Rich by Coin

Blockchain technology could help Filipino farmers access much-needed credit to boost their working capital and may even enable the country to host a commodity futures market. This view was articulated by Daniel Broby, the academic program director of AIM’s Master of Science in Financial Technology, who notes that applying blockchain to agriculture—especially rice—could address farmers’ limited access to credit. Broby said the SEC has proposed a futures market since last year to modernize rice trading domestically and globally.

Blockchain would operate as a complementary layer to the futures market, tokenizing aggregated farmer produce on the blockchain and trading it as standardized units. The technology would enable transparent trading, reducing information asymmetry between buyers and consumers. It becomes a public record: time-stamped and unalterable, creating certainty and clarity in the market. Additionally, once a contract volume hits a price level, it could be automatically sold and distributed to farmers.

Broby argues the concept is viable, and the Philippines could host the world’s rice futures market if the SEC’s plan proceeds. With blockchain, it is easier to implement and cheaper to set up. Making the rice futures market international could foster more competitive pricing and fairer trade across rice-producing countries. He notes that this is not being done elsewhere, implying a significant opportunity.

Beyond the futures market, blockchain and smart contracts could help banks lend to farmers by providing proof of liquidation or collateral on the chain. FAO notes that blockchain and smart contracts can make contractual transactions more transparent, trustworthy, and integrate producers in contract farming transactions. The technology has precedents, such as Cambodia’s 2018 Blocrice pilot run by Oxfam to manage contract farming between organic rice farmers and exporters and processors. FAO explained that smart contracts are electronic documents stored on the blockchain that encode the terms of an agreement and are designed to digitally facilitate, verify, or enforce performance, enabling trade, reducing paperwork, and mitigating fraud.