The United States Department of Agriculture (USDA) estimates that farmers receive only a pittance for their efforts in crop production. Particularly, of each $1 USD spent on the value chain, farmers only get $0.085. Unfortunately, this is a sad reality. In this view, the team behind Producers Token is providing agriculture security tokens to remedy the situation.
In a press release, the team announced Producers Market. Specifically, this is a project that will link farmers to their customers. Basically, the Producers Market will offer appropriate tools that will facilitate farmer-customer interaction. In addition, the platform will run off a blockchain network. This implies that users will experience the full benefits of blockchain technology.
Firstly, users will use smart contracts to make transactions. This means the levels of transparency will be very high. In fact, all transaction records will remain permanent on the platform for future reference. Secondly, the distributed ledger technology will remove the need for a central authority. Basically, this means users will have one-on-one interaction.
Thirdly, the digital platform will offer a means for farmers to finance, promote and market their goods. In addition, the platform will integrate social media with a view on improving farmers’ connectivity to consumers. Most importantly, the platform includes a native cryptocurrency with which users can make transactions.
Farmers to Benefit from the Agriculture Security Tokens
Essentially, a decreased number of intermediaries will enable farmers to get maximum returns from their activity. In fact, according to the news release, the platform charges a very small fee that will not reduce farmers’ earnings. Normally, transactions over a blockchain network are fast and cheap. This is for the reason that there is a one-on-one interaction between buyer and seller. Therefore, transactions do not go through many intermediaries, a factor which leads to high transaction fees.
On the other hand, consumers will have the opportunity to know exactly where there food is coming from. In essence, the motivation behind the project stems from a need to remove factors leading to farmers not earning fairly. Normally, there is a big difference between what consumers pay for products and what farmers earn from the products.
Doing away with Monopoly
According to Keith Agoada, co-founder of Producers Token,
“The archaic business model employed throughout the agriculture industry is not only unsustainable, but also rife with antiquated bureaucracy.”
As a result of the bureaucracy, there is a limiting of the producers’ earning potential. In addition, the bureaucracy creates a monopoly that hurts both small scale producers and consumers. To remedy that, agriculture security tokens will reverse that process and put money back into farmers’ pockets.