Mr. Paul Kukubo - Digitalisation and New Technologies in the coffee value chain

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Digitalization in
Agriculture
A Primer through the Ishirika Agri Platform Farmer
Empowerment, Financial Support System and Value-Chain
Automation with Blockchain
www.ishirika.com
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The Problem Statement
Farmer Insecurity: Lack of access to
information, advisory, financial and
credit facilities for farmers to meet
their fundamental needs
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Annual Production (MT)
Brazil 2.6m MT
Kenya Coffee Marketspace
700,000
Smallholders
In Kenya
200M $
Annual Trading
Areas of Production: 31 Counties
38,620 MT 2017/8
1989
2017
129,000
49,000
Kenya Hectarage
3200 Estates 25,000 Hectares
Co-ops 114,000 Hectares,

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The Kenyan
Landscape

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• Small holders dominate
• Exploitative intermediaries
• Lack of access to credit
• Many Dysfunctional institutions /co-ops etc/
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The Coffee Value
Chain
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If you don’t engage your
farmers, your value-chain
remains poor

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Current value-chain
Farmers remain at the bottom of the value chain
1. Farmer 2. Coffee
Grower Society
3. Grain
Handler
4. Marketing
Agents
6. Buyer
7. Transport
8. Processor
9. Market
5.
Auction
Produces the crop at
his own risk, growing
what he thinks will
yield the best market
price
Post harvest, farmers
take their produce to
Cooperatives for
pulping, drying and
processing
Once processed,
coffee grains are sent
for milling, grading
and storage
Agents prepare
marketing catalogue
and sample for
auction
Buyers perform
sample tests and
participates in auction
to buy
Buyers organize
international shipping
for procured coffee
Coffee roasting and
packaging for final
coffee product
Retail, Specialty
businesses and
commodity traders
Current value-chain dominated and controlled by
marketing agents
High-level of inefficiencies in the value-chain
Ineffective governance, politically biased, lack of
transparency and challenges with collateral

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The Agri Platform
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Digitization across sectors 2019
copies of its most critical data. More complex will be the digital transformation of core public services,
such as education, healthcare, transport, and justice. For example, governments hope that a rapidly
expanding set of mobile health and telemedicine apps, devices and interventions will allow patients to
better understand, diagnose, monitor and manage their conditions remotely.

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Value and benefits of digitization
• Digitalisation for agriculture can be a game changer in
supporting and accelerating agricultural transformation
across the continent.
• For farmers, they offer access to tailored information and
insights that allow individuals to optimise their
production, gain access to appropriate products and
services, and explore new linkages with markets.

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Vision of Digitizaion
• If fully implemented at scale – would be a highly
connected, intelligent, real-time agricultural ecosystem
that is vastly more productive, efficient, and transparent
than ever before.
• The growing quantity and quality of agricultural data and
digital agricultural solutions significantly reduce the costs of
service, inputs, and information delivery for farmers and
other value chain intermediaries.
• This enables them to productively transform their
traditional business models.

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Ishirika Inqube case
studies

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5 million+
AI based
Soil
Analytics
7 million+
Farmers
DECISION
SUPPORT
PROBLEM
SOLVING
INPUT
ADVICE
BIG
DATA
The Ishirika Inqube Agri Platform - Experience in
Bengal, India

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Impact: Bengal, India
• 100% Income Increase, (Government validated data)
• 5 Million+ Validated & Accurate Soil Health Cards
(Unique in India)
• 400,000+ Farmer Queries generated and answered
• 15 Days Flood Relief Disbursement against usual 180 days
• 7 Million Farming Community created for regular
interaction & communication

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Brochure of Matir Katha
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Govt of Bengal
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Brochure of Govt of Bengal
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On-ground Deployment in Bengal
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Why
ü Process flow transparency
ü Authentication of source
ü Auditable data trail for Quality Assurance &
Food Safety
ü Customer confidence on your food product
ü Emotional connect with food
Traceability
English Breakfast Tea
Sold in the UK
For
Whom
Exotic Crop / Vegetables / Fruits / Dairy / Poultry
Farm sector entities / co-operatives / farmer groups
Wineries / other beverages
Organic Farms
Food retail chain
Food outlets
Individual large farm
Sustainable Circular Economy
Organic Moringa Powder
Sold in India
Magugu Rice
Sold in Kenya
Few Samples of Live Cases
(please scan the QR codes below to see)
Certified Halal Product
Sold in Philippines
Organic Millet Cookies
Sold in India

