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‘Virtuous Cycle’: Introduced by IBM Blockchain App for a Viable Coffee

30 Jan

International Business Machines (IBM) is one of the many companies that are seriously pursuing blockchain technology. In fact, IBM had the largest number of blockchain-related patents (100) in the US as of July 2019, according to data cited by Cointelegraph. The blockchain-based IBM platform is powering many solutions among them an app called “Thank My Farmer”.

Thank My Farmer is an app developed by Farmer Connect. Farmer Connect is an independent entity that brings together stakeholders in the coffee industry and whose primary focus is to help to sustain smallholder coffee farmers. The ecosystem brings together all the stakeholders that play a part in the supply chain of coffee. Ultimately, the consortium hopes to enable sustainable coffee for all the end users.

During this year’s Consumer Electronics Show in Las Vegas, Farmer Connect unveiled the “Thank My Farmer” app for the first time. The app is an ingenious utilization of blockchain technology to connect the final consumer of coffee to the farmer. All the parties that play a part in the movement of the product along the supply chain are also on the app. As such, the app brings together all participants that matter in how coffee starts its journey and where that journey ends.

Farmer Connect and IBM are leading the charge

After the unveiling of the app, IBM released a statement that lauded the development. The app will allow people who drink coffee to trace the origin of the product straight to the farm, IBM said in the statement. As such, coffee drinkers are better placed to understand the origin and the quality of coffee. This is crucial especially considering that many coffee drinkers are more conscious about their health. As such, they take the quality issues of their drinks very seriously.

However, the app is not so much about the welfare of the coffee drinker. As the name suggests, it provides an avenue through which consumers can thank the farmer that produced the coffee beans. According to the IBM statement, the app will enable consumers to “support the farmer who grew the beans.” They can do this through sending tips to the farmer through the app. Interestingly, this app achieves one of the primary goals of Farmer Connect, which is allow the benefits of the coffee industry to flow to the smallholder farmer. Oftentimes, this section of the industry misses the benefits of the industry because their products exchange many hands before they reach the destination.

Particularly, the app is powered by IBM blockchain, which means that the details registered on the ledger are unchangeable. This feature shuts out unscrupulous middle-parties whose intention is to undermine the efforts of the smallholder famers. Farmer Connect has huge support by major industry players including the Colombian Coffee Growers Federation (FNC), Rabobank, Volcafe, and Jacobs Douwe Egberts (JDE) among many other partners. Ultimately, Thank My Farmer is a conscious effort to promote fairness in the supply chain of coffee on a global scale.

The need for the efforts arises from the fact that coffee has one of the most complicated supply chains in the world. Although there are hundreds of certifying bodies whose aim is to facilitate responsible sourcing and sustainable growing of coffee, these efforts do not seem to bear the desired results. This is because the industry is still shrouded in shady deals between third parties who do not contribute anything to the production process.

Notably, one of the reasons behind the failure of the efforts of certifying bodies is lack of knowledge among the smallholder farmers. These farmers are not knowledgeable enough to know that they can bring their own produce to the market instead of relying on brokers. To that end, the app provides the necessary tools that farmers can leverage to understand the workings of the internal supply chain of coffee. Here is where blockchain technology comes in.

Blockchain technology facilitates traceability

Blockchain technology brings together different stakeholders in an industry where they interact on a peer-to-peer (P2P) level. This means that each participant on a blockchain platform has equal rights and privileges. In addition, the platform allows users to interact directly without the need for a central authority.

For example, blockchain technology in the financial sector removes the role of banks and other financial institutions. Therefore, users can send money direct to one another using native tokens. The role of banks and other financial institutions in the financial industry is to maintain trust and to enforce contracts. In a blockchain ecosystem, there are smart contracts that facilitate transactions. These smart contracts ensure that parties to transactions do not renege on their obligations.

Read the Blog: How Drones with Blockchain Technology Benefit The Agriculture Sector?

Another feature of blockchain technology is that data is immutable once it is registered on the public ledger. This means that no single user has the permission to edit, remove or add data to the ledger without the authorization of a majority of the users. Interestingly, this feature makes it impossible for hackers to compromise the ecosystem. Therefore, the level of trust between peers is high and the platform itself is safe from bad actors.

From the foregoing, it is possible for users within a blockchain ecosystem to trace the movement of product from its start point to the destination and Thank My Farmer app is leveraging this feature. Evidently, blockchain sustainable efforts like these hold the key to revolutionizing industries across the globe.

Blockchain enables a virtuous cycle in food and beverages industries

Interestingly, IBM and Farmer Connect are not the first stakeholders to leverage blockchain to enhance transparency and fairness in the coffee industry. In May 2018, Ethiopia entered a partnership agreement with IOHK, to manage shipments of coffee. Specifically, farmers and other key stakeholder of the Ethiopian coffee industry would be integrated on an application powered by IOHK’s blockchain platform called Cardano. Besides coffee, the government of Ethiopia has plans to integrate the whole agriculture industry onto blockchain solutions to empower farmers.

Smallholder farmers worldwide are at the mercy of intermediaries, most of them who are unscrupulous. However, the integration of supply chains on blockchain platforms will ensure that there is a virtuous cycle in not only the coffee industry but also the global food and beverages industries. Ultimately, farmers will get the reward they deserve while consumer get the quality they deserve.

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