.

In June 2022, TBL, in partnership with Vodacom, launchedBanQu Blockchain technology to add transparency and traceability to the supply chain. “The BanQu will enable farmers to have an immutable digital record of their financial transactions, namely production, sales, farm inputs, and repayments, and will also enable farmers to be paid via mobile money,” said Joel Msechu, TBL agriculture manager.

In a brief interview, Mr Msechu explains how BanQu has connected 5,000 smallholder farmers to the TBL value chain. Here are excerpts:

Q. What have been the most common agriculture supply chain challenges affecting farmers in Tanzania?

The Covid-19 pandemic has placed unprecedented stresses on food supply chains, with bottlenecks in farm labour, processing, transport and logistics, as well as momentous shifts in demand. Most of these disruptions are a result of policies adopted to contain the spread of the virus.

The food supply chain has shown remarkable resilience despite these challenges. As part of our research, we have noticed that many farmers lack access to accurate sourcing, tracking, and compliance, as potential roadblocks in their supply chain journey.

Q. How does BanQu look to solve these challenges to the benefit of smallholder farmers?

BanQu has helped farmers to better connect with the people they serve. The cutting-edge blockchain platform has allowed us to streamline systems, data, knowledge, and resources for the benefit of farmers. With BanQu’s revolutionary software, thousands of farmers have unprecedented access to banking and credit services. Through BanQu’s services, farmers in more than 40 nations have been able to prove their existence and involvement in the supply chain. Perhaps most importantly, the service has helped to economically empower farmers.

Q. Is the opportunity available for all farmers looking to work with TBL?

BanQu has so far connected over 5,000 grape, sorghum, and barley farmers to the TBL value chain, following the technical integration and pilot done in December 2021. We hope to extend this to other small-scale farmers locally. Farmers do not need a smartphone to access BanQu. Since the USSD/SMS functionality of the application has been customised to meet the needs of farmers, one can access it. Alternatively, farmers can register by creating a user ID on BanQu, that can later be linked to a phone.

Q. How does the opportunity feed into the SDGs and your sustainability agenda?

As part of our SDG and sustainability agenda, TBL is an active player in the agriculture value chain. The main raw materials that the company uses in the production of its products are sorghum, barley, maize, and grapes. As part of our smart agricultural goals, we would like to work directly with farmers to grow natural ingredients to enable the brewing of the highest quality beers.

The need to transform agriculture at scale is becoming increasingly critical, and key to achieving that is research, knowledge, technology and financing capabilities in the sector. By leveraging these capabilities, we can advance agricultural development and improve yields, resource efficiency, soil health, and smallholder income.

By supporting farmers to be skilled, connected and financially empowered, they are in the long run improving their productivity, profitability, and their efficient use of natural resources, such as soil and water.

Q. Where do you see smallholder farmers under TBL in the next three years as they continue to use BanQu?

Skilled farmers are not only better able to assure sustainable livelihoods and growing businesses, but they also make better use of natural resources. Agronomic support across Africa is provided by AB InBev’s in-country agronomic teams, who provide regularly updated production guides and host a variety of training events. Crop management protocols are developed, outlining effective management practices that are critical for productivity.

A local-variety development programme is in place for all priority crops in each country. Crop research trials are conducted by AB InBev’s research and development teams, and seed varieties tailored to local conditions are made available to farmers.

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SIDE BAR

Interview with Edgar Mboki, the agriculture project manager at Vodacom

Q. Why did Vodacom choose to pursue this partnership with TBL?

Vodacom’s purpose is to connect for a better future, and we believe that through a partnership with TBL, we can improve the lives of a lot of smallholder farmers by connecting them to financial and advisory services digitally.

Q. How has your relationship been so far?

It has been great. We foresee a very fruitful partnership with a lot of great milestones to come.

Q. How has this relationship benefitted smallholder farmers?

By paying farmers through their mobile money, a means that is much more convenient to them, we will be bridging the financial inclusion gap by giving them the credibility they need to access more financial products that will empower them.

Q. How does this partnership encourage more stakeholders to pursue a sustainable future with Vodacom?

The partnership is an embodiment of Vodacom’s spirit of getting it done together. Vodacom and TBL partnered up to address a cause that is close to both of us. This should motivate other stakeholders to follow suit.