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Ishirika InQube
Platform

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Ishirika InQube Platform
• GreenQube
• Farmer Decision Support System
• PesaQube
• Farm Credit Management System
• LinQube
• Vaklue chain Traceability System

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GreenCube
Farmer Decision Support System

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GREENQUBE
• An integrated platform on cloud / on Android & windows /
tailored interfaces for farmer, co-operatives, financial
institutions and government regulators.
• Scalable / Dynamic / Content Rich / Remote-access on real
time / flexible to be adopted for local languages
• Blend of off-line and on-line access - to make sure that effective
functionality is maintained even in offline mode
• Entire extension and demostration support to be ICT driven -
activity / data / tracking, Data access to depend on role-based
permissions and hierarchy
• Geo-tagged digital mapping of every activity and data /
making it ready for analytics at any depth, real-time
• Farmer to be made integral to the platform, an advisory
interface to make a significantly differential perception

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GreenCube

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Farmer Learning
• An integrated learning management solution
• Upload of Videos, Audio files, PDFs, images and other
forms of file – stacked as per the flow of topics for
customized programs
• Easy navigation of the training journey
• Progress and usage monitoring

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Benefit for Farmers
• Real time advisory support, query window for pest and
disease problem
• Customized information support on farming practices
• Recommendation for optimum fertilizer and micro-
nutrient usage
• Market price data for proximity based agri markets
• Complete interface in Swahili
• Interface in voice messages as well, so that feature phone
users are not excluded from the digital ecosystem

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Benefit for government
• A single eco-system involving all stakeholders in coffee value
chain
• Geotagged data for decision support
• Location wise plotting for pest and disease related problems for
early alerts
• Good practices and success stories can be tracked easily and
shared
• Dashboard for crop-wise yield trends and projections
• Customized communication to farmers
• Increased perception of farmer welfare
• Social benefits of increase in farmer income
• A digital backbone for better management of farm loan and
crop insurance schemes

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Advanced decision support
• Application of IOT in predictions, proactive decision
making and extension reporting.
• Usage of sensors at strategic locations for ground-level
data gathering, which clubbed with auto weather-
reporting and soil characteristics can build a robust
predictive model for seed requirement & pest-disease
occurrences.
• Usage of drones in remote monitoring of extension and
demonstration work – as well as proactive pest
management.

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PesaQube
Farm Credit Management System

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Farmer Registration
& Geotagging
REGISTERED FARMER
REGISTERED
TRADER
BANK
Buys
Inputs
/
Sells
Product
Transaction
Validation thru OTP
Farmer
Request
for
OTP
Transaction detail is sent
to Bank
Credit
Support
Credit Request to Bank Credit Approval from Bank
Credit Rating
Crop Insurance Support
Credit Disbursement & Protection
Credit Usage Validation
FINTECH PLATFORM
1
3
4
5
Bank Pays/Deducts
Farmer’s Account
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2A 2B
2D
2C
PESAQUBE – Farm Credit Management
System

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PesaQube benefits
• FARMER
• Comparative Pricing of Agri inputs & Crop Procurement – with retailer locations
• Credit Profiling of Farmer – leading to better credit worthiness for future
• Risk minimization advices
• TRADER
• Preferred access to bank loan supported farmer pool
• Opportunity for credit support from Bank – as profile of trader gets built
• COOPERATIVE
• Stronger governance and management
• Direct access to credit for farmer members
• Lower administration overhead
• BANK
• Validation of Credit Usage towards Agri Input Purchase
• Monitoring of Credit Utilization
• Building up Farmer Credit Profiles leading to Credit Rating
• Protection of Credit Risk – Lesser NPA Percentage
• Basket of farmer support – leading to better farming practices and self-mitigation of risks
• INSURANCE
• Geo Tagged Farmer Database Access with localised Weather Support
• Farming advice – leading to better farming practices and self-mitigation of risks – thereby leading to better claim ratio
• Credit Profiling of Farmers leading to proper Product Costing

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LINQUBE – Value Chain Traceability
System

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The Blockchain Principle
Digital
Marketplace
Mobility
Payment
Settlement
Blockchain
Scalability
Consensus
Information
Sharing
Compliance
Farmer-enabled
digital marketplace
Web and mobile
app interface
Smart-contract
payment
settlement with
banks
Blockchain
backbone
Scalable solution for
rapid adoption
Value-chain based on
permissions,
consensus and
relevance
Seamless exchange
of information
between parties
Compliant to
industry standards
and local regulatory
requirement
HQhufuna
hufuna

