The reality behind ABCCDs’ digitalization platform??!!

Last Thursday ABCCDs presented some details of their digitalization project during Gafta digi seminar in Geneva.

First of all I’d like to say that I hv a lot of respect for ABCCDs and especially for the great people who work there (it’s a honor to hv 100s of such Linkedin connections).

But, having been an agri-trader for 20 years and dived into digitalization and blockchain for more than a year now, I feel that I do owe some comments to the agri-trading community.

And unfo, I must admit, the only advantage the ABCCDs initiative brings is to provoke a great debate.

Here is why.

1. In essence their platform will be a post-agri trade execution software, connected to blockchain.

But why creating a new execution software from scratch, when we hv plenty of good existing ones?

Do you really think that 100s of companies using different execution software will give them up and migrate to yours? It’s pretty basic this execution software, you know.

2. Blockchain use. Here we have a total confusion. Pls look at the below photo of their presentation, which says first: “DLT (blockchain) hv an embedded security and privacy by design” and then “no data stored on blockchain, just cryptographic hashes”!!?? So it sounds like the data will be stored on their App (on a server, controlled by them). When I asked them, how you will guarantee that the data, participants would input on your platform, is not shared with you? They responded, we will use a permissioned blockchain, where participants will run their nodes and will manage their data with their own crypto keys and with the consensus algorithm, validating transactions. First of all, this is a model of a consortium of a few big guys — type of blockchain. Bcs it is unrealistic to ask even 100s of participants to run nodes (you need computing power, other special features), let alone mass adoption, they pretend they targeting. People, do you wanna your blockchain recordings to be decided by ABCCDs consensus algorithm, validating transactions??!!

3. We learned that so far, what they did is only organizing a hackathon to select a tech provider who will build the platform (apparently, it’s selected) and industry players surveys. And the MVP (initial platform, which can go live) is expected only by Q2 2020!!?? It’s like E-Phyto initiative — FAO working on it since 2012 in essence and now they expect by the end of this year to only complete a pilot. Are you kidding me? Any feeling that agri-trading digitalization is deliberately delayed??!!

2. They say “By the Ag. Industry, for the Ag. Industry”. You would expect such elephants will build it and propose to market participants for free, just to anchor them more. Nope, “platform will be accessible…at affordable prices”.

Now some concrete proposals:

1. The global agri-trade needs new generation of blockchain and other tech-powered CTRMs, not simplistic, post-trade execution software. Again, a lot of agri-traders do already hv it. But what they truly and urgently need is new ways of effecting the trades themselves (transition to smart contracts, auto-executing the trades, — which need to use crypto payments & escrow accounts). And, which is especially true for emerging markets’ companies — new payment tools (in currencies of their choice, no more USD-dependence!!!) and new sources of trade finance (for ex. stable-coins, as banks are disengaging). Then, there is commodities’ tokenization — a way to express their ownership in a digital form, enabling true, local price discovery (no need to use US/FR futures markets to hedge anymore) and ability to trade and post as a collateral your goods, in a seamless, digital form.

2. ABCCDs — if you really serious about helping industry digitalize — simply begin requiring all market players you dealing with, to use only digital docs (first transition, then full use). For ex. of the two existing companies with ready-to-use digital docs’ solutions — essDOCS (was present at seminar) and Bolero. Really push FAO, other parties, you can do it.

Promote crypto-currency payments (soon Facebook’s Libra? Create your own), corporate digital wallets, digital escrow accounts.

3. In terms of timing & costs. Take example of our platform — Cerealia — we have completed our MVP in 8 months, at a ridiculous cost. But we have a trade-tech solution (with execution module, which only streamlines it, without repeating its basic tasks), which already addresses real pain points of mainly emerging markets’ agri-traders, and we really using blockchain, which really serves for smth already (we also use cryptography as a potential game-changer for the industry). We have more concrete blockchain applications in the pipeline.

4. ABCCDs — if you really serious about helping industry digitalize, give a grant to Cerealia or it’s competitors with same scope (true, industry-wide platforms can only be independent ones). With ridiculous amounts for you, we will quickly (within a few months) go live.

Help people truly bring digital innovations for the good of the industry (you will only benefit, as trade will be more efficient and certain).

But I make an easy bet — this call to action will fall on deaf ears of course.

Stay tuned!