This interview is part of our new Blockchain In Agriculture series, where we interview the world's leading thought leaders on the front lines of the intersections between blockchain and agriculture.
In this interview we speak with Shalom Ben-Or, Ishai Ben-Or and Ismail Kharoub, founders of Avenews-GT, to understand how their company is using blockchain to transform the agriculture business, and what the future of the industry holds.
1. What’s the story behind Avenews-GT? Why and how did you begin?
Shalom and Ishai Ben-Or, Jewish Israeli cousins, grew up in farming communities and from an early age were aware of the challenges that farmers have, in Israel and worldwide. Three years ago they met Ismail Kharoub, an Arab Israeli Technologist from Jaffa who had been developing complex information systems, looking to bring IT advancements to developing markets.
Together the three of them built Avenews-GT, a digital platform for the commercial trade of agricultural produce which enables users to digitally manage their trade operations, addressing one of the biggest agricultural challenges – lack of transparency and information.
Agriculture is one of the least formalized sectors, because agricultural trade is old-fashioned and informal, based on paper records, handshakes, and verbal agreements. These non-digital practices have generated numerous problems including fraud, murky pricing, dependence on costly intermediaries, and other challenges that harm the profitability of the sector.
The most significant challenge is that as a result of these non-digital practices there is an absence of data from these transactions and smallholder farmers and SME agribusinesses are not able to develop a financial identity. As a result, they face great difficulty in getting formal financial services from banks and other financial institutions.
Our mission is to create a digital platform powered by blockchain which allows previously invisible actors in the agri-supply chain, from the first mile up, to be empowered by their data.
2. Please describe your use case and how Avenews-GT uses blockchain:
We believe that the future of agricultural trade lies in digitizing and standardizing the trade process, not only between sellers and buyers, the entire trade process needs to be digital, including third parties and supportive services, to create a complete network of ecosystems for agricultural trade.
Avenews-GT empowers all participants in the agricultural supply chain, including the previously invisible first-mile smallholder farmers and SME agribusinesses, to benefit fairly from the trade.
We do this by providing a digital trading platform based on blockchain technology that combines agri-trade services such as inventory management, digital trade document generation, and payment mechanisms in one secure, trustless and transparent environment. This enables commercial sellers and buyers of agricultural produce to transact directly with each other locally and worldwide and simplify transaction processes, reduces distribution costs, creates financial security and increases supply chain transparency.
The platform is a complete ecosystem for agricultural trade that integrates blockchain-based digital portals designated for third-party service providers such as financial institutions, logistics and insurance providers to provide the necessary services to the trade parties seamlessly, with a transparent flow of data.
3. Could you share a specific customer/user that benefits from what you offer? What has your service done for them?
One of the clients working with us is a large bank operating across Africa. They see the potential in the agricultural industry, where there is an estimated $180B demand for financial services as a result of a lack of data, and they want to increase the services they offer to their existing clients in this sector and expand their reach with new customers. Currently, their agribusiness clients trade activity and the smallholder farmers they are working with are invisible to the bank.
The platform enables the bank to mitigate their risks and provide the necessary financial services to smallholder farmers and SME agribusinesses across the supply chain.
This is made possible by the digital business identities, including their performance data captured on the blockchain.
A successful pilot was completed with the bank where we shifted their agricultural client’s trading process from paper records to digital data. Within six months, more than one hundred transactions, generating more than US$800,000 in sales of agricultural products and more than 100 new business entities became visible to the bank.
4. What other blockchain use cases in the agriculture industry are you excited about?
Food Traceability – Currently it’s impossible to track individual grains, beans or bulk agricultural commodities often bought on a spot market, such as coffee, soybeans, and wheat back to their source. However, with the implementation of blockchain, it is possible to track the total volumes bought and sold for each participant in the supply chain, all the way down to the farmer who grew it, how it was grown, and what certificates are associated with the individual commodity.
We are incredibly excited by self-executing smart contracts together with automated payments. We think this will completely revolutionize the fresh produce trade, specifically with regards to ending disputes over quality and pricing.
5. Where will Avenews-GT be in 5 years?
In 5 years, Avenews-GT will be the standard platform for the trade of agricultural products globally, and the gateway to receiving agri-financing for all of the entities operating across the agricultural supply chain. The platform will have defined the new way to conduct a transparent and secure agri-trade.
Avenews-GT will be contributing to ensure food security, improve rural poverty, generate decent work and economic growth across the globe.