SINGAPORE, July 26, 2018 /PRNewswire/ -- Dr Chatib Basri, one of Indonesia's most respected economists and the country's former Minister of Finance, has joined the blockchain for social impact project HARA in an advisory role. This is the first time a former minister has endorsed a blockchain start-up from Indonesia.
HARA is the first blockchain project that aims to have a positive social impact in Indonesia. The start-up will use blockchain technology to power a decentralized data exchange that will address the issue of asymmetric information availability in the food and agriculture sector. This issue severely hampers businesses in the supply chain to be more efficient and effective, resulting in unnecessary losses.
"The development of blockchain and digital technology will undoubtedly help us improve the economy by cutting transaction costs, simplifying long processes or red-tape, and making the process become faster," Dr Basri commented.
Most of the problems in the agriculture and food sector are data related. Farmers in Indonesia have little to no access to agricultural data and market information that could increase their productivity and reduce their losses.
Indonesia's economy is currently ranked as the 16th largest in the world, with 33% of the workforce working in the food and agriculture sector. However, due to various growth impeding challenges, only 13.95% of the country's GDP comes from that sector, amounting to a total of USD $129.6 billion.
The most fundamental problem the country consistently faces is the comparatively low productivity in growing rice, even though the production cost is the most expensive in all of Asia. For example, the rice production of farmers in Vietnam is 14.5% higher, while their production costs are significantly lower.
In addition to the problem of production inefficiency (producing less at a higher cost), Indonesian farmers also have to deal with a 20% post-harvest loss due to the low efficiency of the market distribution chain.
HARA believes that data transparency can solve these problems and that data will become a new commodity in the agricultural sector. The company will help solve the problems by providing access to actionable data-driven insights that support the efforts to improve agricultural productivity and secure solid economic growth for all.
"The HARA blockchain will help farmers in the Indonesian agriculture sector increase their productivity, cut the transaction costs and increase their income. I'm honoured to be part of this adventure as an advisor for HARA," Dr Basri stated.
HARA is currently being piloted in several regions in Indonesia and has already shown an encouraging impact on farmers. In the latest phase of the project, around 3.000 farmers in 41 remote villages were reached. By 2020, HARA plans to attract 2 million Indonesian farmers by expanding the implementation area across the whole of Indonesia.
Furthermore, preparations are being made to expand to other developing countries on the equator, and HARA has started negotiations with potential partners in Thailand, Vietnam, Bangladesh, Kenya, Uganda, Mexico, and Peru.
HARA is a blockchain-based data exchange for the food sector that has been operating since 2015. The company provides farmers and other players in the agricultural sector with access to reliable data and transparent transactions. HARA is a product designed by Dattabot, a leading big data company in Indonesia.
In a pilot project, HARA has already acquired usually hard-to-find food data, such as Know Your Customer (KYC), farmer, land, and weather data, in different provinces across Indonesia. This data is beneficial in assisting financial institution partners to disburse loans in a growing market. Furthermore, the incentive mechanisms ensuring continuous usage of the application in the ecosystem have also been proven to work.