ETHIOPIA – As leading coffee producers in the continent, Ethiopian coffee farmers are set to adopt blockchain technology in a bid to boost the sector as they focus to increase their share at the global market.
The farmers seek to use the technology behind virtual currency, cryptocurrencies, to certify shipments of coffee in order to bridge the growing demand from consumers about the origin and supply of the commodity.
The technology has trickled down to major start-up coffee roaster brands in the country which has increased traceability of the commodity along the value chain, from farmers to warehousing, inspection by regulators and shipping.
As a local coffee roaster brand, the
Founded by Killian Stokes, a Dutch social entrepreneur, Moyee said it has created unique digital identities for the 350 farmers it currently works with.
Subsequently, this has allowed buyers to see exactly how much each individual grower is paid, with prices set at 20% above the market rate.
The brand, in its race to expand its footprint in the sector has unveiled plans of using the blockchain technology which will additionally allow buyers tip farmers, or fund projects such as a new planting programme
Blockchain technology at a glance
Blockchain technology, used to underpin cyber-currencies like Bitcoin, allows shared access to data that is maintained by a network of computers and can quickly trace the hundreds of parties involved in the production and distribution of food.
Once entered, any information cannot be altered or tampered with.
According to a recent report by the United Nation Food and Agriculture Organization (FAO), the technology presents a huge potential to address challenges faced by smallholder farmers by “reducing uncertainty and enabling trust among market players”.
Siobhan Kelly, an advisor to the Food Systems Programme at the FAO, said that blockchain is set to be the next major revolutionary technology enabling farmers attract better-paying customers, bring traceability and build a credit trail.
Vijay Kandy, whose company is building the blockchain platform, said the auditing process would allow farmers to deal directly with buyers – bypassing the middlemen that many currently rely on – and make access to credit easier.
“One reason why buyers from faraway places or different countries go through middlemen is because they rely on them to make sure farmers are following these good practices,” he said.
With price fluctuations and the impact of climate change being major challenges in the coffee industry, Blockchain technology has enabled various firms worldwide to mitigate the challenges in the US$100 billion coffee industry.