Blockchain to Secure Proper Payment for Coffee Farmers
As a consequence of global markets, supply chains are becoming increasingly complex. The road to the finished product is often long and windy, which can hinder transparency in production for both consumers, shippers and stores. Is this lettuce really from Spain? Are these eggs cage-free? Has the truck been filled before commencing delivery? One solution to this problem may be blockchain technology. And it’s being developed in coffee farms in Ethiopia and Colombia right now.
Transparency from farm to cup
A project group led by consulting company COWI is looking into how blockchain technology can be applied in the coffee business. This is done by a large-scale gathering of different kinds of data from the value chain of Nordic Approach’s and Peter Larsen Kaffe’s coffee farms in Ethiopia and Colombia respectively. The ambition is to plot the data from each step in the value chain into a blockchain system.
In doing so, every actor in the value chain, from coffee farmer to roaster and consumer, will be able to survey transactions done throughout the value chain. With this information at hand, quality, proper payment to the farmers, organic and fairtrade labels will be much easier to validate for both the consumers, retailers, roasters and shippers. That said, the aim for the project group, at this time, is merely to collect the data and create a foundation for further development.
What is Blockchain technology?
In the past years, this technology has become some kind of phenomenon. But what is blockchain technology anyways? In short, a blockchain is a network of records of transactions between groups, where each group in the network has to verify the data for all new inputs. This means, that between actors in the value chain of a coffee production, there is only a single database where every part of the network is accountable for the validity of information – ensuring complete transparency between all links of the value chain.
For now, blockchain has functioned mostly in the financial sector, but many are keen to implement it in different sectors. This project will run until 2021.
Members of the project group: