Maximizing Agricultural Efficiencies Through Digital Blockchain Payment

Digital payments have reshaped the global economy for the better. Making transactions safer and trackable promotes financial inclusion.

?Most transactions between smallholder producers and consumers in the agriculture commodities market still rely on cash payments. Empowering the agriculture community to move away from the cash economy will ensure safety regarding the traceability and efficiency for the transfer of funds.

?As digital innovations continue to develop in the payment sector, both corporations and consumers are interested in faster, safer, and more efficient ways to move their funds. But given the uncertainty of agriculture commodities trading, which modes of payment promote the best agricultural efficiencies and opportunities for businesses? The answer is clear: blockchain technology.

?What it means for Commodity Market Participants

?Participants using blockchain can deploy the technology to automate transaction agreements faster while maintaining high security and transparency through smart contracts. Smart contracts are codes stored in a blockchain that eliminates the need for intermediary involvement. At the same time, they increase transparency and reduce transaction costs for participants.

?Leveraging blockchain technology as digital payment in agriculture benefits producers and consumers tremendously. Besides reducing capital inefficiencies and maintaining the flow of supply chains, blockchain opens more opportunities for the underdogs within the agriculture community. Blockchain allows smaller farmers and ranchers to compete on a level playing field with more prominent industrial players. By ensuring fairness, this system empowers commodity producers.

?Level the Playing Field with Decentralization

?The participation of smaller farmers and ranchers in agriculture and commodities is vital to maintain competitiveness in the free market. Instinctively, we know that monopolization or market domination by a couple of big players leads to higher prices. Blockchain innovation expedites transaction agreements and capital allocation; it also issues proof of collateral.

?Since this innovation offers participants the ability to verify and track raw materials throughout the process, underserved markets historically considered credit risks can now be exchanged securely.

?The concept of “track and trace” is where records are maintained following a transaction, and the commodities are recorded at each touchpoint from the initial producer to the end user. This methodology of track and trace makes it easy to reference the transaction at a later date and further ensures trust in the ecosystem. The payment processes stored in the blockchains are immutable and transparent to everyone. Thus, begins the revolution of decentralized agriculture.

In summary, making transactions safer and trackable promotes financial inclusion. Empowering the agriculture community to move away from the cash economy will ensure safety regarding the traceability and efficiency of the transfer of funds. Hence, maximizing agricultural efficiencies through the blockchain payment system.?

Hagop (Jack) Bouroudjian is Chairman and co-founder of the Global Smart Commodity Exchange. Previously, Jack was Chief Economist at UCX, CEO of Index Futures Group, SVP for Nikko Securities, Japan’s second largest brokerage house; SVP for Credit Agricole Futures and Commerzbank Futures, divisions of the 17th and 25th largest banks in the world respectively.?He also served as President of Commerzbank Futures during the introduction of the Euro currency and oversaw the transition from D-mark to Euro.

Jack was a member of the board of directors of the CME Group during which time he helped demutualize the exchange and prepare for the IPO. He was an integral part of the Strategic planning committee and Executive committee aside from his director responsibilities. He was Chairman of the Equity Indices Committee and helped create the Russell 2000 futures and options, S&P Midcap 400 futures and options and the revolutionary E-mini futures concept.?The E-Mini (Electronic Mini) changed the way the world traded futures and introduced the marketplace to the rest of the world through technology. He was also chairman or co-chairman of over a dozen product and regulatory committees during that time.

Aside from over 30 years of industry experience, Jack is a published author "Secrets of the Trading Pros", Wiley 2007 and has countless articles published in industry periodicals and websites. Jack appears regularly as a guest contributor for CNBC, both domestic and Asia, and has done over 5000 global guest Television appearances. Jack graduated with honors and distinctions from Loyola University of Chicago and is happily married with two adult children