The Technical Centre for Agricultural and Rural Cooperation (CTA) confirms closure by end of 2020.
Leading image

Fairfood hits the ground running with blockchain

Blog

Blog

Consisting of a small group of ambitious young people, Fairfood in the Netherlands aims to contribute to the achievement of six of the 17 sustainable development goals. Lonneke Craemers, head of business development and project management at Fairfood, explains how blockchain technology is helping them to achieve these aims.

Transforming the food industry

The food industry faces issues of environmental and social exploitation and injustice, such as insufficient incomes for people working at the beginning of the food value chain. Fairfood’s food system depends on about 70-80 million smallholder farmers who are currently living below the poverty line. Poverty indirectly leads to further development issues, such as child labour.

Fairfood’s approach is to look for solutions that benefit all stakeholders across agricultural value chains by seeking out innovative and entrepreneurial ways to bring them together towards sustainable change. Blockchain is one of those solutions. The technology can help to build trust between supply chain actors, for instance, by verifying agreements and claims without having to share or reveal sensitive information with a central authority. By decentralising data, companies – and farmers – increase the ownership of their products, and the movement of products and data along the chain become much more transparent and efficient.

All actors within a supply chain, including consumers, are connected and can review each other’s transactions on the blockchain. Information about each transaction is stored and is publicly accessible in a digital ledger. Since data within the blockchain cannot be altered, anomalies in the system can be revealed or solved. For Fairfood, the most important aspect of the technology is that producers at the beginning of its food chains get an opportunity to be identified, claim ownership over their products, increase their negotiating power, and gain access to relevant information and markets.

Learning by doing

Fairfood was the first in the Netherlands to pursue blockchain technology for food chains, and one of the first in the world. In 2017, Fairfood started with a coconut chain. With the help of the technology, the NGO was able to import 1,000 coconuts to the Netherlands, with total transparency of information – the blockchain presented the coconuts’ place(s) of origin, prices paid and whether these prices were fair. One interesting finding was that, through the system, farmers were able to confirm whether or not they had received the agreed upon price. Acting as the retailer, Fairfood made agreements with the coconut supplier to buy the coconuts only after all farmers had received their agreed-upon price.

Fairfood then adapted the blockchain structure for two other enterprises – using the technology’s data transparency to develop coffee value chains based in Ethiopia and Colombia. The NGO was able to confirm the claims of quality and income through the creation of a consumer interface, where the end consumer could look back through the chain, see the names and locations of the farmers that contributed to that coffee, and if they had received an agreed upon premium for their high quality red cherries.

Fairfood is developing the software with every project, and hope to make this technology more accessible for everyone involved in the food sector. Currently, Fairfood is working with the Dutch family business Verstegen Spices & Sauces to trace a batch of nutmeg from Indonesia. For Verstegen, a company keen to make all of their chains transparent, the main appeal of the technology was the fact that farmers get to verify the price they receive for their produce.

The application

To get a bit more technical, collaborating farmers receive a digital wallet in which their produce is logged. All of their products, or batches of products, are assigned a ‘token’. This token embarks on a digital journey, which runs parallel to the real-world journey of the product. En route, it collects value and information that can be shared or used to verify agreements and claims. This way, at any point in the process, the product, with its token, can be traced back to the farmer. The next – and most interesting step – is when the accrued value and information travels directly back to the farmer.

Of course, farmers don’t always have a smartphone, but there are ways to work around this. In the case of the nutmeg farmers in Indonesia, Fairfood verifies that farmers have received an agreed-upon price by connecting farmers to a ‘hot wallet’ via SMS. The compangy keeps their private key and enable them to access their wallet via their older mobile models. When a farmer has delivered his or her products, he/she receives a text message to verify the quantity and payment, such as: “You sold (x) kilo’s and should receive (y). Have you received this amount?” The farmer’s response is logged publically on the blockchain.

A word of advice

Blockchain is still developing. There are still practical and technical obstacles to overcome, not least insufficient farmer access to smart-phones and the internet. However, for the obstacles that are often mentioned in relation to blockchain, innovation is already happening and moving fast. My advice to anyone looking to utilise the technology would be to just do it, keep it simple, learn a lot, and hit the ground running. It’s going there anyway.

This article is one of a series of case studies on blockchain applications in agriculture undertaken by Wageningen University and Research on behalf of CTA. See the rest of the collection at https://www.cta.int/en/blockchain.

Location:

Blockchain: an opportunity to improve the traceability of sustainable cocoa in Côte d’Ivoire

by , and

Lack of traceability is a major issue in the cocoa sector in Côte d’Ivoire. The French NGO, Nitidae, believes that blockchain could provide a solution that would fight fraud and promote ethical production. With the support of CTA and blockchain specialists, Gaiachain, Nitidae carried out a project, from February 2019 to April 2020, with a cooperative in the Mé region of Côte d’Ivoire to develop and test a blockchain traceability application. Here is an initial assessment of the ‘Cocoblock’ experience.

hiveonline: working with communities to help them access credit

by and

hiveonline is a digital platform that builds financial trust. This young start-up works with NGOs, merchants and microfinance institutions to help support small business ecosystems. The goal is to help communities grow by giving them access to credit and markets. We spoke with Sofie Blakstad, CEO and founder of hiveonline, about her initiative and the role of blockchain technology.

Creating frictionless supply chains

by and

Binkabi is a platform for the issuing, trading and financing of commodities on the blockchain. CEO and founder, Quan Le, spoke with us to explain the ins and outs of the application and provide some advice for others interested in taking up blockchain technology.

BenBen Ghana: Empowering citizens by providing land security

by

Founded in 2015, BenBen is a Ghanaian-based land tenure and property tech start-up. BenBen leverages distributed ledger technology (DLT) in building digital platforms for securing land-based assets and financial transactions in African land markets. BenBen’s vision is to build the digital infrastructure to enable African economies to fully unlock the socio-economic potential of their land and create ethical land markets.

Be sure you don't miss our latest updates.