Blockchain Development Program

Blockchain Development Program

The main objective of this MoA is intended to conceive, develop and implement a block chain project for farmers in India and inter-alia develop certain block chain technology and thereafter study the trends in farmer lending and overall farmer’s wellbeing and those who are associated with the Farmers Producers Organisation’s (FPO’s).

Essential baseline and background of the Project

Collectivization of producers, especially small and marginal farmers, into producer organisations has emerged as one of the most effective pathways to address the many challenges of agriculture but most importantly, improved access to investments, technology and inputs and markets. Department of Agriculture and Cooperation, Ministry of Agriculture, Govt. of India has framed a National Policy for the promotion of Farmers Producers Organizations.

The main objective of FPO’s (Farmer Producer Organisations) is to organize farmers into a collective and improve their bargaining power in the market. In particular, reduction of cost of borrowing, providing market linkages and overall wellbeing of the farmers. However, mere aggregation will not yield desired results unless the demand side and supply side problems are addressed. On the demand side, farmers would like to have access to timely finance with lower rates of borrowing. On the supply side, lenders require more information to assess the default risk of the farmers and thereby reduce their information asymmetry problem.

This proposed Project aims to reduce the frictions on both demand and supply side by introducing two specific technology based interventions, namely, robo-advising service (on the demand side) that aims to improve financial discipline of farmers and block chain design for farmers transactions with FPO and lenders (on the supply side), that aims to reduce the information asymmetry and better monitoring of assets for the FPO and lenders. These two technological interventions may help reduce borrowing costs and improve famers’ economic wellbeing. Thus, more efficiency and improved margins through FPO aggregation would increase farmers’ contribution to Indian GDP, hence this is first block chain implementation for farmers in India. Research on technology interventions to reduce information asymmetry is limited for farmer empowerment.

Develop two specific technology based interventions, namely, robo-advising service (on the demand side) that aims to improve financial discipline of farmers and block chain design for farmers transactions with FPO and lenders (on the supply side). In broad parlance, to build a blockchain interface of lender and the FPO-Farmer Producer Organisation referred to as (“Technology Development”)

Robo-advising service

Develop two specific technology based interventions, namely, robo-advising service (on the demand side) that aims to improve financial discipline of farmers and block chain design for farmers transactions with FPO and lenders (on the supply side). In broad parlance, to build a blockchain interface of lender and the FPO-Farmer Producer Organisation referred to as (“Technology Development”)
1.Develop chatbot to improve facility of repayment mechanism from farmers
2.Appropriate naming reference shall be identified for these 2 technological interventions. UoH shall be the IP owner of these technologies.
3.The technology will be an easy interface between lenders and FPO & farmers
4.Increase transparency between lenders and farmers over financial transactions. 3 (three) rounds of borrowings shall be observed from pilot start date and will review impact of blockchain in the overall Project
5.Project working scope will be extended to Telangana and Andhra Pradesh

The Project aims to partner with Samunnati Financial Intermediation & Services Pvt Ltd (“Samunnati”) and Social Education Economical Development Society -SEEDS, Roles and responsibility as the lender and FPO respectively and works towards building a blockchain between the two entities. Both the external parties, Samunnati and Seeds FPO shall be the consenting parties for this MOA.