How Australian farmers leverage blockchain in the supply chain
Access to finance is essential for small businesses looking to leverage modern technologies, especially in the supply chain. Compared to large enterprises, small and medium businesses (SMBs) do not normally have large funding available to them when making expansion decisions.
Be it using technologies to improve the supply chain or building resilient cybersecurity protection, both SMBs and large enterprise go through several processes before making a decision. For large enterprises, it is all about convincing the board, while for SMBs, it is about getting the best financial services available to them.
According to a report in Global Trade Review, Australian lawmakers have held hearings in a parliamentary inquiry into how supply chain finance affects small businesses and whether providers need to be more tightly regulated.
This follows the Australian Small Business and Family Enterprise Ombudsman scathing assessment that describes how large buyers are forcing suppliers to choose between a supply chain provider that takes a small slice of the amount due or faces lengthy waits for payment.
Indeed, the supply chain is rapidly changing. Intelligent workflows, artificial intelligence, IoT, blockchain, and intelligent order management are just some of the core technologies that are revolutionizing the supply chain. For larger enterprises, adapting to these changes is challenging. However, their ability to have financial access gives them a slight advantage.
As such, SMBs are having trouble with access to finance. However, things may be taking a shift as Cirralto, a B2B payment services business, is now providing Australian farmers with better access to trade finance by leveraging the Mastercard Provenance Solution (MPS), a blockchain-based innovation, and the Fresh Supply Co, a digital supply chain network.
Known for its transparency and traceability, the blockchain solution by MPS will embed operational data from the Fresh Supply Co network to provide enhanced supply chain insights. With this, financial institutions leverage data-driven credit decisions that drive lending confidence which in turn increases trade finance opportunities for farmers.
As the agriculture industry in Australia has long faced cash flow problems, a collaborative effort across all sectors is essential. With secure technologies like blockchain, the agriculture industry will be provided with enhancing access to trade finance, improving efficiency and cash flow for both buyers and sellers.
For Adrian Floate, CEO of Cirralto, joining forces to help Australian farmers is essential. By proving more flexible payment options, businesses will be able to trade faster and get paid quicker.
“What we are actually doing is data mining to demonstrate compliance of a contract. With Fresh Supply Co, we can use a farmer’s balance sheet assets to back their business, creating liquidity and giving them access to finance at a better price,” said Adrian.
With the global supply chain embracing more technologies, businesses in Australia would also need to ensure they can adapt and compete with the changes as well.
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