Yesterday, agricultural blockchain firm GrainChain announced it signed agreements with stakeholders of the Honduras coffee industry to unite them on its platform. GrainChain is backed by Medici Ventures, the blockchain unit of Overstock.com, having raised $2.5 million from the company last year.
Coffee is one of the leading exports of Honduras. About 20% of the country’s population is dependent on coffee for their livelihood. The coffee supply chain involves several stakeholders. It becomes nearly impossible to keep track of the various processes leading up to the packaging of coffee for sale.
“Growing coffee is such a widespread process with so many variables that it has traditionally been impossible to get people on the same page, which lowers trust across the entire supply chain,” said Francisco Fortin, general manager of Confianza SA-FGR, an insurance provider to the agriculture industry.
The coffee industry is facing a crisis with prices hitting an all-time low in the past few years. A disorganized supply chain only hinders the efforts to recoup the market. By bringing all the stakeholders on a single blockchain-based platform, GrainChain believes the coffee industry in Honduras will receive a much-needed boost.
Coffee growers will be given a digital wallet, empowering the remote and unbanked farmers to avail financial services and improve their crops. Banks can use the platform to disburse loans faster based on the immutable data stored on the blockchain.
Blockchain also reduces the risks for the banks and farmers by bringing crop insurers on the platform, which can underwrite farmer loans and process payouts with ease. Grainchain’s platform also facilitates smart contracts for settlement, traceability, and sourcing.
“Our platform provides guarantees and visibility through the entire process, which empowers growers and vendors while reducing risk to bankers and buyers,” said Luis Macias, CEO of GrainChain. He added that blockchain for agriculture would encourage investment in the sector and improve the quality of the produce.
The platform also employs IoT devices to measure the quantity, quality, and humidity of agricultural produce to enable faster contract settlement.
Blockchain for crops
Meanwhile, other coffee blockchain projects include startup Farmer Connect, which last week onboarded firms including Douwe Egberts on its provenance platform. The platform is based on IBM’s Food Trust blockchain.
Starbucks partnered with Microsoft Azure for coffee traceability earlier this year. The Azure blockchain platform is also used in R3’s more general food and grains traceability initiative. In India, the Ministry of Commerce & Industry has launched a blockchain-based marketplace app for coffee trading.
Blockchain is also being scaled to other agricultural products. Industry giants Glencore Agriculture, COFCO, Cargill, and Louis Dreyfus Company are part of a consortium using AI and blockchain for agribusiness.