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LINQUBE – Traceability through
Blockchain
• Blockchain technology is one type of Distributed Ledger Technology
which refers to systems that use consensus algorithms to replicate data
across multiple sites or nodes. It helps to connect inputs, suppliers,
producers, buyers, regulators that are far apart, who are under different
programs, different rules (policies) and/or using different applications
• Data is processed by every node on the network rather than through one
central hub. It provides a secure, distributed way to perform transactions
among different untrusted parties. This is a key element in agriculture and
food supply chains, where numerous actors are involved from the raw
production to the supermarket shelf.
• Blockchain has the potential to monitor social and environmental
responsibility:
• Improve provenance information
• Increase market acceptance of organic products
• Facilitate mobile payments
• Credits and financing, decrease transaction fees
• Facilitate real-time management of supply chain transactions in a
secure and trustworthy way
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Application of technology
to the value chain

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Kenya Coffee Growers structure
Farmer
Co-operative
Self Help Group Union Association
Small holders Based on 7
principles
Farmers
Small holders Largely a
spin off from the co-
operatives.
Registered as legal
entities.
These are groupings of
regional co-operatives
Registered under
These are are
national groupings
of Unions
Registered under
80% of Famers 5 % Famers
Medium and
Large Estates
Registered companies
and individuals
Bankable entity through
which farmer support is
channeled.
Bankable entity through
which farmer support is
channeled.
Funded by co-operative
membership.
Deals largely social political
level largely within
counties.
Funded by co-operative
membership. Address at a
social political level largely
within counties.
Self and bak financed.
Easier access to credit
Own wet mills Own wet mills
Some own dry mills

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Coffee Value Chain
Categories of growers
1. Corporate: refers to aggregators and
includes self help groups, associations,
co-operative societies and unions
2. Individual; Estates either owned by
companies or individuals
2. Harvesting; co-op or
agents provides advances
1. Growing; co-op or
Agents provides inputs
3. Transportation of
cherry to factory
4. Pulping: Wet processing
at Co-op or own factory
5. Graded and dried
Parchment packed
6. Stored at Co-op or
Own warehouse
7. Co-op prepares initial
paperwork for delivery to mill
8. Transportation to dry
mill
9. Dry Milling & Grading
of milled coffee.
10. MA takes custody
coffee on payment to
miller
11. Storage at licensed
Warehouse.
12. Marketing
agent/Miller prepares
catalogue takes sample
13. Samples Prepared
and submitted to
cupping room
14. Samples tasted
cupped and graded by
professional liquorors
15. Marketing Agents
prepare Catalogue for
auction
16. Coffee auction on
basis of catalogue
17. transfer of ownership
after payment remittance
to farmer or agent
18. Export
documentation prepared
by dealer
19. Coffee Shipped 20. Buyers receives
coffee
Finance
1. operational costs max of 15% or proceeds. Mainly
Factory overheads, Co-op management
allowances
Government Regulation: Documents and Reports
required across
Dry Milling
1. Costs billed to the farmer through marketing
agent
2. Farmer costs will be deducted from eventual
proceeds after auction.

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Simplified Value Chain
Farmers Factory/ Society Millers/Unions Marketers Buyers
Value chain Stage • Farm
establishment
• Primary
Processing
• Secondary
Processing
• Marketing
• Certification
• Shipping
• Warehousing
• Establishment
Key Financing Stage • Establishment
• Inputs
• Cherry Advance
• Farm Level Asset
financing
• Bulk input
• Cherry
Advance
• Asset financing
• Drying beds
• Pulpers etc
• Milling
machines
• Transport
• Storage
facilities
• Pre-export
financing
• Certifications
financing
• Coffee shops
establishments
Blockchain Sections • Farmer
registration
• Assets register
• Inputs registry
• Cherry volume
• Co-op registry
• Coffee
production
• Warehouse
registry and
receipts
• Warehouse AI
tool
• Milling
Production
• Bean grading
• Buyer and seller
record
• Sample
transactions
• Certification
Transactions
• Auction
transactions
• Bank interface
• Shipping and
Logistics
• Payment
settlements
Credit flow

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Benefits of the Ishirika InQube Platform
• Financial Institutes
• Full value-chain transparency
• Prevention of fraud and misuse
• Efficient payment settlement
• Smart-contract based payments
• Trusted authentication of transactions
• Marketing Agents
• Efficient commission settlement
• Transparency and prevention of fraud
• Track-and-trace up to individual farm
• Government
• Stronger governance and management
• Tamper-proof system to limit abuse of value-chain
• Prevention of fraud and misuse
• Lower administrative overhead

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Thank you
Contact:
paul.kukubo@ishirika.com
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