Ukraine’s economic renaissance begins with agritech. Overview of the Suntri-powered DPL platform
Information technology has opened up the new, digital reality to the world. It develops so fast that people simply cannot keep up with the pace. Its rapid transformation makes it very unpredictable. Even in five years, the changes so incredible can occur in the world, we would’ve never guessed or thought about. Today developers create new technologies and give rise to events that are changing the world and giving us a glance into the unknown, but beautiful future.
Digital platforms are a new vector of business development. They set new professional standards for industry participants, form dynamic ratings and develop competitiveness. Airbnb in real estate, Uber in taxi cab service, Amazon and Alibaba in e-commerce serve as good examples of such business approach. The emergence of such platforms in any industry leads to a significant reduction in transaction costs, streamlining of the operations and improved efficiency of its participants. Quite soon this disruptive innovation will completely change the agro-industry.
“Digital platforms are the cell of the third industrial revolution, and will replace the transnational corporations that were a cellule of the second revolution.” — Roman Nazarov, CEO of DPL Ukraine.
According to Deloitte, more and more investors are showing interest in the global agricultural market. Its total value today is estimated at $ 3 trillion. Investors expect high scalability and a significant return on investment. Their interest is closely related to constant growth of investment in agritech, which grew at 63% CAGR from 2010–2015 and keeps growing.
Ukraine’s agricultural sector will also be able to turn into a high-tech industry in the near future. Development of agriculture will ensure not only food security and environmental sustainability of the country, but will also be a huge step towards realizing Singapore’s economic miracle in Ukraine.
New technologies and business approaches will transform the agricultural sector through coordinated efforts of all the participants, including farmers, the government, civil society and private sector. The key factor in the success of such transformation will be to establish the right direction for the development of market relations, namely, effective cooperation between the participants. New strategies and investment models will open up the international market for small and medium businesses, as well as help Ukraine’s government resolve the land issue.
The moratorium on the agricultural land market in Ukraine, that prohibits the buying and selling of agricultural land, was introduced as a temporary measure in 2001. Today it is one of the main obstacles to investment in agribusiness and growth of the national economy. Years of discussions didn’t bring any efficient solutions, and Ukraine is still not ready to open a transparent and fair agricultural land market.
More than 32 million hectares of land is being actively used for agricultural purposes in Ukraine. Experts estimate a hectare of Ukrainian land at $ 1,000–3,000. This price is very low in comparison with European countries. Take Poland, for example, where with less than 14 million hectares of agricultural land, the cost of one hectare starts at $ 8,000. Since there is no ground for lifting the ban, there are no investments in Ukrainian land even with such a low cost. Investors are unwilling to enter the opaque market and risk losing their capital. Therefore, agribusiness finds itself in a vicious circle, where it lacks funds for development and has no means of attracting them.
Considering the above obstacles, how can we help Ukrainian farmers earn $ 1000–3000 per hectare of land a year and without having to actually sell it?
The team of the international project Digital Pulse of the Land has been actively developing a solution to this and many other problems of the Ukrainian economy for several years now and is ready to share the results.
World agribusiness now in one window
DPL is an international agritech startup with pilot projects in Ukraine and Africa. The team is working on the online platform that combines the decentralized exchange for international trade in agricultural products and the blockchain-cooperative platform for the efficient use of land. The platform is being built in strict accordance with European laws and regulations on the protection, storage and transmission of data.
“DPL platform will bring together entire world agribusiness in a single window”, says the CEO of DPL Ukraine Roman Nazarov.
It will become significantly easier for agro-industry participants to attract investment and implement their business plans, while business management and processes will become much more convenient with such features like real-time operational progress monitoring, data transfer and transactions history check. DPL innovative exchange will allow traders to receive up-to-date information, trade in the cash market and close deals with physical delivery using smart-contracts, as well as manage price risks through derivatives trading. All this at high speed, around the clock and with minimal fees.
The team wants to transform world agriculture and move it to digital space with innovative storage and data management technologies provided by Suntri.
“DPL platform is powered by Suntri blockchain operating system, based on blockchain technology and artificial intelligence, as well as quantum and cloud technologies. This solution allows us to completely decentralize the storage, transfer and management of data. The absence of a central point of vulnerability will protect the platform from attempts to cheat, hack, or disable it. We also utilized the latest Internet-of-Things technologies to provide high-quality analytics, monitoring of production and logistics processes.”
DPL plans to gather agricultural, consumer and production cooperatives in a single international ecosystem with broad functionality that allows to optimize processes between all the participants of the agro-industrial complex.
“Today, most of the Ukrainian agribusiness is being conducted “off the grid”. This is closely related to the high degree of distrust in the market. Therefore, we strive to translate these processes into a healthy ecosystem, make them as transparent as possible and minimize risks. The DPL platform will help build trusting relationships between all participants, from landowners, suppliers and traders to consumers.”
The distributed land registry on the platform will provide landowners with the opportunity to receive high profits using a transparent mechanism for long-term pledging of lease rights and holding land auctions. In turn, banks, financial organizations and private investors will be able to redirect financial flows to projects of the real sector of the economy and participate in their profits with minimal risks. This mechanism will make it possible to form the real value of agricultural land in Ukraine even in the conditions of a moratorium, attracting international investment without selling land. Access to global capital market and high profitability of business will help Ukraine accelerate the land market opening process and remove the social burden off the state.
Farmers, traders, owners of material and technical resources, agricultural holdings and managers from all over the world will be able to consolidate resources, competencies and experience by joining together in cooperatives.
Cooperative infrastructure of the platform will provide stable support and development of projects with the participation of world experts. It will open channels and feature models of product sales directly to consumers. Transacting and building business relationships will become much easier with the smart-contract constructor for trade and investment transactions. Landowners and project managers will have direct access to suppliers of resources, technology and information, which will help them increase their profits by reducing raw materials, manufacturing, logistics and business costs. Our cooperative approach in combination with new technologies will help those who own and use the land to take better care of it and increase productivity.
“New technologies and international cooperation will sustain Ukraine’s land significant increase in price and enable participants of agribusiness to increase revenue from land use long before the moratorium is lifted.”
DPL international team is actively entering into partnerships, researching new markets and attracting new members to the platform, which is launching in Ukraine in early 2019. The project has already attracted interested traders from around the world with a total annual trading volume of more than $ 1,000,000,000, and in early December, enlisted the support of the All-Ukrainian Association of Landowners and the Peasant Party of Ukraine. In Q1-Q2 2019, the project enters the African market. The starting point will be Madagascar, where the launch of the platform will take place in partnership with the local mining company Hola Firm. Following the successful launch in Ukraine and Africa, the project will be scaling to European and Asian markets.
DPL platform will be available for web, iOS and Android. You can already try the demo version of the platform. It’s free.
Suntri and DPL are active supporters of the 2030 Sustainable Development program, adopted at the UN General Assembly in 2015. We follow its latest developments and implement the set goals in our technological solutions.
Launch of the DPL platform, as an extensive solution for world agriculture, will be a good example of how Suntri blockchain operating system can be used to revolutionize other industries.