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 Jori Armbruster, CEO of EthicHub, to understand how his company is using blockchain to transform the agriculture business, and what the future of the industry holds.
1. What’s the story behind EthicHub? Why and how did you begin?
JA: I am half-Mexican, half Spanish and I have been living in both countries. I still do and I have been concerned about the big difference regarding the cost of money in these two worlds. In developing countries, there is a lot of money and for that reason is very cheap. We don’t get any interest for our savings in our banks. On the other hand, there are countries where the money is expensive because they don’t have it. Just think of what happens in Mexico, where we started. Small producers must pay over 100% interest rates for the money they ask in cash. Sounds crazy, right? But they are able to pay back the loans because they have a profitable activity and they are hard workers. I always thought that this difference does not make any sense when all of us are living in the same planet.
The idea of EthicHub was born around this reality and it started to become my main focus when I read that the unbanked were ¼ of the world population and that crowdlending was growing exponentially but there were very little international crowdlending and even less crowdlending for the unbanked farmers. Until I discovered blockchain I did not realize what the solution was.
It has been a long way but day after day the project is becoming stronger. We are very proud because our idea has been massively recognized. We won the blockchain for Humanity award (b4H) in financial inclusion, the Spanish fintech award in social impact and Best design for development by the Spanish Public Agency for Development just to mention a few.
2. Please describe your use case and how EthicHub uses blockchain:
JA: Blockchain technology has shown us that now we are able to cross the frontiers of money. And this is awesome. Now we can transfer value over the internet in secure a way, transparent, fast and almost free of cost. So, we have a new technological paradigm to try to develop new business models and build ecosystems where all the actors involved win. In our case, the small producer will find a new financial tool with interest rates lower and affordable. On the other hand, the lenders will receive great interest for their savings.
The money will go to promote the development of agricultural productivity, to diversify crops or to add value to the farmers’ products and all the money will impact directly on the real economy based on work.
Also, we have developed our own certificate to promote and validate the social, economical and environmental good practices; and our platform gives the opportunity to the producers to sell their crops in a P2P market, with full traceability and without middlemen so they will get better prices.
All these business relationships are conducted by smart contracts giving full transparency and immutability by automatizing the system at the same time.
3. Could you share a specific customer/user that benefits from what you offer? What has your service done for them?
JA: Our prototype started in Chiapas, México, with small coffee producers. Over 60 families have joined the platform and gotten their first loans. We sent them nearly $60.000 and they have paid back on time and correctly. These people do not know what blockchain or cryptocurrencies are but it does not matter. They only know that now, with EthicHub, they have a new financial tool that is cheaper and fair. We have some videos with these farmers and are so emotional. They tell us to send more money because they are hard workers, honest and respectable producers… and it is true! We tell them that we are working on that! We have a large number of producers who could join the platform but we need more lenders to achieve it.
4. What other blockchain use cases in agriculture are you excited about?
JA: It is amazing how blockchain technology has grown in recent years. Billions of dollars have been invested in all industries such as banking, insurance, media, gaming, agriculture, crowdlending, among others. In fact, the investments are bigger than in the internet in the early days… and think about how the Internet has changed our lives. Blockchain is here to stay and the next Facebook, Amazon, Google will be based on blockchain technology. I really believe it.
One of the characteristics of blockchain is traceability of every transaction and that means that the user can have the certainty where a product comes from. This could be very interesting for the agriculture industry and some projects are already working on this. The point is that now we don’t have to trust in a middleman, with blockchain our trust is based on math and cryptography and this is magic.
5. Where will EthicHub be in 5 years?
JA: Only in the coffee sector in Mexico, there are more than 180,000 eligible farmers who represent loans for over $700M per year. But we have a global purpose and we want to be in as many countries as we can be and reach as many of the 1,500,000,000 unbanked farmers that are in the world. We want to become the first true unicorn, a company that not only worth billions but also has changed the life of millions for the better.
What we really hope is to demonstrate that there is a different way to do things and there is a chance to create a new economy based on mutual collaboration. For us, it is very important to measure our impact and to prove that EthicHub has favored the lives of small producers and contributed to generate profitable investments for lenders. With better interest rates, more funding for their crops and the possibility of a fair sell, these people have savings and they will be able to improve their lifestyle.
We are very motivated and I am sure that in 5 years the communities we started working with will have a way better life than they have today.