Bridging the Data Gap in Africa’s Ag-Trade Industry

  • May 23, 2022

MerchantX by Bunyonyi Distributors

Executive Summary

Agriculture, Africa’s backbone, lacks timely and accurate raw data, inhibiting evidence-based planning and implementation of policy. Agricultural development continues at a slow rate because farmers cannot confidently make informed decisions, investors cannot identify and take advantage of the lucrative opportunities to channel their capital, and the government can neither predict nor measure the effects of their policies, all ultimately leading to poor decisions when allocating resources.

 

Due to farmers' inability to know market prices & customers' inability to directly access farmers (information asymmetry between farmers & customers in the marketplace), markets are prone to heavy exploitation & manipulation. Following the opening of the African Continental Free Trade Area (AfCFTA), in January 2021 together with our partners, we launched the MerchantX by Bunyonyi Distributors. MerchantX ™ integrates a new blockchain-based produce aggregation & procurement management system for merchants & traders on top of the already existing Data for Agriculture (D4Ag ™) ecosystem for farmers.

Intra-African exports as a percentage of total African exports have increased from about 10% in 1995 to around 17% in 2017, but it remains low compared to levels in Europe (69%), Asia (59%), and North America (31%).  

The MarchantX Protocol is an agricultural produce aggregation mechanism created primarily to enable 5PL (5-Party Logistics) coordination & deliver end-to-end supply chain traceability in the areas of:

  1. contract farming/mapping/analytics
  2. post-harvest aggregation & quality assurance
  3. procurement management
  4. storage/handling/packing
  5. freight/insurance/trading
“The long term vision & goal of this project would be to tokenize these commodities & facilitate the cash settlement using blockchain based stablecoins or NFTs as this would fully decentralize the trading network/platform and increase trust between market participants.”


About Bunyonyi Distributors

Bunyonyi Distributors Limited (BDL) is a Logistics & Distribution company founded in 2009 that aggregates and supplies an array of fresh/dry produce & fast moving consumer goods to & from the Greater Kigezi region from our suppliers & farmers to our clients including hotels, restaurants, wholesale buyers & bulk exporters. 

“As Bunyonyi Distributors Limited, agricultural marketing is our main goal. This covers the services involved in moving an agricultural product from the farm to the consumer. Numerous interconnected activities are involved in doing this, such as planning production, growing and harvesting, grading, packing, transport, storage, agro and food processing, distribution, advertising, and sale. It also involves the acts of buying supplies, renting equipment, and paying labor.
We also intend to establish a network of low cost cold chain & silo structures for storing bulk materials. Silos are used in agriculture to store grain or fermented feed known as silage. These Silos will be used for bulk storage of grain, and other food products. We may also look at packaging some of these Products like Maize Flour, Millet flour, coffee beans, rice, potatoes, etc.
More than 80% of Uganda’s population depends on agriculture. About 7 million households in Uganda cultivated land or reared livestock in 2019 (UBOS 2022, Table 2.1). They represented 80 percent of the total households in Uganda (UBOS, 2022, p. 3). Agriculture was the main economic activity for most of the heads of those agricultural households. Goods produced in factories and/or commodities in agriculture should reach customers, the primary purpose of Bunyonyi Distributors is to get these goods from the producers to their respective customers.
Agricultural products are highly related to the food and ancillary industries. Agro-products include a broad category of products related to agriculture and a wide range of products offers a wide range of opportunities globally. Broadly we can classify into 3 classes. One is resources like feed, seed, fertilizer, pesticides, machinery, etc. Another is processed commodities of food and fiber. And the third one is fresh food items like fruits, vegetables, etc.”
- GM— Bunyonyi Distributors Limited
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BDL also offers quality assurance on fresh & dry agricultural produce & does regular deliveries and pick-ups around Kigezi, regularly adding new pick-up sites and delivery times.

  • BDL currently aggregates Potatoes (currently Kinigye & Rwangume) from other farmers & cooperatives, with help from other traders, brokers, and its in-house agents.
  • BDL has built a relationship with BAJ Service Stations Limited — a network of strategically located gas stations around Uganda (heavily saturated in remote areas in Kigezi) to serve as collection points & quality control centers.
  • BDL has also built a relationship with Voice of Kigezi — a leading radio station in Kigezi that can help with sensitizing farmers about best practices, market prices as well as, and training.

Problems

  1. Access to Markets: Many smallholder farmers in Uganda are unable to access markets for their agricultural products yet people rely on agriculture as their primary source of income & there is a growing global population demand for commodities.
  2. Access to Financing: Many farmers live in poverty, often supporting multiple family members, and work hard all year round to nurture their crops and earn enough money to provide the following essentials for their families: Food, Shelter, Healthcare, and Education. This is having a notable impact on food security.
  3. Poor Agro-Infrastructure for Quality Assurance: Limited post-harvest storage facilities (both cold chain & dry), & irrigation systems. As well as poor packaging equipment of which producers are encountering a problem when supplying the global market in which their produce is not marketable/competitive due to the lack of adequate packaging.

Solutions

  1. Connecting Farmers to Global Markets: We aim to connect farmers directly to global agricultural markets for their produce. We have been working closely to obtain buyers across East Africa ie; Rwanda, Tanzania, and, DRC, and obtained a large sustainable market.
  2. Financial Services: We plan to work closely with HBC Uganda; a financial institution that organizes and trains farmer groups, and establishes packages of inputs, technology, and cash that farmers apply to significantly increase the productivity of a specific crop (or animal) in a specific location. Can then work with organized farmer groups whose members guarantee one another’s loans. HBC provides financial education and encourages farmers to open bank accounts and deposit savings.
  3. Portable Cold Chain Equipment & Grain Silos: We look to acquire multiple portable Solar Powered Cold Chain Storage Facilities & Grain Silos in Kigezi Sub-Region Kabale District to store Maize, Beans, Coffee, Peas, Wheat, Millet, Potatoes, e.t.c This will allow for greater mechanization during filling and feed out.
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