One of the most promising sectors where blockchain is being tested is in agriculture, one of Haiti’s main industries. AgriLedger, an agricultural-focused blockchain systems provider, is working on a World Bank-backed pilot, within the framework of the Business Development and Investment project (BDI). This project aims to introduce a blockchain technology solution for traceability and payment that will allow the farmer to maintain ownership until the sale at final destination, while all the packing and logistics services will be provided by AgriLedger. The Haitian Ministry of Trade and Industry (MCI) sees this project as a way to boost agribusiness in the country, using Blockchain technology to provide an innovative solution to the actors of the agricultural chain.
Over the border from Haiti, the Dominican Central Bank has indicated that virtual currencies are not backed by the Bank and are not legal currency under Dominican law. Thus, financial institutions authorised to operate in the country may not engage in transactions that use these currencies, and individuals who acquire them or accept them as payment do so at their own risk.
Interview with Michel Ange Pantal, Co-ordinator of Haiti Business Development and Investment (BDI)
Haiti has not introduced any blockchain-specific regulation. Is there a will in the Haitian government to introduce regulation? Could you expand on what you think the right level of regulation should be?
Blockchain is being used in Haiti’s public sector through the Ministry of Trade and Industry’s (MCI) Business Development and Investment project (BDI). This program aims at helping Haitian small producers (mainly farmers for now) maintain ownership of their products along the value chain until final sale. In the BDI project, we have a component about improving the general business environment. In this component, the main activity is to create a legal framework to provide incentives for people to come and invest in Haiti. To do this, we are working on a comprehensive set of laws that will be submitted to the government cabinet for consideration and then to the Parliament. The intention is to create a legal framework for using blockchain in Haiti, which will be part of a package put forward to the Parliament.
Is there one particular Haitian minister appointed to lead on this issue? Would that a good idea?
There is no blockchain minister in Haiti. The attitude for now is that people are watching and waiting to see whether it will work. It will depend on what we will have in terms of result from the BDI project. If it works, I expect discussion about blockchain will expand quickly across government departments.
What do you consider to be key factors in successfully implementing widespread blockchain/DLT adoption?
In any blockchain application, the key is to understand what it is, what it does, and what it will cost.
First of all, if people do not know what it is then they will not care about the application. AgriLedger, who are working on the BDI project, are not only putting in place the system but also running training sessions for everybody involved. This is so that the stakeholders understand what they are dealing with. Once you know what it is, you will then need to know what kind of problem it will help solve. Finally, it is important to carry out a cost/benefit analysis of having such a system.
Which specific use cases/applications are being implemented in Haiti’s public sector?
The MCI’s BDI program aims to help Haitian small producers maintain ownership of their products along the value chain until final sale. Blockchain is being used in this program to provide real-time operational support in terms of financing, traceability, payment, and auditing. Since we are at the very beginning of the implementation, we have yet to present the results. About 600 farmers are involved in the current project. They are mainly involved in the production of mangoes, avocados and pineapples. Blockchain technology allows us to follow the product as it goes through the supply chain, from the orchard to the retailer’s shelf.
The BDI programme is funded by the World Bank. AgriLedger, the blockchain/DLT solutions company, won the tender for establishing the blockchain system used in the project. There are also private firms that are involved such as logistic service providers through a private consortium.
The store which buys the food will pay through some kind of account and this account will be used to pay anybody who is involved as a service provider in the process. Like the broker, the person doing the transportation, the logistics provider until everybody is paid, and the gross profit for the farmer. This whole process is registered onto the system that allows us to do both payments and auditing of the system. So, for now, this is the limit of how the blockchain is being used in Haiti.
What benefits have been seen so far?
Blockchain/DLT is mainly being used for four reasons: transparency, security, reliability, and rapidity.
- Transparency — We would like the final buyer to be able to check how much everybody is making in the process and how much money is going to the farmer. That is a requirement of the market these days as conscious consumers want to know where the product comes from and who is producing it and what is the story behind the product
- Security — The issue in Haiti currently is that the farmer does not sell his own product. There are middlemen who go and buy the product from the farmer for a very low price and take it from there. This keeps the farmer in poverty. So we want the farmer to make more money and the way to do that is not to get rid of the middleman but to help the farmer keep ownership of his product
- Rapidity — We want to use blockchain also for its speed. The reason the farmer is selling his product for a very low price is because they are paid in cash, which they are usually low on since they often start out poor and don’t have cash reserves. So if you offer the farmer a very low price, he has no bargaining power. The farmer would be reluctant if a buyer came and said that they will take the product but that they would get paid 6 weeks or 3 months later. We wanted an incentive to get the farmer on board and one of the incentives is to find a way to pay him electronically and quickly
- Financial inclusion — Blockchain will aid these farmers in becoming financially literate. Very few Haitian farmers today have a bank account. Making everything electronic will change this and this is where blockchain comes in.
Do you see any major political challenges preventing wider adoption?
The Haitian government generally supports this project. While Haiti is going through political unrest, the project itself is not affected.
Do you anticipate any ethical concerns or only opportunities around the use of blockchain?
There are no ethical concerns for now, besides the usual issues linked to private information management. I do not see any unusual ethical concerns, except that when you use individual data you have to face questions around confidentiality. These are the usual issues with data management and individuals. As we will be using the farmers’ private information on the blockchain, we need to have safeguards to make sure this data does not get stolen. That is the only ethical issue we have. As for opportunities, one can contemplate, for example, expanding electronic financial exchanges in all aspects of the Haitian economy, thus significantly increasing security in financial and banking transactions in the country. We have security concerns about financial banking transactions but if everything is being done electronically, we would be able to quickly alleviate these concerns.
What is the plan in the short to medium term (next 5 years)? How do you see the space evolving and how would you like it to evolve?
In terms of timeline, the current project will end in two years but we hope that the system will remain and people will be using it commercially by 2022. Further, in the next five years, we plan to extend blockchain to other value chains in the BDI program. The evolution will depend on the results we obtain from the current implementation process. Ideally, we would like this technology to become routine in all the public sector’s business. The next step in the medium term is extending it to coffee, cocoa and honey. There are also plans to expand blockchain application to textiles and artworks.
Is there harmony or coordination between Haiti and other countries in the region in working with new disruptive technologies, such as blockchain?
Since we just started, we do not have anything to show yet in terms of results. We are not in a position to talk about collaboration with other countries in the region.
But once we get the results for this project, and once the system becomes available commercially, we intend to promote its use in the Caribbean region and beyond.