June 7, 2018

Digital Payment, Ethnocultural Food and Alternative Agriculture

Information technology has transformed the way we interact with ourselves and preferences. It’s so ubiquitous that stakeholders in the ethnocultural food markets are now catering to the needs of recent immigrants via online platforms such as My chopchop. Customers can order online and the product will be delivered at their doorsteps. Moreover, a few farmers and vendors at the Guelph’s Farmers market are also becoming digital. In the last few months, I have paid for my goat milk using square, a payment platform that is so easy that small businesses can accept payment via a magstripe reader inserted to the phone jack or a cordless peripheral for tapping.

Digital Alternative Agriculture

An environmental and health conscious individual can spend the weekend exploring his/her neighbourhood without compromising the sustainability of the landscape. The day can start with a coffee at Balzac's Coffee which promotes the production of organic, artisanal, and sustainable products. Then one can explore the farmers’ market, paying the local goat farmer using square which strengthens the local economy, reduces transaction costs and ecological footprint. But we still need to do more by learning from China and incorporating digital payments such as Alipay and WeChat pay to the alternative agriculture and ethnocultural food market. Chinese style digital payment requires the use of a smartphone, internet connectivity and a bank account – conditions that already exist in Canada. Even in countries where the internet is not perfect, mobile money is working well. Different variations of mobile payment, handled by telecommunication companies, have revolutionized African countries such as Kenya (Mpesa), Tanzania, Uganda, Zimbabwe, and Ghana.

Balzac'c Coffee Roasters, Guelph.

Digital ecosystem is so pronounce in China that nearly all transactions are done using digital payment in cities like Hangzhou and Shenzhen. Mobile payment does not require a smartphone (mobile phone can also be used). For example Mpesa is used for nearly all transactions in Kenya. It has also made the unbankable to be included in the financial landscape and economically active. Both digital and mobile payments will enhance the ethnocultural market and strengthen the viability of alternative agriculture. Stakeholders can easily transact businesses in rural Ontario with or without the involvement of a regular bank. A typical example of how small businesses are benefiting from digital payment, is the case of my friend in Shanghai who sells cooked African food and receives payment by his customers scanning his Quick Response Code (QR Code) and payment is instantaneous. Digital payment became popular in China in 2015 and he has been using it for business since then. The big players in this sector are Alipay and WeChat pay. He uses digital platforms for all aspects of his business including ordering, delivery and logistics. Logistics companies have their apps for easy transaction and fraud protection. The implementation of these ideas in the ethno cultural market in Canada will strengthen the economy and create job opportunities along the value chain that are consistent with the 21st century.

Digital payment and electronic agriculture will reduce the power of middlemen and encourage young people to consider agricultural production and marketing as viable entrepreneurial activities. Furthermore, digital payment will serve as an incentive for the development of community shared agriculture (CSA). A CSA is an arrangement that allows community members and farmers to share the risk of agricultural production.

CSA explained

CSA is an alternative agriculture that enhances the collaboration of farmers and consumers. Consumers buy shares from the farmer and the farmer supplies a pre-selected basket of goods based on what is available during the season and produced by the farmer or a group of farmers. To have a better understanding, let’s use the illustration below:

A farming couple in southwestern Ontario bought a 95 acres for vegetables and livestock production in 2009 and the financing of the farm is through CSA with 200 members. This farm has three full time staff and volunteers. The arrangement gives the farmers a reliable stream of income and ability to plan what to grow. The shareholders (subscribers) are updated about the activities on the farm and can contribute their time on the farm in-lieu of specified financial contribution. During the harvest period the shareholders can harvest the produce themselves, pick up their basket of goods at the farm gate or collect at delivery centers in selected towns or cities such as Guelph, London or Cambridge. The couple in this case study has an income of approximately 50,000CAD/annum. Labour is a huge part of the production, because it’s organic, so there is a need for ecological loving consumers to volunteer their time – gardening is therapeutic.

Shareholders of this CSA pay $575 CAD for a 20 week share in the summer. And the basket delivered to consumers is a function of what is available. This farm has successfully grown culturally appropriate vegetables such as Asian greens, spinach and tomatoes and they keep exploring new crops based on shareholders’ preferences. They produce 1200 to 1800 pounds of tomatoes from the greenhouse - no outdoor production of tomatoes. Although, there are capital expenses such as procurement of a tractor and coupled implements, the CSA is bio-dynamic – the farm is its own ecosystem. The planting calendar and land preparation is nature preserving. The sheep on the farm are grass-fed which translates to healthy livestock, no deworming and more omega-3 in the meat produced. Overall, the young owners of the CSA want to continue growing foods and their shareholders are happy with their customer relationship management.

Learning from China

Alternative agriculture, including CSA will benefit from digital wallet (and or mobile pay) by learning from platforms developed by Tencent (WeChat pay) and Alibaba (Alipay). Alibaba has gone a step further with it’s Hema Stores. Shopping behavior is changing as technology platforms suitable for online ordering continue to promote convenience in our global village. In China, the trend is instantaneous shopping based on a social media interaction linked to direct ordering from the producer. Canada has recently stepped up to this reality. For example, a collaboration between Metrolinx and Loblaws will allow commuters to order their groceries online and pick their bag on their way home in any of the few stations where the service is available this spring. I hope we will have a wallet less ethnocultural market in the near future.

The beginning of the future

The future of sustainable agriculture is guaranteed when information technology is blended with agriculture production, preferably organic. Crowdfunding is now used to link middle class people who are interested in farming but don’t have the time and access to farm land. With crowdfunding, ThriveAgric and FarmCrowdy,  co-farmers can buy a maize or any other produce farm in a remote village in Nigeria in a structure that is beneficial to the co-farmers, the tech startup and the local farmers. And very soon crypto-labelling will reduce the asymmetries and opacity in the halal, kosher, organic and alternative agriculture markets.

In a nutshell, digital payment, crowdfunding and other forms of e-agriculture will enhance production via market gardening (growing crops for the alternative market) and marketing through farmers’ markets, farm gate sales, self-harvests by consumers, buying groups, home delivery, and community shared agriculture.

Bamidele Adekunle, ECVOntario, SEDRD, University of Guelph

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