A new blockchain platform is set to help farmers receive payments for goods more quickly, enabling parties in the supply chain to look into the sources of their commodities and make it easier for them to learn more details of their trade as well.
For a start, the electronic platform connects about 4,500 farmers in Australia to global end-customers such as supermarkets and restaurants.
This means different parties can check pricing and supply information in real time, carry out transactions, as well as track the delivery of orders on the go. The transactions can be in any currency.
Singapore is among the top 10 importers of Australia's agricultural products. Total agricultural goods exported to Singapore in 2016 amounted to A$1.2 billion (S$988 million), comprising 2.7 per cent of the nation's exports.
The new platform is a collaboration between Singapore's DBS Bank, commodity trading company Agrocorp International and blockchain provider Distributed Ledger Technologies. It is expected to expand its reach beyond Australia in the next year or so to other origin markets such as Canada and Myanmar.
Speaking to The Straits Times ahead of the platform's launch yesterday, Agrocorp's head of business development Vishal Vijay said the practice has been for parties to wait for physical documents to be generated and passed from one party to another, before a transfer of ownership of goods occurs.
It typically takes five to 10 days, he added, for such documents to be ready and presented to a counter-party to verify that the goods have indeed changed hands.
"There are two age-old processes that we are trying to revolutionise," he said. "One, you will be able to see a faster... generation and transfer of documents and, as a result, we will also be able to make and receive payments more efficiently."
The time savings allow goods to be shipped out more quickly, reducing detention charges at storage centres, and the amount of interest parties pay to their banks which fund their trade flows.
"The second thing is that we are able to provide a better degree of transparency to our end-customers with regard to where a product is coming from," he said.
With the platform, farmers can access commodity prices and register sales, with such sales and purchase agreements stored digitally. Upon "trigger events", such as confirmation that goods have been shipped, the system prompts DBS to take actions such as releasing payments.
Parties along the supply chain can upload and view related documents on the platform as well, and their trading partners will need to validate changes to contractual terms before any trade can be made.
Mr Raof Latiff, DBS' group head of product management for global transaction services, said banks at present do not get "full visibility" of what happens at each step of a supply chain, but the platform helps with this transparency.
The plan is to get more users on board, said Mr Vijay: "The only way this will be successful is for wider adoption. We are committed to not keeping this as something that is strictly owned and operated by Agrocorp."
He added: "Banks like DBS can also start using it for its own transactions as well, with more of its clients."